Terms and Definitions

CMS:  Center for Medicare & Medicaid Services.  CMS is responsible for the administration of all Medicare services including the retiree drug subsidy program.

Cost Report:  Cost reports are documents prepared by a Plan Sponsor (or its representatives, like PDA) and submitted to the RDS to report the costs of all eligible claims expended during a Plan Year, or portion thereof.  These are not an actual request for payment, but a reporting to the RDS so the amount of payment can be determined.

False Claims Act:  31 U.S.C. §3729.  The False Claims Act is a federal law in the United States that allows people, whether or not they are affiliated with the government, to file actions against federal contractors claiming fraud against the government.  In the event that a Plan Sponsor is found filing fraudulent claims to the RDS and receives payment, an auditor from CMS or the OIG, or anyone with insider information, can file an action against the Plan Sponsor under the False Claims Act.

OIG:  Office of the Inspector General.  The OIG is an agency of the United States Department of Justice responsible for conducting audits, independent investigations and reviews of government programs to deter waste, fraud abuse, misconduct and promote integrity, economy and efficiency.

Payment Request:  A payment request occurs after the filing of a cost report with the RDS.  When a cost report is filed, the RDS will calculate the amount of subsidy that should be paid.  The payment request is when the Payment Requestor affirms the accuracy of the payments under the risk of punishment under the False Claims Act and requests that the RDS submit an electronic payment to the Plan Sponsor for the specified amount.

PBM:  Pharmacy Benefit Manager.  A PBM is a third party administrator of prescription drug programs.  They are contracted by the Plan and handle the Plan’s eligibility, claim processing and claims payment services.  They are also responsible for developing and maintaining the formulary, contracting with pharmacies and negotiating discounts with drug manufacturers.

PDA:  Part D Advisors, Inc.

RMEI:  Retired Medicare Eligible Individual.  A RMEI is a person who is retired and eligible for Medicare Part A and / or Medicare Part B benefits.

RDS:  Retiree Drug Subsidy Program.  The RDS is directly responsible for the administration of the retiree drug subsidy program.  They review Plan Sponsor applications, eligibility and payment requests.  The RDS is the entity that pays the subsidy to the Plan Sponsors.