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

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coordination of benefits and troop

Coordination of Benefits and TrOOP

Tracey McCutcheon

Center for Beneficiary Choices


coordination of benefits cob
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.
cob requirements
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
potential coordination issues for part d plans
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
user fees
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
  • 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
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
troop incurred costs 423 1001
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)
troop incurred costs 423 1002
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)
troop incurred costs 423 1003
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
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 facilitator1
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