Network Variable Rate Calculations

CONFIDENTIAL:

CVS/Caremark

Network Variable Rate Calculations

As indicated in TriNet’s 2016 DIR Network Fees, Preferred Cost Sharing and Standard Cost Sharing Medicare Part D Networks*, the CVS/Caremark 2016 Performance Network Program is based on pharmacy performance and “Network Variable Rates”. The Network Variable Rate (NVR) is calculated retrospectively and functions similar to a DIR Fee.

The CVS/Caremark NVR is what other PBMs indicate as DIR Fees. NVRs are calculated retrospectively, after claims are processed and the pharmacy performance measurement occurs. Pharmacy performance and NVRs will be accurately calculated after each trimester.

Because your pharmacy is no longer paying individual claim DIR Fees to CVS/Caremark on Medicare Part D claims within the same payment/remittance cycle, your pharmacy needs to plan for the NVR collection for each CVS/Caremark NVR collection period and consider holding back an NVR collection estimate as a reserve against CVS/Caremark NVR collections .

TriNet strongly encourages pharmacies to accrue 5% of each payment/remittance from CVS/Caremark Medicare Part D claim totals for the 2016 Medicare Part D plan year. TriNet NVRsvaryper individual network from the 3.5% range to 5.5% range. TriNet considers this estimated 5% figure as an appropriatereserve againstCVS/Caremark NVR collections.

Also, asshown in TriNet’s 2016 DIR Network Fees, Preferred Cost Sharing and Standard Cost Sharing Medicare Part D Networks, CVS/Caremark’s initial NVR collection will not be deducted from CVS/Caremark Medicare Part D payments until July of 2016.

*If you did not receive the 2016 DIR Network Fees, Preferred Cost Sharing and Standard Cost Sharing Medicare Part D Networkspacket via email, please contact TriNet at and we will forward you a copy. This is an 18 page document. Fax is not recommended.

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