Ordinarily, waiver and compromise requests are submitted in response to an invoice or demand letter. Submitting waiver or compromise requests prior to receipt of an invoice or demand letter does not relieve the U.S. Government of its statutory and regulatory obligations to issue invoices and demand letters. Invoices are mailed at least 30 days prior to the scheduled payment due date, which will be no earlier than 70 days from the date the utilization data were submitted. If full payment is not received by the scheduled due date, a demand letter will be sent to the manufacturer. 30 days after the date of the demand letter, any remaining debt will be transferred to the Defense Health Agency Office of General Counsel Claims Collection Section for collection. During the pendency of a waiver or compromise request, the matter that is the subject of the request shall not be considered a failure of the manufacturer to honor an agreement for purposes of paragraph 199.21(q)(4). If the waiver or compromise request is denied, interest, penalties, and fees will accrue from the date of the invoice. If the waiver or compromise proposal is accepted, interest, penalties, and fees will be addressed in the resulting waiver or compromise agreement.

The presumption is that the U.S. Government’s utilization data are correct. Invoices are mailed at least 30 days prior to the scheduled payment due date, which will be no earlier than 70 days from the date the utilization data were submitted. If full payment is not received by the scheduled due date, a demand letter will be sent to the manufacturer. Thirty days after the date of the demand letter, any remaining debt will be transferred to the Defense Health Agency (DHA) Office of General Counsel Claims Collection Section for collection. A refund obligation as to the amount in dispute will be deferred pending good faith efforts to resolve the dispute in accordance with procedures established by the Director, DHA. When the dispute is resolved, any refund owed relating to the amount in dispute will be subject to interest, penalties, and fees from the date payment of the amount was initially due, consistent with 199.11. See 32 C.F.R. § 199.21(q)(3)(iv).

NDCs listed on the Appendix A are covered drugs under 32 CFR 199.21(q)(2)(iii) which states, "For purposes of this paragraph (q)(2), a covered drug is a drug that is a covered drug under 38 U.S.C. 8126" If TRICARE provides utilization data of covered drugs from the retail setting, a refund is owed. The presumption is that the U.S. Government’s utilization data is correct, a manufacturer may dispute the accuracy of the Defense Health Agency’s utilization data see 32 C.F.R. § 199.21(q)(3)(iv).

NDCs listed on the Appendix A are covered drugs under 32 CFR 199.21(q)(2)(iii) which states, "For purposes of this paragraph (q)(2), a covered drug is a drug that is a covered drug under 38 U.S.C. 8126" If TRICARE provides utilization data of covered drugs from the retail setting, a refund is owed. The presumption is that the U.S. Government’s utilization data is correct, a manufacturer may dispute the accuracy of the Defense Health Agency’s utilization data see 32 C.F.R. § 199.21(q)(3)(iv).

Yes supply products are not subject to prior authorization, this program applies to covered drugs under 32 CFR 199.21(q)(2)(iii) which states, "For purposes of this paragraph (q)(2), a covered drug is a drug that is a covered drug under 38 U.S.C. 8126" If TRICARE provides utilization data of covered drugs from the retail setting, a refund is owed. The presumption is that the U.S. Government’s utilization data is correct, a manufacturer may dispute the accuracy of the Defense Health Agency's utilization data see 32 C.F.R. § 199.21(q)(3)(iv).

The pricing agreements signed after issuance of the 2009 final rule will remain in effect when the 2010 final rule becomes effective December 27. For drugs covered by an existing pricing agreement there is no need to execute new pricing agreements under the new final rule.

Also, the following statement previously posted on DoD's website remains in effect under the new 2010 final rule. It continues to apply to current and any new pricing agreements and states as follows:

Questions have arisen about the effect of Section VII.(f) of the pricing agreement template. Section VII.(f) provides: "Nothing in the Agreement shall be construed as a waiver or relinquishment of any legal rights of the Manufacturer or the DoD under the Constitution, the Act or Federal laws." The following will clarify the applicability of Section VII. (f). (The language of Sec. VII. (f) and the following statements may be included in a pricing agreement acceptable to DoD that is not the template for pricing agreements):

• Executing a pricing agreement does not waive a signatory manufacturer's right to challenge the validity of the Final Rule or DoD's right to defend the validity of the Final Rule;
• With respect to any prescription transaction (covered by the Final Rule) that occurs before the date that a pricing agreement is executed by a manufacturer and DoD, the executing of a pricing agreement does not establish liability to DoD and is not an admission of liability, or a waiver of any claim for monetary relief, by the signatory manufacturer concerning the transaction; and
• With respect to any prescription transaction (covered by a pricing agreement) that occurs on or after the date that the agreement is executed by a manufacturer and DoD, all parties to the agreement reserve their claims as to the validity and enforceability of the provisions in the agreement.

