Payment Setup

User Roles:

AM

AR

Program Components:

Payment Setup

This page contains answers to Common Questions about Payment Setup. Review this page to learn about how to complete and change Payment Setup, who can complete and change Payment Setup, and more. For additional information refer to the Payment Setup section of the RDS User Guide.

What is Payment Setup?

ANSWER: Payment Setup is critical to the payment process as it affects the "who" and "how" of reporting costs and requesting payments.

Payment Setup is the process where the Plan Sponsor determines who reports cost data for each Benefit Option on the application, how the information is communicated to CMS' RDS Center, and who requests interim payments if the Plan Sponsor selects an Interim Payment Frequency.

During the Payment Setup process, the Plan Sponsor identifies individuals and/or Vendors responsible for reporting costs associated with each Benefit Option and requesting payments for an approved application.

Answer ID: 800-1
Date Posted: 10/17/2014

Return to top

What are the steps of the Payment Setup Process?

ANSWER: The Payment Setup Process consists of six steps:

  1. Assign Payment Requester Privilege to Authorized Representative
  2. Assign Payment/Cost Privilege to Account Manager
  3. Assign Payment/Cost Privilege to Designee(s)
  4. Specify Vendors for Cost Reporting
  5. Assign Benefit Options to Cost Reporters
  6. Final Review to Complete Payment Setup

All six steps of Payment Setup must be complete to finalize Payment Setup. Plan Sponsors cannot submit cost reports or payment requests until Payment Setup is complete.

For more information about each step, including the purpose of each step and how to complete it, refer to Complete Payment Setup.

Answer ID: 800-2
Date Posted: 10/17/2014

Return to top

Who can complete Payment Setup?

ANSWER: The Authorized Representative and Account Manager are the only RDS Secure Website user roles that have the authority to access Payment Setup. The Authorized Representative or Account Manager is required to complete each of the six Payment Setup steps and submit the completed Payment Setup to CMS' RDS Center for processing.

Refer to User Roles and Responsibilities for Completing Payment Setup for additional information.

Answer ID: 800-3
Date Posted: 10/17/2014

Return to top

Are there any guidelines or restrictions regarding Payment Setup?

ANSWER: Plan Sponsors should understand the following guidelines before initiating Payment Setup:

  • The same person cannot be both a Payment Requester and a Cost Reporter. A single individual may not have both the Report Costs privilege and the Request Payment privilege on a given application. A Cost Reporter cannot request payments, and a Payment Requester cannot report costs. This separation of duties guards the RDS Program against fraud and protects taxpayer dollars. The RDS Secure Website enforces this separation of duties requirement during the Payment Setup process.
  • Possible Payment Requesters include: Authorized Representatives (who are automatically assigned this privilege by the system); Account Managers manually assigned the Request Payment privilege; and Designees assigned the Request Payment privilege.
  • Possible Cost Reporters include: Account Managers manually assigned the Report Costs privilege; Designees assigned the Report Costs privilege; and Vendors. Vendors can report cost data, but they can never request payments.
  • Cost Reporter Designees attached to Vendors are considered Vendor Designees.
  • Cost Reporter Designees not attached to Vendors are considered Plan Sponsor Designees.
  • Cost Reporters must be assigned a Reporting Method. There are two reporting methods for submitting costs: Data Entry and Mainframe.
  • Plan Sponsor Cost Reporters must be assigned the same Reporting Method. The Plan Sponsor Cost Reporters must either submit cost data by Data Entry or by Mainframe. The Plan Sponsor cannot use both methods on the same application.
  • At least one Cost Reporter must be assigned to each Benefit Option.
  • Plan Sponsor and Vendor Cost Reporters are separate sources. The source becomes particularly important if multiple Cost Reporters report on the same Benefit Option for the same plan month. Cost data reported by the same source overwrites (replaces previously submitted data), while cost data reported by different sources are added together.
  • All six Payment Setup steps must be completed to finalize Payment Setup.
  • Payment Setup must be completed to report costs or request payment.

Answer ID: 800-4
Date Posted: 10/17/2014

Return to top

What is cost reporting?

ANSWER: Cost reporting is the process of reporting cost data for Qualifying Covered Retirees (QCRs) on an approved RDS application. Interim cost data may be reported throughout the plan year if the Plan Sponsor has elected an Interim Payment Frequency. Final cost data must be reported for an Annual Payment Frequency and final Reconciliation.

Federal law requires that cost data is submitted only for the QCRs, corresponding Subsidy Periods, and the Benefit Options in which each QCR is enrolled.

Cost reporting assignments must be completed in Payment Setup prior to submission of cost data.

Answer ID: 800-5
Date Posted: 10/17/2014

Return to top

How are cost reports submitted to CMS' RDS Center?

ANSWER: Cost Reporters report cost data to CMS' RDS Center for Qualifying Covered Retirees by Manual Data Entry on the RDS Secure Website or by Mainframe.

Answer ID: 800-6
Date Posted: 10/17/2014

Return to top

What is a Cost Reporter?

ANSWER: A Cost Reporter is an individual or a Vendor that is responsible for submitting drug cost data to CMS' RDS Center. During the Payment Setup process, Plan Sponsors identify Cost Reporters for each Benefit Option defined within an application. Plan Sponsors may choose to assign any of the following as Cost Reporters: the Account Manager, any existing Designee already assigned to the application, any new Designee added to the application, or a Vendor. Cost Reporters are assigned to an application, and Benefit Options are then assigned to Cost Reporters. A Cost Reporter must be assigned to each Benefit Option for the Payment Setup process to be complete.

