Historically, Medicare Advantage (MA) plans that offer Part D coverage and Prescription Drug Plans (PDP) haven’t incorporated Other Health Insurance (OHI) information from the Centers of Medicare & Medicaid Services (CMS) Coordination of Benefits (COB) pharmacy file into their Part D processes. The good news is that when MA plans use OHI information in the right way, they can generate significant cost savings.
What’s Changed in the World of OHI and Prescription Drug Coverage?
Recent changes in Section 111 reporting and CMS compliance audits have raised the compliance bar for MA/PDP plans. Employers and insurers that provide Employee Group Health Insurance Plans are now required to report all plan members to CMS. CMS then uses this information to identify Medicare beneficiaries with OHI primary to Medicare.
What’s new is that before 2019, employers and insurers weren’t required to include pharmacy coverage as part of their Section 111 reporting. The SUPPORT for Patients and Communities Act of 2018 changed that. Now employers and insurers must report if members have primary prescription drug coverage. Among its clients, HMS has seen the volume of pharmacy OHI increase by over 100%. CMS captures pharmacy OHI information and sends it to MA/PDP plans in COB pharmacy files.
MA/PDP Plans Face Increased Scrutiny Related to OHI
CMS has been focusing more on auditing MA/PDP plans, with an eye toward COB activity related to OHI. Plans that fail to use OHI data for cost avoidance and recovery of improper Part D payments face adverse audit findings and they must submit remedial plans. MA/PDP plans have received fines of over $1 million for OHI-related compliance violations.
Staying in compliance, unfortunately, is easier said than done. The OHI information in CMS COB pharmacy files is often inaccurate or incomplete, making it nearly impossible for MA/PDP plans to use effectively in cost avoidance and recovery. This poses a dilemma. If MA/PDP use CMS OHI data “as is,” members will be unable to obtain their medications, resulting in low member satisfaction. If they don’t use the CMS OHI data, the plans subject themselves to compliance risk.
Data Cleansing in Combination with Pre-pay and Post-pay COB Can Help
Many MA/PDP plans have invested time in verifying and “scrubbing” the CMS OHI data. Some have also proactively sought out additional OHI data. The return on investment for these activities has been significant – these plans have found that their cost savings from OHI is as much as $5 per plan member per year. In addition to the economic benefit, this work ensures that the plans are compliant with CMS COB requirements.
When it comes to OHI data cleansing and enrichment, MA/PDP plans fortunately don’t have to go it alone. HMS offers prospective COB (also known as pre-pay cost avoidance) and post-pay COB recovery services. We’ve helped MA/PDP plans save millions of dollars annually through Part D COB. To learn more, feel free to contact us.