CMS Pub. 100-18, ch. 12, § 20.14.1

CMS allows PDP sponsors to offer prescription drug benefits on a calendar year and on a non-calendar year basis (if PDP sponsors are approved to offer non-calendar year Part D EGWP

plan benefit packages). Negative formulary change requests for non-calendar year Part D

EGWPs are required to follow the same review and approval process as calendar year plans.

Thus, the time frame for non-calendar year Part D EGWPs to make negative changes is the

same as calendar year plans.

Non-calendar year Part D EGWPs may elect to convert to the conditionally approved

formulary for the next calendar year on January 1st. PDP sponsors offering non-calendar year

EGWPs that choose this option must provide appropriate beneficiary notice as specified in

423.120(b)(5). Alternatively, PDP sponsors offering non-calendar year Part D EGWPs whose

plan start date occurs after conditional approval of the formulary for the following calendar

year (CY) may elect to use that formulary for the entire non-calendar plan year. Any further

changes for the rest of the non-calendar year would have to be consistent with the process for

updating CY 2008 formularies and requesting negative formulary changes as described in the

HPMS memorandum, Updating CY 2008 Formularies, November 28, 2007.

The following example illustrates the above-stated policy. A non-calendar year Part D EGWP

with a start date of October 1, 2008, could either:

• Use its CY 2008 conditionally approved formulary throughout the employer/union

sponsor’s plan year (October 1, 2008 –September 30, 2009) and make no negative

changes;

• Use its CY 2008 conditionally approved formulary from October 1, 2008 – December

31, 2008 and its CY 2009 conditionally approved formulary from January 1, 2009 –

September 30, 2009) and request negative changes through July 31, 2009, in

accordance with the above-stated policy; or

• Use its CY 2009 conditionally approved formulary throughout the employer/union

sponsor’s plan year (October 1, 2008 – September 30, 2009) and request negative

changes through July 31, 2009, in accordance with the above-stated policy.