CMS Clarifies TrOOP Costs and Supplemental Insurance Codes for 2025
Relevant to: PDP, PDF, TrOOP, COB, Part D
Each week, we scan the latest CMS memos to find the most important ones that apply for PACE programs. Below is a summary of what you need to know.
Disclaimer: The content provided on this site is a summary for informational purposes only, and Grane PBM, Inc. assumes no liability for any errors or omissions in the site’s content. The information does not constitute legal or regulatory advice or replace the original CMS memo. Readers are advised to consult the CMS memo in its entirety and to verify information independently before making any decisions based on this information.
Click here to read the complete memo from CMS.
Introduction
CMS has released an updated memorandum clarifying the True Out-of-Pocket (TrOOP) costs for the 2025 calendar year, initially issued on June 17, 2024. Key updates include corrections to typographical errors and additional guidelines on the handling of TrOOP-eligible and non-TrOOP-eligible Other Health Insurance (OHI) concerning prescription drug events. The memo aligns the existing guidelines with the Final CY 2025 Part D Redesign Program Instructions, ensuring consistency with recently amended legislation.
Key Dates and Deadlines
- Initial release of memorandum: June 17, 2024
- Update release of memorandum: August 5, 2024
- Conversion of supplemental insurance records with type code O: October 2024
PACE Compliance
This memo is relevant to PACE (Programs of All-Inclusive Care for the Elderly) compliance due to its discussions around True Out-of-Pocket (TrOOP) costs for Part D plans and the requirements for third-party arrangements. Although PACE plans operate under different guidelines compared to standard Part D plans, any changes and clarifications in TrOOP calculations can potentially impact how PACE organizations account for drug costs.
The update highlights the importance of aligning the information in existing manuals and instructions, which could affect the PACE administrative systems since these might rely on consistent guidance across Medicare programs.
Any potential PACE compliance issues would stem from the need to understand:
- Which types of supplemental insurance are considered TrOOP-eligible, as this affects PACE participants’ cost-sharing responsibilities.
- How expenses and payments are categorized and reported in claims and data files, impacting financial reporting and reconciliation processes.
- The implications of the Inflation Reduction Act concerning included costs, which pertains to any PACE organizations coordinating benefits or involved with third-party payments.
While PACE organizations are generally less impacted by TrOOP calculations compared to standalone Part D plans, they must still maintain accurate reporting and ensure understanding of how broader medicaid and medicare changes intersect with their operations, particularly concerning drug benefits and related financial considerations. PACE organizations should consult these updates to maintain compliance with the latest Medicare policies.
Required Actions
Review the updated clarification regarding True Out-of-Pocket (TrOOP) costs for Calendar Year 2025 as detailed in the latest memorandum.
1. Identify and correct any references to supplemental insurance type code T related to legitimate charities to the correct code, which is now code R.
2. Examine and understand the additional information provided concerning the treatment of TrOOP-eligible and non-TrOOP-eligible Other Health Insurance for prescription drug event purposes.
3. Submit any questions about the memo’s contents to PartD_COB@cms.hhs.gov, especially concerning the assignment of supplemental insurance type codes on the COB-OHI file.
FAQs
- “What changes were made to the TrOOP-eligible costs in the updated memorandum?”
- “Which third-party arrangements are considered TrOOP-eligible for CY 2025?”
- “How are Federal Government Programs treated in terms of TrOOP eligibility for CY 2025?”
- “What is the role of OHI in determining TrOOP-eligible costs?”
- “Where can questions regarding supplemental insurance type codes be directed?”
