Transcript 0504MMAMcCutcheon (Coordination of Benefits and TrOOP)

Coordination of Benefits and
TrOOP
Tracey McCutcheon
Center for Beneficiary Choices
CMS
Coordination of Benefits
COB
 The
Medicare Modernization Act requires
plans to coordinate with entities providing
other prescription drug coverage, as
stated in section 1860D-23(a) and 1860D24(a) of the Social Security Act.
COB Requirements
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Plans must permit the following entities to
coordinate benefits:
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State Pharmaceutical Assistance Programs (SPAPs)
Medicaid programs (including 1115 waiver programs)
Group health plans
FEHBP plans
TRICARE and VA
IHS
Rural Health Centers
Federally Qualified Health Centers
Other entities as CMS determines
Potential Coordination Issues for
Part D Plans
Plans will need to determine how it will:
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Receive and transmit claims in NCPDP v5.1 format
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Receive secondary payer data from the TrOOP contractor and the
enrollee
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Determine TrOOP balances and communicate this information to the
beneficiary
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Accommodate consolidated premium payments from third party
payers
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Correct claims paid by the wrong payer
User Fees
CMS may impose user fees on Part D plans for
transmittal of information necessary for COB
 CMS may retain a portion of user fees to
defray COB costs
 CMS will not impose user fees on SPAPs/
entities offering other prescription drug
coverage
 Part D sponsors cannot impose fees on
SPAPs/entities offering other prescription drug
coverage that are unrelated to the cost of COB
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TrOOP
 The
Medicare Prescription Drug
Improvement and Modernization Act of
2003, as stated in 1860D-2, requires the
tracking of True-Out-Of-Pocket (TrOOP)
expenditures for Medicare beneficiaries
enrolled in Part D in order to meet the
eligibility for catastrophic coverage
TrOOP/Incurred Costs (§423.100)
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TrOOP (true out-of-pocket costs)/”incurred
costs” is the amount a beneficiary must spend
on covered Part D drugs to reach catastrophic
coverage. It is based on the standard benefit
design:
$250 deductible
+ $500 beneficiary coinsurance during initial coverage
+ $2,850 coverage gap
= $3,600
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The above numbers are for 2006 and will
increase by law in subsequent years
 Part D premium is not part of TrOOP
TrOOP/Incurred Costs (§423.100)
 Payments
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count toward TrOOP if:
They are made for covered Part D drugs (or
drugs treated as covered Part D drugs
through a coverage determination or appeal)
They are made by:
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The beneficiary
Another “person” on behalf of a beneficiary
CMS as part of the low-income subsidies
A State Pharmaceutical Assistance Program
(SPAP)
TrOOP/Incurred Costs (§423.100)
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Payments DO NOT count toward TrOOP if they are made by:
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A group health plan
Insurance or otherwise
Another third-party payment arrangement
Examples of entities whose wraparound coverage does not count
toward TrOOP:
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MA plans
PACE organization
SCHIP program
Medicaid, including 1115 waiver programs
VA or TRICARE
Indian Health Service
AIDS Drug Assistance Programs (ADAPs)
Federally Qualified Health Centers (FQHCs)
TrOOP/Incurred Costs (§423.100)
 Part
D plans are required to ask
beneficiaries what third-party coverage
they have (if any) because this information
is necessary for proper TrOOP calculation
 Material misrepresentation of the
supplemental coverage that a beneficiary
has may constitute grounds for termination
of coverage from Part D
TrOOP Facilitator
 The
TrOOP Facilitator shall be responsible
for establishing procedures for facilitating
eligibility queries at the point-of-sale,
identifying costs for Part D enrollees that
are being reimbursed by other payers, and
for alerting Part D plans about these
transactions.
TrOOP Facilitator
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CMS issued RFP on March 3, 2005
 Tasks involved in the RFP include:
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Receiving and maintaining Part D eligibility data
Providing responses to Pharmacy eligibility queries
Receiving and routing secondary paid claims data to
the Part D plan
Receiving batch claims data from secondary payers
and routing them to the Part D plan
Providing CMS with copies of these secondary claims
transactions
Maintaining a Help desk