CMS Medicare Part D Creditable Coverage Notice Requirement

Friday, June 3, 2011

Effective with current plan years, Medicare Part D Creditable Coverage Notices which informs eligible members of plans which provide prescription drug coverage that those plan do or do not provide creditable coverage, must provided those members that notice no later than October 15th annually. Previously, Medicare Part D Creditable Coverage Notices were required by no later than November 15th annually. The Medicare Part D Creditable Coverage Notice requirement was a function of the Medicare Modernization Act of 2003 and is required of organizations and "entities" who provide prescription drug coverage to Medicare Part D eligible individuals.

The CMS has provided model Medicare Part D Creditable and Non- Creditable Coverage Notices in both English and Spanish. The change in the date is associated with the passage of the Patient Protection and Affordable Care Act (PPACA) which changed the Medicare enrollment period beginning in 2011. The new Medicare enrollment date is October 15 through December 7, annually. Thus the Medicare Part D Creditable Coverage Notices must be in the hands of Medicare Part D eligible members by October 15 to allow them time to make their enrollment choices.

CMS also provides access to the archives of 28 prior Creditable Coverage Guidance and Notices for those organizations or entities who are required to retroactively provide such notices. CMS also provides access to various instructions and related forms for use in determining creditable coverage and reporting coverage disclosure requirements to the CMS.

The Medicare Modernization Act (MMA) requires entities (whose policies include prescription drug coverage) to notify Medicare eligible policyholders whether their prescription drug coverage is creditable coverage, which means that the coverage is expected to pay on average as much as the standard Medicare prescription drug coverage. For these entities, there are two disclosure requirements:

A written disclosure notice is required for all Medicare eligible individuals on an annual basis who are enrolled under an organization’s prescription drug plan. (Prior to October 15th) Notices are also required at the time a Medicare eligible individual joins a covered plan.

A disclosure is provided to:

• Medicare eligible active working individuals and their dependents

• Medicare eligible COBRA individuals and their dependents

• Medicare eligible disabled individuals and their dependent

• Medicare eligible retirees and their dependents

The Medicare Modernization Act requires late enrollment penalties for those persons who fail to maintain creditable coverage for a period of at least 63 days following their initial enrollment in the Medicare prescription drug program. Thus, Medicare Part D Creditable Coverage Notices are essential to the individuals decision as to whether or not to enroll in the Medicare Part D prescription drug program.

Organizations sponsoring prescription drug programs, creditable or not are required to complete the Online Disclosure form disclosing to the CMS whether or not their program meets the creditable coverage guidelines under the Medicare Modernization Act.

The Disclosure must be completed:

• No later than 60 days from the beginning of each plan year

• Within 30 days after termination of a prescription drug plan

• Within 30 days after any change in creditable coverage status