September 2014 Retiree Drug Subsidy (RDS) Community Information Group (CIG) Webinar: Navigating the Application Submission Process

The Retiree Drug Subsidy (RDS) Community Information Group (CIG) hosted a webinar on Wednesday, September 10, 2014 to assist the Plan Sponsor community in preparing to submit 2015 RDS applications. Over 200 individuals attended the webinar allowing them to stream audio and view presentation slides.

The webinar covered the following topics:

Review these topics for a summary of the information presented, as well as links to recommended resources.

Webinar Topics:

The RDS Program: An Overview

Participants were provided with a high-level overview of the history of RDS and the benefits of the program, as well as directions on where to find information about RDS taxation. 

RDS was created in response to the Medicare Prescription Drug, Improvement, and Modernization Act of 2003. Its purpose is to encourage employers and unions to continue providing high quality prescription drug coverage to their Medicare eligible retirees through a retiree drug subsidy that is flexible enough to enable employers and unions to obtain the subsidy without disrupting the retiree's current coverage.

RDS benefits both taxpayers and retirees. By Plan Sponsors participating in the RDS Program, tax savings are realized, and the retiree is afforded prescription drug coverage which is comparable to or better than Medicare Part D benefits. Because those retirees are not in Medicare Part D but are covered under the Plan Sponsor's prescription drug benefits, for which the Plan Sponsor receives a subsidy by Medicare, for a portion of the incurred costs the RDS Program saves taxpayers money. Approved RDS applications have covered 11.7 million Qualifying Covered Retirees.

For information about RDS taxation, participants were encouraged to review the Frequently Asked Questions on the Internal Revenue Service's (IRS) website.

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What's New in RDS?

Next, participants were provided with information about the following new system updates that have either already been implemented or will be implemented in the next several months:

  • RDS Secure Website User Password Issue Resolved: On July 28, CMS' RDS Center communicated a workaround for a user password issue. The issue has since been resolved.
  • Disabled User Rule Changing: Currently, users are required to log in to the RDS Secure Website every 60 days to maintain an active user account and also required to change their password every 60 days. CMS' security requirements have changed so that users will only need to log in/change their password every 180 days. This change will be implemented in the next several months.
  • New Initiative: User Automation: In the coming months, users will no longer need to contact CMS' RDS Center to recover their user name, fix an invalid email address, have their account re-enabled, and unlock security questions. CMS is implementing system updates to allow users greater control of their accounts. Additionally, in early 2015, CMS' RDS Center will be implementing an Inquiry Form in the RDS Secure Website that will allow users to submit a question or document an issue. Users will receive an email response with detailed instructions.
  • CMS' RDS Center Changing Banks: CMS' RDS Center will be transitioning its Electronic Funds Transfer vendor from JP Morgan to Citibank. This switch should have no effect on Plan Sponsors receiving payment; however, Plan Sponsors may want to notify their financial department of the change, as it may appear on bank statements.
  • RDS Welcome Kit Available: An RDS Welcome Kit is available in the Reference Materials section of the RDS Program Website. Its purpose it to help new Account Managers, Authorized Representatives, Actuaries, and Designees learn more about their roles and how to efficiently and effectively navigate the application process.
  • Updates to Current Resources: The RDS User Guide, Reconciliation Guide, and How To pages have been combined into one comprehensive User Guide to streamline the user experience. In coming weeks, the Sample Retiree File Spreadsheet will be updated to be more user-friendly with clearer instructions.

Participants were reminded to verify their email addresses in the RDS Secure Website to ensure they receive important email communication such as deadline reminder emails, application approval notifications, and announcements about upcoming site changes. Users can validate their information by going to the Account Settings box in the RDS Secure Website and selecting the Manage User Information link. 

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New to RDS: Getting Started

Participants were then provided an overview of what Plan Sponsors need to know to get started in RDS.

Program Eligibility

To be eligible for the RDS Program:

  • A Plan Sponsor organization must fall under one of the following categories: Commercial, Government, Nonprofit, Religious, or Union; have a valid Employer Identification Number (EIN); and not be on a debarment/exclusion list.
  • A Plan Sponsor's Prescription Drug Plans must be equal to or greater than Medicare Part D coverage and prove "Actuarial Equivalence."
  • Qualifying Covered Retirees must be a retiree, spouse, or dependant; covered under the Plan Sponsor's Prescription Drug Plan; and eligible for but not enrolled in a Medicare Part D plan.

RDS User Roles

Participants were provided with an overview of the responsibilities of each RDS user role: Account Manager, Authorized Representative, Actuary, and Designee (optional). For more information about user roles and how each fits into the various phases of an RDS application, refer to the RDS Welcome Kit User Roles Support Tool.

For the Application Submission Process, each user role does the following:

  • Account Manager: Creates the Plan Sponsor Account and invites the Authorized Representative (if enrolling in RDS for the first time); manages the application through the process and ensures timely submission.

    Tip: When entering the Plan Sponsor name while creating the Plan Sponsor Account, enter the first 50 characters – do not abbreviate the Plan Sponsor name. Abbreviations could prevent CMS' RDS Center from finding a match when verifying the organization's EIN documentation and delay the registration process.

