The process for filing ongoing and/or reopening Retiree Drug Subsidy applications is incredibly complex. Below are some Plan Sponsor FAQs to assist them with understanding and navigating the RDS program. Plan Sponsors can also find printer-friendly information on the RDS program on our Documents page.

General RDS Questions

What parts of the RDS process can Part D Advisors take over for Plan Sponsors and what RDS roles will need to be retained by the Plan Sponsor
PDA will become the Account Manager for the Plan Sponsor and will assign several PDA employees to become designees to assist with ongoing responsibilities. The only role that we cannot take on for the Plan Sponsor is the role of the Authorized Representative.
How do Plan Sponsors know if they qualify for the RDS?
A Plan Sponsor who provides retiree prescription drug coverage that is actuarially equivalent to Medicare and who submits a qualifying online application can participate in the RDS Program. Part D Advisors will work with your clients and our actuaries to complete the attestations and online applications in a timely manner.
I heard that the RDS Program was not going to continue under the new Healthcare laws, is that true?
No! The RDS Program was not cancelled by the new Healthcare legislation. The only change to the RDS Program is that subsidy payments to private employers are no longer tax-free; public and non-profit Plan Sponsors will not be affected.

Reopening Process Questions

Is a Reopening Needed Because Mistakes Were Made?
This is a very common question, but the answer is always the same; absolutely not.

One of the biggest challenges Plan Sponsors face with the RDS program is coordinating between the Centers for Medicare and Medicaid Services (CMS), multiple vendors, and data sources to compile the necessary information to receive subsidy payments. In summary, the CMS requires Plan Sponsors and their vendor(s) must do the following to compile the requisite information:

  • Identify and match members to the Medicare Database;
  • Filter claims made by eligible members to ensure only Part D prescriptions are included for subsidy payment;
  • Match eligible claims to approved, eligible members.
While these requirements are simple enough in theory, more often than not, each piece is completed by different parties. This means that when the time comes to compile this information, miscommunications and oversights can only be expected. This confusion is only compounded by sometimes conflicting and generally complicated rules and restrictions for each item, which are set by the CMS.
Can I still Reopen Even if I have a Pharmacy Carve Out?
PDA works with dozens of national and regional PBMs around the country. Whether a Plan Sponsor needs data from their current PBM for ongoing payment requests or is looking for historical information from their previous vendor, PDA already has a relationship with the PBM and can get access to their claims data. IF PDA doesn’t currently work with the PBM, our unique approach to data collection means we accept data at time intervals and in formats most convenient for the vendor. This allows us to start-up with new vendors with minimal cost and effort to the PBM, consultants, brokers or other interested parties and most importantly, the client.
What are the biggest challenges or risks for Plan Sponsors during the reopening process?
There are, in most cases, only three common issues a Plan Sponsor may face during a reopening

It May Be Difficult to get all the Necessary Data from Vendors for Past Years
This can be particularly challenging when the Plan Sponsor has terminated the relationship with one or more of the vendors or if the vendors have gone through one or more acquisitions. PDA works closely with more than eighty (80) vendors around the country. PDA will submit the initial data requests to the different vendors in order to receive all necessary data elements to complete the RDS review. PDA also makes it easier on these vendors by accepting data in any format that they may have readily available, reducing the likelihood that the vendor will have system issues. In the event that a vendor is unable or unwilling to provide the necessary data, PDA will work with the client to obtain the data.

The RDS Center May Deny the Reopening
In the event that the appeal is denied, PDA is committed to warehousing all of the Plan Sponsor’s data, in an auditable format, so that it is readily available in case of a CMS audit. Unfortunately, Medicare decisions on RDS appeals are final and cannot be appealed.

Once the Recalculations for are done, the Plan Sponsor may be in an Over Payment Situation
This may result in the Plan Sponsor having to reimburse the CMS some of the previously collected subsidy net of PDA’s improvements. While this is unlikely, PDA will submit a cost report prior to the Plan Sponsor filing an appeal. It is the choice of the Plan Sponsor whether or not they would like to pursue the appeal. Alternatively, the Plan Sponsor can notify CMS that it believes there is some degree of overpayment or the Plan Sponsor may simply do nothing. If either of those options is selected, PDA remains committed to warehousing all of the Plan Sponsor’s data, in an auditable format, so that it is readily available in case of a CMS audit.
What if I Moved to an EGWP, MA or PDP Plan? Can I still hire PDA for a Reopening?
Absolutely! If your group has or will move to a plan that is ineligible for the Retiree Drug Subsidy, now is a great time to reopen previously reconciled years. On top of finding more subsidy dollars, Plan Sponsors get the added benefit of reviewing their past filings for compliance issues in case of a potential CMS audit. Additionally, we often find it eases the transition between plans for our clients to let PDA handle old claims so they can focus on the future.

Ongoing RDS Questions

Do I have to hire PDA for both ongoing and reopening RDS services?
No! PDA can assist you with either service without the other, however, it is often in a client’s best interest to do so to minimize your work and maximize both previous and future subsidy payments.
How much time will I need to invest in the RDS process?
PDA will handle the vast majority of the RDS responsibilities. You will need to spend just a few hours a year working on RDS related tasks in order to receive and safeguard their subsidy.
Can applications for the RDS program be submitted in hard copy?
No. All RDS applications must be submitted online through the secure RDS website.