CMS has released for comment draft program instructions to Part D plan sponsors regarding implementation of the Medicare Coverage Gap Discount Program, enacted by the PPACA as amended by the Health Care and Education Reconciliation Act of 2010 (Reconciliation Act). In short, effective January 1, 2011, the Discount Program generally will make available to Medicare beneficiaries in the Part D coverage gap (sometimes called the "donut hole") manufacturer discounts equal to 50% of the negotiated price of the drug, except with respect to generic drugs. The draft instructions state that, with the exception of 2011, a drug will only be covered under Part D if the manufacturer has a signed agreement with CMS to provide the discount on coverage gap claims for all of its applicable drugs. CMS notes that because of the timing of Part D plan formulary submissions, CMS must allow coverage in 2011 of Part D drugs irrespective of manufacturer discount agreements, which could mean that some brand-name drugs on plan formularies will not be discounted in the coverage gap next year. CMS will provide additional guidance if this situation occurs. As also discussed in the draft program instructions, Part D sponsors will be required to provide the applicable discounts at point-of-sale, using funds provided by CMS through monthly prospective payments to pay pharmacies. CMS proposes to use a contractor to collect discount payments from manufacturers quarterly, based on new information to be submitted by Part D plan sponsors to CMS as part of prescription drug event (PDE) data. The guidance also covers such issues as enrollee dispute resolution, program monitoring/oversight, and discounts for beneficiaries with supplemental drug coverage. CMS will accept comments on the draft program instructions until May 14, 2010, and the agency will issue final program instructions after considering all public comments.