1. Coordination of Benefits and TrOOP Tracey McCutcheon Center for Beneficiary Choices CMS

2. 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 1860D- 24(a) of the Social Security Act.

3. COB Requirements  Plans must permit the following entities to coordinate benefits: State Pharmaceutical Assistance Programs (SPAPs) State Pharmaceutical Assistance Programs (SPAPs) Medicaid programs (including 1115 waiver programs) Medicaid programs (including 1115 waiver programs) Group health plans Group health plans FEHBP plans FEHBP plans TRICARE and VA TRICARE and VA IHS IHS Rural Health Centers Rural Health Centers Federally Qualified Health Centers Federally Qualified Health Centers Other entities as CMS determines Other entities as CMS determines

4. 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

5. 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

6. 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

7. 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 $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

8. 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 for covered Part D drugs (or drugs treated as covered Part D drugs through a coverage determination or appeal) They are made by: They are made by: The beneficiaryThe beneficiary Another “person” on behalf of a beneficiaryAnother “person” on behalf of a beneficiary CMS as part of the low-income subsidiesCMS as part of the low-income subsidies A State Pharmaceutical Assistance Program (SPAP)A State Pharmaceutical Assistance Program (SPAP)

9. TrOOP/Incurred Costs (§423.100)  Payments DO NOT count toward TrOOP if they are made by: A group health plan A group health plan Insurance or otherwise Insurance or otherwise Another third-party payment arrangement Another third-party payment arrangement  Examples of entities whose wraparound coverage does not count toward TrOOP: MA plans MA plans PACE organization PACE organization SCHIP program SCHIP program Medicaid, including 1115 waiver programs Medicaid, including 1115 waiver programs VA or TRICARE VA or TRICARE Indian Health Service Indian Health Service AIDS Drug Assistance Programs (ADAPs) AIDS Drug Assistance Programs (ADAPs) Federally Qualified Health Centers (FQHCs) Federally Qualified Health Centers (FQHCs)

10. 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

11. 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.

12. TrOOP Facilitator  CMS issued RFP on March 3, 2005  Tasks involved in the RFP include: Receiving and maintaining Part D eligibility data Receiving and maintaining Part D eligibility data Providing responses to Pharmacy eligibility queries Providing responses to Pharmacy eligibility queries Receiving and routing secondary paid claims data to the Part D plan 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 Receiving batch claims data from secondary payers and routing them to the Part D plan Providing CMS with copies of these secondary claims transactions Providing CMS with copies of these secondary claims transactions Maintaining a Help desk Maintaining a Help desk