Tracking the TrOOPs

March 6, 2006

Nearly all persons enrolled in Medicare Part D prescription drug plans (PDPs), except those with the most generous subsidies or those in high-end plans, are subject to co-pays and deductibles. CMS has provided for a central reporting mechanism for recording these out-of-pocket expenditures. The amount a beneficiary must spend on Part D drugs to reach the catastrophic coverage provision is being called "true out-of-pocket," or TrOOP, expenditure. In 2006, persons covered by a PDP are eligible for catastrophic coverage after they have paid $3,600 in TrOOP cost. The threshold can change annually as provided by the Medicare Modernization Act (MMA).

TrOOP expenditures will be calculated on a calendar year basis. The expenses that can be counted toward meeting the beneficiary's cost-sharing requirements are those costs actually paid by the insured and those paid on behalf of the beneficiary by another person or qualified state pharmaceutical assistance plan. Expenses are not considered TrOOP costs if the insured is reimbursed by a third party, such as a supplemental insurance plan from a former employer or union.

CMS contracted with NDCHealth Corp. as a single, real-time point of contact for all Part D claims and enrollment data. The system is designed to: verify eligibility when the patient does not have a Part D card or information, retrieve data for billing a claim to a specific plan, and determine billing order in case of multiple coverage. It provides the dispensing pharmacist with the cardholder ID number, group number BIN, PCN, etc. NDCHealth merged and became Per-Sé Technologies in January.

It is the responsibility of the PDP to monitor TrOOP. Plan holders and pharmacists are to direct their queries to the PDP. Discrepancies in the tracking are possible if an Rx order is not claimed, if there is a correction to the prescription charge, and so on. Under these circumstances, the basis for payment at the point of dispensing will be the information that is current with the PDP. The beneficiary must either pay or decline the purchase pending resolution of a dispute with his or her PDP.

It is the responsibility of the pharmacy to monitor coordination of benefits; that is, to verify who to bill and in what order to bill multiple benefit plans. Non-Part D plans with beneficiaries enrolled in Part D must establish unique BIN/PCN combinations so that switches can identify the claims submitted on behalf of these beneficiaries and supply that information to the TrOOP system. The TrOOP system made provisions for handling real-time and batch claims processing flow for Part D transactions and transactions related to supplemental benefits.

Although a record system will be tracking for individuals, pharmacists might anticipate questions about the difference between those payments that qualify as TrOOP and those that do not qualify.

What counts toward TrOOP? Beyond costs paid directly by the beneficiary, other sums that count toward the TrOOP limit include payments from:

What does not count toward TrOOP? Payments:

THE AUTHOR is associate professor, Department of Pharmacy Health Care Administration, University of Florida College of Pharmacy.