Program Components:
This page contains answers to Common Questions about Payment Setup. Review this page to learn about how to complete and change Payment Setup, who can complete and change Payment Setup, and more. For additional information refer to the Payment Setup section of the RDS User Guide.
- What is Payment Setup?
- What are the steps of the Payment Setup Process?
- Who can complete Payment Setup?
- Are there any guidelines or restrictions regarding Payment Setup?
- What is cost reporting?
- How are cost reports submitted to CMS' RDS Center?
- What is a Cost Reporter?
- What is a Payment Requester?
- How do I complete Payment Setup?
- Can I change Payment Setup?
- Who can change Payment Setup?
- How do I change Payment Setup?
- Are there any limitations when making changes to Payment Setup?
- I need to change my cost reporting Vendor. How do I go about doing that?
What is Payment Setup?
ANSWER: Payment Setup is critical to the payment process as it affects the "who" and "how" of reporting costs and requesting payments.
Payment Setup is the process where the Plan Sponsor determines who reports cost data for each Benefit Option on the application, how the information is communicated to CMS' RDS Center, and who requests interim payments if the Plan Sponsor chooses to submit interim payment requests. During the Payment Setup process, the Plan Sponsor identifies individuals and/or Vendors responsible for reporting costs associated with each Benefit Option and requesting payments for an approved application..
Answer ID: 800-1
Date Updated: 4/15/2022
What are the steps of the Payment Setup Process?
ANSWER: The Payment Setup Process consists of the following steps:
Plan Sponsors cannot submit cost reports or payment requests until Payment Setup is complete.
For more information about each step, including the purpose of each step and how to complete it, refer to Payment Setup.
Answer ID: 800-2
Date Updated: 4/15/2022
Who can complete Payment Setup?
ANSWER: The Authorized Representative and Account Manager are the only RDS Secure Website user roles that have the authority to access Payment Setup.
Answer ID: 800-3
Date Updated: 4/15/2022
Are there any guidelines or restrictions regarding Payment Setup?
ANSWER: For an overview of guidelines and restrictions regarding Payment Setup, refer to Payment Setup in the RDS User Guide, specifically the subtopics:
Answer ID: 800-4
Date Updated: 4/15/2022
What is cost reporting?
ANSWER: Cost reporting is the process of reporting cost data for Qualifying Covered Retirees (QCRs) on an approved RDS application. Interim cost data may be reported throughout the plan year if the Plan Sponsor chooses to submit interim payment requests. Final cost data must be reported for an Annual Payment and final Reconciliation. All RDS applications have a maximum Payment Frequency of monthly interim payments, consistent with the general payment rules regarding timing set forth in 42 C.F.R. 423.888(b)(1). Although 12 interim payment requests are permitted, a Plan Sponsor may choose to submit fewer than 12 interim payment requests, or forego interim payments and instead choose to submit one final payment request during Reconciliation as described in 42 C.F.R. 423.888(b)(2)(ii).
Federal law requires that cost data is submitted only for the QCRs, corresponding Subsidy Periods, and the Benefit Options in which each QCR is enrolled. Refer to Prepare Cost Data, Submit Interim Costs, and Manage Final Costs for additional information.
Cost reporting assignments must be completed in Payment Setup prior to submission of cost data.
.Answer ID: 800-5
Date Update: 4/15/2022
How are cost reports submitted to CMS' RDS Center?
ANSWER: Cost Reporters report cost data to CMS' RDS Center for Qualifying Covered Retirees by Manual Data Entry on the RDS Secure Website or by Connect:Direct. Refer to Prepare Cost Data, Submit Interim Costs, and Manage Final Costs for additional information.
Answer ID: 800-6
Date Update: 4/15/2022
What is a Cost Reporter?
ANSWER: A Cost Reporter is an individual or a Vendor that is responsible for submitting drug cost data to CMS' RDS Center. During the Payment Setup process, Plan Sponsors identify Cost Reporters for each Benefit Option defined within an application. Plan Sponsors may choose to assign any of the following as Cost Reporters: the Account Manager, any existing Designee already assigned to the application, any new Designee added to the application, or a Vendor. Cost Reporters are assigned to an application, and Benefit Options are then assigned to Cost Reporters. A Cost Reporter must be assigned to each Benefit Option during Payment Setup.