Yes. See section 199.21(q)(3)(111)(C) of the rule regarding the voluntary removal, by the manufacturer in writing, of a drug from coverage in the TRICARE Pharmacy Benefit Program.

Yes

The Defense Health Agency (DHA) deferred action on the pending requests until the new final rule was completed. DHA expects to address the pending requests soon. Manufacturers are free to submit revised compromise requests if they wish.

The Defense Health Agency (DHA)’s agency authority to grant compromise of debt principal is limited to debts of less than $100,000 by 31 U.S.C. § 3711(a)(2). DHA is only required to refer waiver/compromise requests for larger debts to the Department of Justice (DOJ) where DHA believes granting compromise of debt principal is appropriate. See 31 C.F.R. § 903.1(b). If DHA believes granting compromise is inappropriate, DHA cannot refer a manufacturer’s request to the DOJ. While no authority mandates that government agencies formally deny every waiver/compromise request made by their debtors, DHA has the clear authority to deny requests as appropriate. DHA will not delay the transfer of debts to the Department of the Treasury or the DOJ for enforced collection and/or litigation in cases where manufacturers withhold debt payments based upon legally unsupportable rationales.

Based upon analysis of the utilization data used in prior billings, TRICARE determined it must re-bill through 4th Quarter of Calendar Year 2011. TRICARE does not anticipate re-billing any additional quarters will be necessary.

Nevertheless, if there are significant changes to manufacturer utilization data or refund calculations, TRICARE may be required to re-bill additional quarters.

Utilization File – This file will be the first notice to the Pharmaceutical Manufacturer that a pharmacy refund is due the government. This file includes the Defense Health Agency (DHA) drug purchases for the applicable quarter. Payment of the utilization refund is due to the government 70 days after it has been made available to the Pharmaceutical Manufacturer.

Invoice/Demand Letter – These terms have the same meaning. They refer to the Demand Letter issued 30 days before the scheduled payment due date (70 days after the Utilization File is made available to the Pharmaceutical Manufacturers). This letter is the official "invoice" from the government that defines the payment due date and fees (Penalty/Administrative/Interest) that will be incurred if not paid by the scheduled payment due date.

2nd Demand Letter – This letter will only be issued if there is an outstanding balance that has not been paid by the scheduled payment due date. The 2nd Demand Letter will be issued one to three days after the scheduled payment due date.

Scheduled Payment Due Date – The "scheduled payment due date" will be 70 days after the Utilization File is made available to the Pharmaceutical Manufacturer. This date will be cited in the Invoice/Demand Letter. If payment is received on or before this date, additional fees (Penalty/Administrative/Interest) will not be incurred.

All billings/invoices not paid by the scheduled payment due date are subject to interest and miscellaneous fees. Invoice/Demand Letters will be issued for all increases to prior billed amounts. Fees will be assessed on this debt if not paid by the scheduled payment due date.

Interest will accrue on any outstanding balances that become delinquent after the scheduled payment due date has passed. It will assess from the date of the initial demand letter, accruing daily until balance is paid in full. The interest rate applied to the calendar quarter is stated in the Demand Letter. Interest is calculated as Days delinquent*/ 365 days X Interest Rate X Remaining Principal.

*Interest Days delinquent = date of initial demand letter to today’s date or from prior payment where fees were charged to today’s date*= date of initial demand letter to today’s date or from prior payment where fees were charged to today’s date.

Administrative Fees will accrue on any outstanding balances that becomes delinquent after the scheduled payment due date has passed. These fees accrue every thirty (30) days until balance is paid in full up to a maximum amount of $195.64.

Penalty will accrue on the 91st day of delinquency for the first ninety (90) days and will continue to accrue every thirty (30) days after on any outstanding balances. The interest rate for Penalty is set at 6%. Penalty is calculated as Days delinquent */ 365 days X 0.06 X Remaining Principal.

*Penalty Days delinquent = day after scheduled payment due date to today’s date or from prior payments where fees were charged to today’s date.

There may be changes to manufacturer utilization data. Such as, Coordination of Benefit (COB) claims with an Other Coverage Code (OCC) of 3, which indicates that the drug is not covered by the primary insurer were erroneously omitted from the utilization data. OCC‐3 claims are now included in the utilization data since TRICARE is first payer in those instances.  Also it was noted that self‐reported non-FAMP and FCP pricing information were sometimes not consistent with what was reported to the VA. Please email your DHA-assigned refund analyst with a copy for questions regarding your utilization data.

Yes. Any ADP/Voluntary Agreement for TRICARE Pharmacy Retail Refunds (VARR) payments made must be equal to or greater than the SDP/Mandatory Minimum Refund (MARR) established under the Final Rule. If an ADP payment previously made is less that the SDP refund amount, the difference between the two (SDP minus ADP) is due.