Coordination of Benefits between Part D Plans and Other Prescription Coverage Providers (CMS-10171)

Attachment 1
True Out-of-Pocket (TrOOP) Cost Accumulation and Coordination of Benefits (COB)
Process in Real-Time
To assist Part D sponsors with correctly calculating the TrOOP cost amount for their members,
CMS contracts with a Part D transaction facilitator (the facilitator) to simplify the transfer of
supplemental payer claim information to Part D sponsors. The primary function of the facilitator
is to identify patient paid amounts remaining after other payers have wrapped around Part D
claims so that Part D sponsors can identify these costs and accumulate TrOOP costs correctly for
their members.
For the TrOOP cost facilitation process to work properly, Part D sponsors (or their processors),
other payers, pharmacy switches (claims routers), and the facilitator must interact to enable
Part D sponsors to accurately track a member’s TrOOP costs in real-time. To ensure SPAP costs
are accurately accounted for in the TrOOP calculation, SPAPs must sign a data sharing
agreement with CMS and submit electronic enrollment files to CMS’ Benefits Coordination and
Recovery Center (BCRC, formerly the COB contractor) with specific information that will be
provided to the facilitator. Each SPAP enrollment file must include a unique RxBIN or
RxBIN/RxProcessor Control Number (PCN) combination for its Medicare Part D enrollees. It is
this unique identifier that flags the secondary claim so that the pharmacy switch can route the
claim to the facilitator. This identifier also gives Part D sponsors the ability to match the
information reporting transaction it receives from the facilitator to the member’s Part D claim for
appropriate calculation of TrOOP.
Using more technical terms, pharmacy claims to payers are transmitted via “B” transactions.
These B transactions are submitted electronically by the pharmacy to their switch. The
pharmacy switch forwards to the facilitator those B transactions that are not rejected by the
secondary payer and that contain a unique RxBIN or RxBIN/RxPCN combination for a plan that
covers Medicare Part D beneficiaries. This RxBIN or RxBIN/RxPCN identifier is the flag that
pharmacy switches use to route the transaction to the facilitator. The facilitator uses the
information contained in the B transaction to create an information reporting transaction (“Nx”
transaction) and delivers the N transaction to the Part D sponsor. All claims submitted to other
payers must be processed through a pharmacy switch so that the pharmacy switch can deliver the
transactions to the facilitator enabling accurate calculation of TrOOP costs by the Part D
sponsor.
If the SPAP does not have electronic claims processing capability, the SPAP may alternatively
submit a batch file of supplemental claims information or make arrangements to submit
information in another format to the facilitator. The supplemental claims data submitted to the
facilitator will be supplied to Part D sponsors for TrOOP cost calculations. If the SPAP uses the
batch process, it must still establish a unique Rx BIN or RxBIN/RxPCN and participate in the
data sharing exchange with CMS’ BCRC.
If the SPAP does not support either the on-line or batch process, no Nx transactions will be
created and Part D sponsors will not be required to coordinate benefits if claims later adjust due
to changes in an SPAP member’s low-income subsidy (LIS) or dual eligible status. That is,

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when Part D sponsors are unable to automatically identify and retroactively adjust those claims
paid by SPAPs, Part D sponsors are not responsible for ensuring that the SPAP is reimbursed for
any overpayments on the adjusted claims. Part D sponsors will likely reimburse the member
directly and it is then the responsibility of the SPAP, if it so chooses, to recover the money
directly from its members.

Steps to Ensure Proper Calculation of TrOOP Costs for Part D SPAP Members
1. Sign a data sharing agreement (DSA) and participate in the COB enrollment file exchange
with CMS’s BCRC. SPAPs are required to sign a DSA and follow the instructions contained in
the DSA user guide when participating in the COB enrollment data file exchange. The
information the SPAP provides via its enrollment file to the BCRC, in particular, the unique
RxBIN or RxBIN/RxPCN, is sent to both the facilitator and Part D sponsors. The DSA and User
Guide provide specific information regarding the submission of the necessary data.
2. Establish a unique RxBIN or RxBIN/RxPCN combination for the SPAP’s Part D members
and submit this information as part of the enrollment file exchange with the BCRC. As
explained above, the unique Rx BIN or RxBIN/RxPCN allows the claim to be routed to the
facilitator to create an Nx transaction which will provide the Part D sponsor with the
supplemental payer information that is necessary to calculate TrOOP costs correctly. In other
words, without the correct Rx BIN or RxBIN/RxPCN, TrOOP costs will not be calculated
correctly because the facilitator will be unable to create an Nx transaction, and, if an Nx
transaction were created, the sponsor would be unable to match it to the enrollee’s Part D claim.
3. Ensure that the SPAP or its processor, when processing secondary claims, accepts and
processes only those claims with 4Rx information that is identical to the 4Rx information
submitted on the SPAP’s input file to the BCRC. (4Rx data include: RxBIN, RxPCN, RxGroup
ID, and RxMember ID. Although RxPCN and RxGroup are optional, these must be included on
claims when they have been included on the SPAP input file.) CMS has found that when SPAPs
accept and process claims using 4Rx information that is different from the data submitted on
their input file to the BCRC, an Nx transaction could not be generated because the facilitator did
not identify the SPAP as a TrOOP-eligible payer. This causes the Part D sponsor to understate
its members’ TrOOP costs.
NOTE: Please email a record of your Medicare Part D specific BIN or BIN-PCN combination to
NCPDP at CMS-SPAP-ADAPplaninfo@ncpdp.org with SPAP ADAP Update in the Subject
line. The NCPDP SPAP/ADAP BIN/PCN Reference Guide is available at www.NCPDP.org and
provides guidance on the spreadsheet. Programs and their processors should use this guidance
for reporting and updating their information. This will ensure that the pharmacy switches will be
notified to forward your paid claims to the transaction facilitator, who in turn will forward the
information to the Part D plan.
For additional resources related to the process of providing your payment information to the
Part D plans, go to www.NCPDP.org.
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