Two sources can submit cost data to CMS’ RDS Center: Plan Sponsor and Vendor(s). A Plan Sponsor is considered a single source regardless of the number of individual Cost Reporters assigned to the Plan Sponsor's application. Each Vendor is considered a single source regardless of the number of individual Cost Reporters assigned to the Vendor.
Note: Plan Sponsor Cost Reporters and Vendor Cost Reporters are separate sources. Source becomes particularly important if multiple Cost Reporters report costs on the same Benefit Option for the same plan month. Cost data reported by the same source replaces previously submitted data, while cost data reported by different sources are added together.
Answer ID: 800-7
Date Update: 4/15/2022
What is a Payment Requester?
ANSWER: A Payment Requester is an individual granted permission to create and submit interim payment requests and prepare the final Reconciliation payment request using the RDS Secure Website. Only the Authorized Representative can submit the final Reconciliation payment request. The Authorized Representative always has the Request Payment privilege for all applications to which they are assigned. The Account Manager and Designees may also be assigned the Request Payment privilege for submitting interim payment requests and for helping to prepare the Reconciliation payment request. The Request Payment privilege is assigned at the application level. For information on which Reconciliation steps are accessible for users assigned the Request Payment privilege, refer to User Roles and Responsibilities in the Reconciliation Steps.
Answer ID: 800-8
Date Updated: 4/15/2022
How do I complete Payment Setup?
ANSWER: For Payment Setup guidelines and step-by-step instructions, refer to Payment Setup.
Answer ID: 800-9
Date Updated: 4/15/2022
Can I change Payment Setup?
ANSWER: Plan Sponsors can change Payment Setup to modify privileges as needed for reporting costs, requesting payment, and completing Reconciliation.
CMS' RDS Center does not limit the number of times changes can be made to Payment Setup. However, Payment Setup must be completed before submitting a cost report or making a payment request.
Before cost data is reported, anything can be changed in Payment Setup. After cost data has been reported, there are rules that govern what can be changed within Payment Setup. For more information, refer to Changing Payment Setup.
Answer ID: 800-10
Date Updated: 4/15/2022
Who can change Payment Setup?
ANSWER: The Authorized Representative or Account Manager can make changes to Payment Setup. For more information, refer to Changing Payment Setup.
Answer ID: 800-12
Date Updated: 4/15/2022
How do I change Payment Setup?
ANSWER: For guidelines and step-by-step instructions, refer to Changing Payment Setup.
Answer ID: 800-13
Date Updated: 4/15/2022
Are there any limitations when making changes to Payment Setup?
ANSWER: Yes. The following actions are not allowed in Payment Setup after cost data has been reported for an application:
- You cannot remove the Report Costs privilege from the Account Manager or Plan Sponsor Designee that reported costs for the application;
- You cannot remove a Vendor that reported costs for the application; and
- You cannot remove a Benefit Option from a specific Cost Reporter that reported costs for the application.
For more information, refer to Changing Payment Setup.
Answer ID: 800-14
Date Posted: 10/17/2014
I need to change my cost reporting Vendor. How do I go about doing that?
ANSWER: Either the Plan Sponsor or another Vendor can take over cost reporting for the application. Through Payment Setup, a new cost reporting source (Plan Sponsor or Vendor) should be added to the application and associated with the proper Benefit Option(s). The previous Vendor cannot be removed as a Cost Reporter if costs were submitted by that Vendor.
It is essential that the current and previous Cost Reporters share information to coordinate the Threshold Reduction and Limit Reduction for each Qualifying Covered Retiree (QCR) across cost reporting sources. The Cost Threshold and Cost Limit must be applied to each individual QCR on an application regardless of the number of sources reporting costs for the QCR. For examples of how to coordinate thresholds and limits, refer to Coordination of Individual Retiree Cost Data.
When reporting interim costs, previously reported costs should not be duplicated by the new Cost Reporter. Prior to the new Cost Reporter re-reporting current aggregated costs for a plan month, the previous Cost Reporter should submit a cost report containing zero-dollar figures.
During the Reconciliation of an application, aggregated current costs must be re-reported for all plan months. If possible, all final current costs for a Benefit Option should be submitted by a single cost reporting source to prevent reporting duplicate costs. If all costs are reported by the new Cost Reporter, there is no need for the previous Vendor to submit final costs.
For more detailed information, refer to the Technical Article Changing Cost Reporter Vendors in the RDS Program Website Resource Library.
Answer ID: 800-15
Date Updated: 4/15/2022