Archive: I have a PACE plan, will I get the discount on brand-name drugs purchased in the Coverage Gap?

No. The manufacturer discount on brand-name drugs purchased in the Coverage Gap (or Donut Hole) is applied AFTER the plan’s supplemental coverage - and since the Programs of All-Inclusive Care for the Elderly (PACE) pays 100% of the negotiated drug price in the Coverage Gap, once 100% (PACE’s portion of the supplemental benefit) is subtracted from the price, there is nothing (0%) left for the beneficiary to pay and therefore no manufacturer Donut Hole discount is applied to the brand-name drugs.

The Centers for Medicare & Medicaid Services (CMS) guidance further adds:

"Section 1860D-14A(c)(2) [of the Social Security Act] specifies that if a Part D sponsor offers supplemental Part D coverage, the discount will not be applied until after such supplemental coverage has been applied to the applicable [brand-name] drug. If the supplemental coverage eliminates the coverage gap (with the exception of routine cost sharing), no [Donut Hole] discount is available because the discount is only applied to the portion of the negotiated price that falls within a coverage gap. Therefore, PACE plans that have no coverage gap by statutory design are excluded from the Discount Program." [emphasis added]

See: https://www.cms.gov/Medicare/Prescription-Drug-Coverage/PrescriptionDrugCovContra/downloads/2011CoverageGapDiscount_043010.pdf (draft guidance: "Medicare Coverage Gap Discount Program beginning in 2011" 04/30/2010 and revised guidance "Medicare Coverage Gap Discount Program Beginning in 2011: Revised Part D Sponsor Guidance and Responses to Summary Public Comments on the Draft Guidance" 05/21/2010)

See also the Social Security Administration site for more on PACE:
https://www.ssa.gov/OP_Home/ssact/title18/1894.htm