Manufacturers Wrestle with TRICARE Data

By: Meredith Taylor, Esq., CIS Sr. Compliance Specialist & PCX Product Manager
meredithtaylor@cis-partners.com

By now, most manufacturers have filled out the necessary questionnaire to retrieve their utilization data and calculate TRICARE refunds. So, I assume that most manufacturers are in a very similar situation to those I have talked to…..frustrated beyond belief.

If you’ve been diligently checking in to www.tricare.mil/pharm_mfg/default.cfm to keep up with the TRICARE soap opera over the past few months, or if you’ve been reading the CIS updates, you are well aware of the following chain of events:

- TRICARE was historically a voluntary rebate program for those agents who were placed on the Department of Defense (DoD) Uniform Formulary.

- The National Defense Authorization Act 2008 (the Act) was passed on January 28, 2008.

- Section 703 of the Act states that the TRICARE retail pharmacy program is to be treated as an element of the DoD, for purposes of the procurement of drugs by Federal agencies who will be subject to Federal Ceiling Prices (FCP)

- The Act required the DoD to “modify the requirements under” the TRICARE Pharmacy Benefits Program “to implement the requirements” of the new Act.

- The DoD Proposed Rule was eventually promulgated on July 25, 2008 in the Federal Register.

- While the Rule is still proposed and not yet final, the Pharmaceutical Operations Directorate of TRICARE Management Activity has provided manufacturers the opportunity to accrue refunds, even though they are not yet required to do so, by releasing their utilization data.

- In order to procure the utilization data, manufacturers whose products appear on the Federal Supply Schedule (FSS) began receiving questionnaires as early as April 2008.

- In August 2008, the utilization data became available for manufactures to retrieve, assuming they filled out the questionnaire that was sent to them.

This brings us to present day, and the frustrations manufacturers are facing. The most common struggles are as follows:

Data is difficult to retrieve. Once the questionnaire is completed and returned, the manufacturer receives instructions to retrieve data through an Internet website. Once the manufacturer gets to this data, there is no refund amount; in fact, the data is divided into a number of different files that need to be pieced together. But that’s not the only problem, to make matters worse, the units are in metrics, so the manufacturer is forced to perform conversion calculations before the refund calculations can even be performed.

Reconciliation of State Invoices (ROSIs) are a Medicaid instrument and are not set up to report TRICARE rebates. Once the data is navigated, and the refund calculations are complete (difference between annual Non-FAMP and Federal Ceiling Price) the refunds need to be entered in to a Medicaid ROSI. No, not a TRICARE ROSI, the same Medicaid ROSI the manufacturer uses to submit rebates to state Medicaid agencies. This ROSI does not have the proper fields or headings for TRICARE data. This was highlighted as an anticipated problem by many manufacturers back in April (see my April 16, 2008 blog posting) and has now turned into a practical problem. Manufacturers must only submit one ROSI to the federal government, not the state, and use Medicaid dispute codes for TRICARE data. Some manufactures are attempting to tailor the Medicaid ROSI to TRICARE which adds one more step to this arduous process.

All products, branded and generic are included in the utilization data. An unexpected problem that many manufacturers encounter is that all of their products offered on the FSS are being returned in the utilization data. TRICARE refunds are only supposed to be calculated for branded products, yet the utilization data is for both branded and generic products, assuming the manufacturer chooses to offer generics on the FSS. This causes a problem because all of the data must be accounted for on the ROSI or it will not tie out. Therefore, the manufacturer must account for both branded and generic products, then enter an exemption code for the generic products. Yet another unnecessary step.

Unfortunately, these problems are common for both small and large manufacturers, and we can only hope they are just growing pains. We at CIS will continue to talk to manufacturers and share their problems and solutions. Please feel free to contact me to discuss this, or any TRICARE update, or if you just want to vent!

Good luck, and be on the lookout for the DoD Final Rule. The comment period was up on September 23, 2008, so a Final Rule could be around the corner. In the meantime, even if you aren’t calculating rebates because it’s not yet required, you should really be accruing for the refunds…