There are two source types that can submit cost data: the Plan Sponsor and Vendor(s). A Plan Sponsor is considered a single source regardless of the number of individual Cost Reporters assigned to the Plan Sponsor's application. Each Vendor is considered a single source regardless of the number of individual Cost Reporters assigned to the Vendor.

Note: Plan Sponsor Cost Reporters and Vendor Cost Reporters are separate sources. Source becomes particularly important if multiple Cost Reporters report costs on the same Benefit Option for the same plan month. Cost data reported by the same source replaces previously submitted data, while cost data reported by different sources are added together.

Answer ID: 800-7
Date Posted: 10/17/2014

Return to top

What is a Payment Requester?

ANSWER: A Payment Requester is an individual granted permission to create and submit interim payment requests and prepare the final Reconciliation payment request using the RDS Secure Website. Only the Authorized Representative can submit the final Reconciliation payment request. The Authorized Representative always has the Request Payment privilege for all the applications they are assigned. The Account Manager and Designees may also be assigned the Request Payment privilege for submitting interim payment requests and for helping to prepare the Reconciliation payment request. For more information on which Reconciliation steps are accessible for users assigned the Request Payment privilege, refer to User Roles and Responsibilities in the Reconciliation Steps. The Request Payment privilege is assigned at the application level.

Answer ID: 800-8
Date Posted: 10/17/2014

Return to top

How do I complete Payment Setup?

ANSWER: For Payment Setup guidelines and step-by-step instructions, refer to Complete Payment Setup.

Answer ID: 800-9
Date Posted: 10/17/2014

Return to top

What is the change Payment Setup feature?

ANSWER: The Change Payment Setup feature allows Plan Sponsors to modify existing Report Cost and Request Payment privileges as needed for reporting costs, requesting payment, and completing Reconciliation.

CMS' RDS Center does not limit the number of times changes can be made to Payment Setup. However, Payment Setup must be completed before submitting a cost report or making a payment request.

Before cost data is reported, anything can be changed in Payment Setup. It is not until after cost data has been reported that there are rules on what can be changed within Payment Setup.

Answer ID: 800-10
Date Posted: 10/17/2014

Return to top

Which steps of Payment Setup can be modified?

ANSWER: The Payment Setup process consists of six steps, and once submitted, a Plan Sponsor may only modify Steps 2, 3, 4, and 5. If Steps 2, 3, 4, or 5 are modified, Step 6 automatically changes to a status of "Incomplete." The Plan Sponsor must then return to Step 6: Final Review to Complete Payment Setup to verify and submit any changes.

Answer ID: 800-11
Date Posted: 10/17/2014

Return to top

Who can change Payment Setup?

ANSWER: The Authorized Representative or Account Manager can make changes to Payment Setup. Refer to User Roles and Privileges to Change Payment Setup for additional information.

Answer ID: 800-12
Date Posted: 10/17/2014

Return to top

How do I change Payment Setup?

ANSWER: For guidelines and step-by-step instructions, refer to Change Payment Setup.

Answer ID: 800-13
Date Posted: 10/17/2014

Return to top

Are there any limitations when making changes to Payment Setup?

ANSWER: Yes. The following actions are not allowed in Payment Setup if a Cost Reporter has submitted a cost report:

After cost data has been reported:

  • You cannot remove the Report Costs privilege from the Account Manager or Plan Sponsor Designee if that specific person reported costs;
  • You cannot remove a Vendor after the Vendor reported costs; and
  • You cannot remove a Benefit Option from a specific Cost Reporter after that Cost Reporter reported costs.

Refer to Limitations When Making Changes to Payment Setup for additional information.

 

Answer ID: 800-14
Date Posted: 10/17/2014

Return to top

I need to change my cost reporting Vendor. How do I go about doing that?

ANSWER: Either the Plan Sponsor or another Vendor can take over cost reporting for the application. Through Payment Setup, a new cost reporting source (Plan Sponsor or Vendor) should be added to the application and associated with the proper Benefit Option. The previous Vendor cannot be removed as a Cost Reporter if costs were submitted by that Vendor.

It is essential that the current and previous Cost Reporters share information to coordinate the Threshold Reduction and Limit Reduction for each individual Qualifying Covered Retiree (QCR) across cost reporting sources. The Cost Threshold and Cost Limit must be applied to each individual QCR on an application regardless of the number of sources reporting costs for the QCR. For examples of how to coordinate thresholds and limits, refer Coordination of Individual Retiree Cost Data.

When reporting interim costs, previously reported costs should not be duplicated by the new Cost Reporter. Prior to the new Cost Reporter re-reporting current aggregated costs for a plan month, the previous Cost Reporter should submit a cost report containing zero dollar figures.

During the Reconciliation of an application, aggregated current costs must be re-reported for all plan months. If possible, all final current costs for a Benefit Option should be submitted by a single cost reporting source to prevent reporting duplicate costs. If all costs are reported by the new Cost Reporter, there is no need for the previous Vendor to submit final costs.

For more detailed information, refer to the Technical Article Changing Cost Reporter Vendors in the RDS Program Website Resource Library.

Answer ID: 800-15
Date Posted: 10/17/2014

Return to top