  • Authorized Representative: Serves as the Plan Sponsor's legally binding authority by verifying and signing the Plan Sponsor Agreement; submits the Valid Initial Online Application.
  • Actuary: Attests to the actuarial equivalence of the Plan Sponsor's Benefit Options.
  • Designee: Optional user role that can assist with many aspects of the RDS application, depending on what privileges he/she is assigned by the Account Manager or Authorized Representative. In the Application Submission Process, a Designee can be granted privileges such as Assign an Actuary, Define Benefit Options, Define Payment Frequency, View/Send/Receive Retiree Data, and Request Extension. For a complete list of Designee privileges, refer to RDS User Roles and Other Stakeholders.

    Note: If assigning a Vendor Designee, review Set Up a Vendor Designee in Payment Setup and the Quick Access Reports (QAR) Guide.

Participants were also provided with an overview of managing RDS user roles. For more information, refer to the User Management section of the RDS User Guide.

Note: Only the current Account Manager or Authorized Representative can reassign the Account Manager or Authorized Representative roles. If both users are leaving the Plan Sponsor organization, reassign those roles before both individuals leave.

User Registration

When an Account Manager enrolls the Plan Sponsor in the program, they register themselves. Other users receive an invitation email from CMS' RDS Center. Users then provide personal information and create a Login ID and Password. When they have been approved for their user role, CMS' RDS Center sends an activation email.

Maintaining an Active User Account

Participants were reminded that Federal Security Regulations require all users to maintain an active user account. The Account Manager and Authorized Representative must have active user accounts to receive payments, submit an application, and complete Reconciliation. The Actuary must also have an active user account to attest an application. When the Account Manager, Authorized Representative, or Actuary hasn't registered successfully or has an inactive account, a warning message displays on the Application Status page in the RDS Secure Website.

Communications With CMS' RDS Center

CMS' RDS Center's primary means of communication with the Plan Sponsor is through email. Users should check SPAM filters to ensure they are not missing any emails such as registration invitation and success emails; application approval; and deadline reminder emails.

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The Application Process

Participants reviewed important information about the Application Submission Process such as application submission requirements, important dates, and ways to expedite the application process.

Annual Activities

Each year, a Plan Sponsor must submit an application using the same Plan Sponsor ID. Before the Application Deadline, a Plan Sponsor must submit both a Valid Initial Online Application and a Valid Initial Retiree List.

Timeline and Important Dates

For applications with a January 1, 2015 Plan Year Start Date, the original Application Deadline is October 2, 2014, and the Application Deadline with a 30-day extension is November 3, 2014. The Medicare Open Enrollment Period (OEP) begins on October 15. This means that, for those applications with a November 3 extended deadline, retirees could attempt to enroll in Medicare Part D while the Plan Sponsor is trying to establish RDS Qualifying Covered Retirees. For more information on the impact of OEP, review the recap article for the July 2014 RDS CIG Webinar: Preparing for the Medicare Part D Open Enrollment Period. Refer to Important Application Deadline Information for the most common Plan Year Start Dates and associated application deadlines.  

Create Your 2015 Application

Participants were shown how to create a new application in the RDS Secure Website. Refer to Start a New Application in the RDS User Guide for step-by-step instructions to complete this process.

Extend Your Application Deadline

Plan Sponsors may request one 30-day Application Deadline Extension prior to the Application Deadline. Refer to Request an Application Deadline Extension for additional information and step-by-step instructions to request an Application Deadline Extension. Additionally, refer to Complete the Application Submission Process for information and step-by-step instructions to complete the application.

Expedite the Application Process

Next, participants were shown the various application process paths to help expedite the Application Submission Process. The application step paths do not have to be completed sequentially. There are multiple paths with dependencies.

Path 1: After the Plan Sponsor completes Steps 1 through 3, the Actuary can attest the Benefit Option(s) in Step 4.

Consider the following questions when preparing to complete Steps 2 through 4:

  • Did your prescription drug plans change from last year? Do you have different Benefit Options and enrollments than last year? Did you add new prescription drug plans for retirees (have more Benefit Options) this year? A Unique Benefit Option Identifier needs to be assigned for each drug plan.
  • Are your prescription drug plans actuarially equivalent to Medicare Part D? The Actuary will need to attest all Benefit Options. Benefit Options can be combined for actuarial equivalence. What is your Actuary's current email address? You will need this to information to invite the Actuary to attest.

Path 2: While waiting for the Actuary to complete Step 4, the Plan Sponsor can begin preparing the Valid Initial Retiree List to complete Step 9. Once Benefit Options are assigned, the Plan Sponsor can specify the EDI Methods and Sources in Step 7. The Valid Initial Retiree List in Step 9 will be submitted by the methods and sources defined in Step 7.

