What are Cost Adjustments?

Cost Adjustments are any discounts, chargebacks, rebates, and/or other price concessions given by the manufacturer or pharmacy to the Plan Sponsor that are attributable to Gross Retiree Costs between the Cost Threshold and Cost Limit. The Cost Adjustment needs to be reported to CMS' RDS Center, as those amounts must be accounted for, to determine the Allowable Retiree Cost. For interim cost reporting, the Estimated Cost Adjustment is reported. At Reconciliation, the Actual Cost Adjustment must be reported. For more information on reporting Estimated versus Actual Cost Adjustments, refer to Reporting Cost Adjustments. Estimated Cost Adjustments are only used in interim cost reporting.