Coordination of Benefits and TrOOP

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Coordination of Benefits and TrOOP

• Tracey McCutcheon
• Center for Beneficiary Choices
• CMS

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Coordination of BenefitsCOB

• The Medicare Modernization Act requires plans to
  coordinate with entities providing other
  prescription drug coverage, as stated in section
  1860D-23(a) and 1860D-24(a) of the Social
  Security Act.

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COB Requirements

• Plans must permit the following entities to
  coordinate benefits
• 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

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Potential Coordination Issues for Part D Plans

• Plans will need to determine how it will
• Receive and transmit claims in NCPDP v5.1 format
• Receive secondary payer data from the TrOOP
  contractor and the enrollee
• Determine TrOOP balances and communicate this
  information to the beneficiary
• Accommodate consolidated premium payments from
  third party payers
• Correct claims paid by the wrong payer

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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

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TrOOP/Incurred Costs (423.100)

• 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
• The above numbers are for 2006 and will increase
  by law in subsequent years
• Part D premium is not part of TrOOP

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TrOOP/Incurred Costs (423.100)

• Payments 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
• The beneficiary
• Another person on behalf of a beneficiary
• CMS as part of the low-income subsidies
• A State Pharmaceutical Assistance Program (SPAP)

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TrOOP/Incurred Costs (423.100)

• Payments DO NOT count toward TrOOP if they are
  made by
• A group health plan
• Insurance or otherwise
• Another third-party payment arrangement
• Examples of entities whose wraparound coverage
  does not count toward TrOOP
• 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)

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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

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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.

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TrOOP Facilitator

• CMS issued RFP on March 3, 2005
• Tasks involved in the RFP include
• 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