TRICARE Update: Where Oh Where is My Utilization Data?

By Meredith Taylor, Esq., CIS Compliance Specialist
meredithtaylor@cis-partners.com

In section 703 of the National Defense Authorization Act for Fiscal Year 2008, the DOD stated the TRICARE retail pharmacy program will be treated as an element of the DOD and is subject to Federal Ceiling Prices. In order to guide the manufacturers properly regarding processing and paying rebates, the DoD promised that they will modify their existing regulations by December 31, 2007. Obviously, this law was enacted on January 28, 2008, so that promise was impossible to keep; however, it’s now been almost three months and still no regulation.

There has, however, been guidance issued to tell the manufacturers how to proceed. In the February 2008 Dear Manufacturer letter, the DoD indicated that updates to the policies and procedures guide would be posted before the first utilization file is accessible. This letter stated that the DoD anticipated that the first data file would be available on April 15, 2008.

Well, April 15th has come and gone, and still no data file. The DoD did, however, post a “Process and Procedures Guide – Voluntary Agreements for Retail Refunds.” This guide provides manufacturers with all they need to know about how to process and pay TRICARE rebates……not really.

We have had various conversations with manufacturers over the past month, and they have raised many questions regarding the ambiguous language contained within that document. A few of those questions include:

1. Are we really supposed to use Medicaid ROSI templates to process TRICARE rebates?
2. When and how do you account for TRICARE Pharmacy rebate/refund payments in the calculation of Non-FAMP? During the quarter in which they are accrued, or during the quarter in which they were paid?
3. Does the DoD have the authority to tell us how to calculate Non-FAMP?
4. Does the CMS release 137 take precedent over the Final Rule in regard to treatment of TRICARE sales?
5. We know that we should exclude TRICARE sales from AMP and BP, but what do we do for ASP?

I am going to address all of these questions in CIS’s next Newsletter, but for now, I will provide you with an answer (interpretation) to the first question.
Page 13 of the April 2008 “Process and Procedures Guide – Voluntary Agreements for Retail Refunds” states:

"Manufacturers must use the CMS reconciliation of state invoice (ROSI) to provide product reconciliation. The manufacturer will use only valid adjustment and dispute codes for ROSI when returning this file for remittance."

This has led to confusion because ROSIs are used to process Medicaid rebate claims for the states. The utilization data that will be supplied to the manufacturers in regard to the TRICARE program will not be broken down by state. Moreover, the rebate is paid to the federal government, and not the state government.

The way we interpret this is as follows: the DoD would like the manufacturers to use the ROSI template to input TRICARE rebate data for each NDC. There will be only one ROSI created, rather than 50+, and it will be submitted to the federal government (the DoD). If the manufacturer has disputes or adjustments, the corresponding Medicaid codes should be used. The language in the Process and Procedures document is mandatory, so each manufacturer is required to prepare a ROSI.

I look forward to exploring these other issues in my newsletter article. If there are any other ambiguities or questions you have that you would like me to look into, please email me at meredithtaylor@cis-partners.com. If you are interested in subscribing to our newsletter, please visit www.cis-pcx.com. If you register for a free 30 day trial of the PCX, you will be automatically added to our newsletter distribution list. Or, you can email me directly and I can add you to the list.