Appeal type: unknown
Decision: unknown

Under Medicare rules, a Part D sponsor must provide enrollees with standard prescription drug coverage. The benefits may be provided directly by the Part D sponsor or through arrangements with other entities. Standard prescription drug coverage includes access to negotiated prices, provides coverage of Part D drugs, and includes protection against high out-of-pocket expenditures. The annual out-of-pocket threshold equals: A) For 2006, $3,600; B) For each year 2007 through 2013, the amount specified in this paragraph for the previous year, increased by the annual percentage; C) For years 2014 and 2015, the amount specified in this paragraph for the previous year, increased by the annual percentage increase, minus 0.25 percentage point; D) For each year 2016 through 2019, the amount specified in this paragraph for the previous year, increased by the lesser of the annual percentage increase plus two percentage points, or the annual percentage increase; E) For 2020, the amount specified in this paragraph for 2013 increased by the annual percentage increases for 2014 through 2020, and rounded to the nearest $50; or F) For 2021 and subsequent years, the amount specified in this paragraph for the previous year, increased by the annual percentage increase, and rounded to the nearest $50. The annual percentage increase for each year is equal to the annual percentage increase in average per capita aggregate expenditures for Part D drugs in the United States for Part D eligible individuals and is based on data for the 12-month period ending in July of the previous year. [42 Code of Federal Regulations Section 423.104]Part D sponsors are required to coordinate with State Pharmaceutical Assistance Programs and other providers of prescription drug coverage with respect to the payment of premiums and coverage, as well as coverage supplementing the benefits available under Part D. The Medicare Modernization Act specified that these coordination requirements must relate to the following elements: 1) Enrollment file sharing; 2) Claims processing and payment; 3) Claims reconciliation reports; 4) Application of the protection against high out-of- pocket expenditures by tracking true out-of-pocket expenditures; and 5) Other processes that the Centers for Medicare & Medicaid Services determines. While this is the principal purpose of Coordination of Benefits within the contexts of Medicare Parts A and B, Coordination of Benefits also serves an additional function within the Part D context: it provides the mechanism for support of the tracking and calculating of beneficiaries true out-of-pocket expenditures, or incurred costs as defined in the Medicare Modernization Act and the Centers for Medicare & Medicaid Services implementing regulations. Costs for covered Part D drugs are treated as incurred only if they were paid by the individual (or by another person, such as a family member, on behalf of the individual), paid by the Centers for Medicare & Medicaid Services on behalf of a low-income subsidy-eligible individual, or paid under a qualified entity such as State Pharmaceutical Assistance Programs, AIDS Drug Assistance Programs, or a bona fide charity as defined in the Centers for Medicare & Medicaid Services regulations. Costs do not count incurred when: 1) no benefits are provided because of the application of either a formulary or the Medicare Secondary Payer laws, or 2) when costs are reimbursed through insurance or otherwise, a group health plan, or other coverage. Therefore, only certain costs not paid for by the Part D sponsor count toward true out-of-pocket expenditures. [The Centers for Medicare & Medicaid Services Internet-Only Manual, Publication 100-18, Medicare Prescription Drug Benefit Manual, Chapter 14, Section 20]