That's right, Medicare Part D Open Enrollment Period (OEP) can have a significant impact on your ability to receive subsidy for a covered retiree. If a Plan Sponsor is already participating in the Retiree Drug Subsidy (RDS) Program or is considering submitting an RDS Application for the first time, it is crucial to understand the impact of OEP. Plan Sponsors should have a plan for educating retirees about creditable coverage prior to the start of OEP as well as a plan for establishing, monitoring, and managing Qualifying Covered Retirees (QCRs) during OEP and throughout the plan year.
Educating Retirees about Creditable Coverage
Medicare Part D Open Enrollment Period can be a confusing time of year for retirees. CMS' RDS Center encourages Plan Sponsors to educate retirees about their current coverage. Plan Sponsors are required to provide retirees with a Notice of Creditable Coverage addressing topics that include the terms of their coverage with the Plan Sponsor, what it means to be enrolled in the RDS Program, what it means should the retiree enroll in Medicare Part D, and much more.
Establishing Qualifying Covered Retirees
This topic is especially important for Plan Sponsors with an Application Plan Year that starts in January through March since the Application Deadline occurs during OEP. Before Plan Sponsors can monitor or manage their covered retirees, they must first submit a Valid Initial Online Application and a Valid Initial Retiree List. CMS' RDS Center suggests that Plan Sponsors submit these items as soon as possible - ideally before the beginning of Open Enrollment.
Submitting the Valid Initial Retiree List early means a Plan Sponsors' retirees are marked in the Medicare Beneficiary Database (MBD) as being participants in the RDS Program. As a result, the QCR will be initially rejected should they attempt to enroll in Medicare Part D during OEP. If the QCR persists and enrolls in Medicare Part D, the Plan Sponsor will no longer be allowed to receive subsidy for that individual.
Monitoring Qualifying Covered Retirees
Plan Sponsors are responsible for ensuring their Covered Retiree List (CRL) is always current as CMS' RDS Center verifies the Medicare Part D entitlement and enrollment for each retiree listed in the CRL against MBD. Remember, in order to receive subsidy, a retiree must be eligible for but not enrolled in Medicare Part D. When a Valid Initial Retiree List or a Monthly Retiree List is submitted and processed by CMS' RDS Center, the system sends the Plan Sponsor a Retiree Response File. The Retiree Response File contains all of the original fields sent by the Plan Sponsor plus the Determination Indicator, Subsidy Dates, and Reason Codes.
During OEP, it is particularly important that Plan Sponsors monitor Medicare Part D Enrollment Rejection Notifications in the RDS Secure Website (SWS). This is the first indication that a QCR has attempted to enroll in Medicare Part D and affords the Plan Sponsors the earliest opportunity to perform outreach. Plan Sponsors should review and process all CMS' RDS Center communications including the Retiree Response Files and Weekly Notification Files. These will not only help Plan Sponsors maintain internal QCR records, but more importantly, these communications will notify Plan Sponsors when a QCR attempts to enroll in Medicate Part D (Reason Code 20) or when a retiree actually enrolls in Medicare Part D (Reason Code 10).
Managing Qualifying Covered Retirees
When there is an event that may impact a Plan Sponsors ability to receive subsidy for a retiree, CMS' RDS Center is notified by MBD and the system re-evaluates the retiree's eligibility for subsidy. If a QCR enrolls in Medicare Part D, the Plan Sponsor can no longer receive subsidy for that individual. When a Plan Sponsor receives Reason Code 10 or Reason Code 20, they should contact the affected QCR immediately and explain that their existing plan has equivalent if not better drug coverage and the QCR does not need Medicare Part D.
In addition, if a QCRs change in subsidy occurs during the plan year, regardless if it is during OEP, Plan Sponsors must factor in these changes when performing cost calculations. Plan Sponsors always need to review and share their CRL with their Cost Reporters as Federal law requires that cost data may only be submitted for the QCRs, corresponding Subsidy Periods, and the Benefit Options in which each QCR is enrolled.
If you have questions or need additional information, contact CMS' RDS Center.