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2007 Draft Coordination of Benefits (COB) Guidelines 

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The Centers for Medicare and Medicaid Services (CMS) has released their 2007 Draft Coordination of Benefits (COB) Guidelines for review and comment. The draft   2007 COB Guidance incorporates a number of changes to clarify existing policy, describe updated systems and processes related to COB, and
explain new and proposed policy and requirements. Comments may be submitted on this draft until COB July 14, 2006 at drugbenefitimpl@cms.hhs.gov . This document provides guidance to Part D sponsors regarding our requirements and procedures for coordination of benefits (COB) between Part D plans and State Pharmaceutical Assistance Programs (SPAPs) 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 guidance raises the true out-of-pocket (TrOOP) expenditure trigger for initiating catastrophic coverage from $3,600 to $3,850 in 2007. Beneficiaries will be responsible for submitting documentation on purchases that are made off-line (i.e. when on-line claims processing is not available at the pharmacy). This would include out-of-network claims, claims resulting from the use of drug discount cards other than that of the beneficiary's Part D plan. 

Additional changes relating to state programs include:

1. Plans must accept payment of premiums from other payers. The changes prohibit a Part D plan from disenrolling an individual if payment is paid by an SPAP or other payer and the plan has not yet coordinated premium payment with the SPAP or other payer. Plans are required to work with other payers in accordance with Federal Regulation 42 CFR 423.464(a)(1). Plans must bill the SPAP or other payers directly for the beneficiary's premium and not bill the beneficiary in accordance with COB requirements. All plans receive information from CMS regarding a beneficiaries coverage in an SPAP program.
2. Reiterating requirements that all plans adopt a non-risk-based lump sum approach with SPAPs. Further, if they do not, they will be out of compliance and states will not be considered discriminating if the state has to inform their beneficiaries that a plan is not participating.
3. Adding language concerning a SPAP use of a single processor process.
4. Proposes to implement a special transition period with important COB implications that would require Part D plans to provide limited reimbursement for covered Part D drugs for a time immediately preceding the minimum 30 or 90 day transition period. This requirement would be applied to those situations involving claims incurred by, or on behalf of, a beneficiary who has subsequently been retroactively enrolled in a Part D plan by CMS. These situations almost exclusively involve beneficiaries who are full-benefit dual eligibles.
5. Permits Part D plans and states to negotiate the details regarding the development of a Standard File Format for Patient Drug History and Standard Data Sharing Agreement. NCPDP, which is the national standards organization for pharmacy claims, is currently finalizing the "Post Adjudication Standard" for approval. In order to access the NCPDP documentation and use the Post Adjudication Utilization Record, the states and or their contractors must be members of NCPDP. Exchange of data in these arrangements must comply with the requirements of HIPAA.
6. A CMS requirement of Part D plans to implement a 180-day timely claims filing limit for claims incurred January 1 through June 30, 2006. This will afford pharmacies when not at fault for the original billing error adequate opportunity to reverse and rebill claims. This claims filing window will accommodate the identification and resolution of COB issues. CMS is proposing to continue this 180-day limit for plans until the NCPDP standard is able to automatically distinguish between pharmacy billing errors and payer and/or payer order errors.
7. Exchanging Historical and Ongoing Claims Data--CMS cannot require data exchanges between Part D plans and the states, however it is strongly encouraged for these shared enrollees with SPAPs, provided the disclosure is consistent with the requirements of the HIPAA Privacy Rule.
8. Coordinating Payment--Provides SPAPs the opportunity to coordinate their benefits with Part D plans in a variety of ways. CMS will take compliance action against all plans that do not comply with the non-risk requirement. These actions will not result in disqualification of a state program from its qualified SPAP status. States will be required to collect an attestation from the plan that does not want to participate in the non-risk approach and submit them to CMS. Plans will also be required to inform beneficiaries that it is not participating in the state's program. SPAPs may provide their own wrap-around benefit at the point-of-sale, or solicit a plan or processor to administer the benefit for them. 
9. A requirement that Part D plans implement a reject message for pharmacies to identify claims for excluded Part D drugs that can be billed to the state by August 2006.
10. Recommendations that Part D plans set up manual processes with safety-net pharmacies in their network in order to accurately maintain beneficiary TrOOP balances. Currently, there does not exist any capability under NCPDP 5.1 transaction set for safety-net pharmacies to indicate a pharmacy's waiver or reduction of any applicable beneficiary cost-sharing so that such subsidies are not applied to the beneficiary's TrOOP balance.
11. A provision that drug payments made by a Patient Assistance Program (PAP) on behalf of a Part D enrollee will count toward a beneficiary's TrOOP balance. PAPs are also allowed the option of providing assistance for covered Part D drugs outside the Part D benefit, which would not be applied toward the TrOOP. CMS also provides clarification concerning the payment of premiums by PAPs on behalf of Part D enrollees. Nothing in CMS rules and regulations prohibit these arrangement.