Consider the following questions when preparing to complete Steps 7 and 9:

  • Who is going to compile the Valid Initial Retiree List? Will it be the PBM managing enrollment, a Vendor, or the Plan Sponsor? Is the Account Manager going to start with last year's Covered Retiree List, make updates, and upload it?
  • Who is going to submit the Valid Initial Retiree List? Will it be the Vendor, Coordination of Benefits (COB) contractor, Designee, or Account Manager?
  • How will the Valid Initial Retiree List be communicated to CMS' RDS Center? Will it be uploaded on RDS Secure Website, or sent using Mainframe or VDSA/MIR? The Plan Sponsor may start with upload on the RDS Secure Website and then switch after the Valid Initial Retiree List is verified.
  • How will you receive response and notification files? Is it by the same method as you will receive files for the Valid Initial Retiree List? If the files are going back to a Vendor's Mainframe or a COB contractor, do you also want a copy to go to RDS Secure Website for the Plan Sponsor to view?

For information about determining EDI Methods and Sources, refer to the EDI Methods and Sources Job Aid.

Tip: If the Plan Sponsor's Benefit Options are the same as the last application plan year, and there is little change in enrollment or plan enrollment is not yet complete, the Plan Sponsor can recycle last year's Covered Retiree List. Download the Covered Retiree List for last year's application, change information such as Application ID, Plan Year Start and End Dates, and Unique Benefit Option Identifiers, and upload it to the RDS Secure Website as the Valid Initial Retiree List for the current application plan year. For information and step-by-step instructions to upload a retiree file on the RDS Secure Website, refer to Submit a Valid Initial Retiree List and Monthly Retiree List in the RDS User Guide.

Note: CMS' RDS Center is actively working to correct a system issue that is preventing Plan Sponsor's from uploading retiree files for 2016 applications.

Path 3: While the Plan Sponsor is waiting for the Actuary to complete Step 4 or working with the PBM to decide EDI Methods and Sources for Step 7, the Plan Sponsor can record banking information in Step 5 and define Payment Frequency in Step 6.

To complete Steps 5 and 6: 

  • Have the following Plan Sponsor banking information: Bank Name and Address; Checking or Savings, Account and Routing Numbers; bank contact name, phone, and email address.
  • Consider the following payment frequencies: Monthly, Quarterly, Annual, and Interim Annual. If you are unsure as to which to choose, consider the Monthly Payment Frequency, as it provides the most flexibility and options.

Path 4: Once Steps 1 through 7 are complete, the Authorized Representative can submit the application in Step 8. The Valid Initial Retiree List is not needed to submit the Valid Initial Online Application. However, the Valid Initial Retiree List needs to be receipted by the Application Deadline in order to complete the application process.

The following important dates display on the Application Status page:

  • Application Deadline
  • Valid Initial Online Application Submitted Date
  • Valid Initial Retiree List Received Date 

Tip - Application Deadline Troubleshooting: If a Plan Sponsor misses the Application Deadline, it can still participate in the program. Plan Sponsors can start another application and specify a later Plan Year Start Date to calculate a deadline that can be met.

For additional information on the Application Submission Process steps, review the following resources:

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Next Steps in the Application Process

Participants reviewed both CMS' RDS Center's and the Plan Sponsor's next steps after the Application Submission Process is complete.

CMS' RDS Center Next Steps

After submission of the Valid Initial Retiree List and the Valid Initial Online Application, CMS' RDS Center does the following:

  • Checks if the Plan Sponsor is debarred from doing business with Federal government
  • Verifies that the Valid Initial Online Application and the Valid Initial Retiree List were timely and the deadline was met
  • Contacts the Medicare Beneficiary Database (MBD)
  • Calculates Subsidy Periods and establishes Qualifying Covered Retirees
  • Produces a Retiree Response File with reason codes if RDS did not approve the Subsidy Period the Plan Sponsor requested
  • Sends a pre-note to the Plan Sponsor's bank to verify banking information
  • Updates the application status to "Approved" and notifies the Plan Sponsor by email

The following application statuses and their meanings were reviewed:

  • Incomplete: Plan Sponsor has started the application and has not yet submitted it
  • Submitted: Plan Sponsor signed and submitted the online application
  • Approved: Application is approved and validated by CMS' RDS Center
  • Denied: Application failed validation and is denied by CMS' RDS Center
  • Application Error: CMS' RDS Center recorded a pre-note failure
  • EFT Resign: Plan Sponsor changed EFT information

Plan Sponsor's Next Steps

Once the Plan Sponsor's application is approved, it should:

  • Notify its Vendor. The Vendor may need to send CMS' RDS Center retiree updates or get set up to calculate costs.
  • Send in the Authorized Representative Verification Form (only if the Authorized Representative changed from last year)
  • Complete Payment Setup to define Cost Reporters and Payment Requesters
  • Continue to manage Qualifying Covered Retirees
  • Distribute the Covered Retiree List to Cost Reporters
  • Set up Quick Access Reports if managing multiple applications.
  • Note: Vendor Designees should work with an Electronic Data Interchange (EDI) Representative to get set up as the Vendor Composite Reporter, or find the person in the Plan Sponsor organization who is receiving the Vendor Cost Report summary.

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Upcoming Webinars

Plan Sponsors and Vendors are encouraged to monitor the RDS Program Website for announcements about upcoming webinars.

Need Assistance?

Check out the Resource Library to review all the information available to you on the RDS Program Website. If you have questions or need additional information, contact CMS' RDS Center.

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