Medicare Transitional Drug Assistance Program For States


To provide Federal funding for transitional assistance to certain low-income Medicare beneficiaries, for the purchase of prescription drugs as referenced in Section 1860D-31(b)(2) of the Act.

General information about this opportunity
Last Known Status
Deleted 08/20/2009 (Archived.)
Program Number
Federal Agency/Office
Type(s) of Assistance Offered
Direct Payments for Specified Use.
Program Accomplishments
In fiscal year 2004 credits are to be made available to each transitional-assistance eligible Medicare beneficiary electing to participate in the program.
Authorized under the Medicare Prescription Drug, Improvement, and Modernization Act of 2003, Public Law 108-73, Section 1860D-31 of the Social Security Act (the Act).
Who is eligible to apply/benefit from this assistance?
Applicant Eligibility
A non-governmental, single legal entity doing business in the United States; having three years of private sector experience in the United States in pharmacy benefit management; and at the time of application for Medicare endorsement, it or a subcontractor, operates a pharmacy benefit program, a prescription drug discount card program, a low-income drug assistance program, or a similar program that serves at least one million covered lives and meets the requirements in 42 CFR 403.804 and 42 CFR 403.806.
Beneficiary Eligibility
Individuals who are Medicare beneficiaries, and whose income is not more than 135 percent of the poverty line. To qualify beneficiaries must not receive outpatient drug coverage from other sources, including Medicaid, TRICARE, group health insurance or Federal Employee Health Benefit Plans (FEHBP), except if the drug coverage is through a Part C Medicare+Choice plan or a Medigap plan.
What is the process for applying and being award this assistance?
Pre-Application Procedure
None. This program is excluded from coverage under E.O. 12372.
Application Procedure
Potential sponsors apply to CMS to become an approved drug discount card sponsor, to administer transitional assistance funds. Beneficiaries complete an enrollment form, which includes eligibility information, and submit it to an approved sponsor. The sponsor forwards the enrollment and eligibility information to CMS, which verifies eligibility for the card and for transitional assistance.
Award Procedure
Transitional assistance funds are drawn down by sponsors through the CMS payments management system on behalf of their transitional assistance enrollees, as the $600 credit is used by beneficiaries to pay for covered discount card drugs.
No further funds are available after December 31, 2005. (Medicare Part D provides a new drug benefit after this date.)
Approval/Disapproval Decision Time
19 months.
Sponsors whose applications to become an approved discount card sponsor are rejected have the right to a reconsideration process. Beneficiaries who are found by CMS to be ineligible for transitional assistance have the option of filing for reconsideration in accordance with 42 CFR 403.810(g).
How are proposals selected?
Not applicable.
How may assistance be used?
Credits will be administered through private discount card sponsors in accordance with the requirements of 42 CFR 403.806, 403.808, and 403.816 for the transitional assistance benefit.
What are the requirements after being awarded this opportunity?
Periodic reports are due to CMS is accordance with the timeframes established by CMS.
Payment transactions may be audited by the Secretary or his agent.
Financial records, supporting documents, statistical records, and all other records pertinent to the project shall be retained for at least three years or until resolution of any audit questions.
Other Assistance Considerations
Formula and Matching Requirements
This program has no matching requirements.
Length and Time Phasing of Assistance
Project Period: May 3, 2004 through December 31, 2005.
Who do I contact about this opportunity?
Regional or Local Office
Not applicable.
Headquarters Office
Program Contact: Cynthia Moreno, Center for Beneficiary Choices, Health Plan Benefits Group, 7500 Security Boulevard, Baltimore, MD 21244. Telephone (410) 786-1164.
Website Address
Financial Information
Account Identification
FY 03 $0; FY 04 est $2,286,000,000; FY 05 est $2,792,000,000.
Range and Average of Financial Assistance
Up to $600 in 2004 and 2005 per transitional-assistance eligible Medicare beneficiary electing to participate in the program.
Regulations, Guidelines and Literature
Regulations governing this program were authorized under Section 1860D-31 of the Social Security Act, as enacted under Public Law 108-73, and were published on December 15, 2003.
Examples of Funded Projects
Not applicable.


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