Prescription Drug Coverage

10.4 - Prescription Drug Coverage (Rev. 77, Issued: 10-28-05, Effective Date: 10-28-05) (70 FR 4243, Jan 28, 2005) A Medicare cost plan offering a cost plan may, but is not required to, offer prescription drug coverage. There are three methods of offering prescription drug coverage in a cost plan: 1) No Offering of a Part D Plan The Medicare cost plan may elect not to offer qualified Part D coverage. In such a case the Medicare cost plan may offer non-qualified prescription drug coverage as an optional supplemental benefit. This non-qualified prescription drug coverage may be, but is not required to be, creditable, as defined in 42 CFR 423.56. Enrollees of a cost plan not offering qualified Part D coverage may elect to concurrently enroll in a Prescription Drug Plan (PDP). 2) Offering of Basic, Part D Coverage An organization may elect to offer a Medicare cost plan that provides basic part D coverage. If the organization so elects, then this Part D coverage must be offered as an optional supplemental benefit; that is, an enrollee has the option, but not the obligation, to purchase Part D coverage under the plan. All enrollees who purchase the Part D coverage offered by the Medicare cost plan must receive coverage of Part A and Part B, [or Part B only (for beneficiaries who are not entitled to Part A)] benefits under that cost plan. If the enrollee elects not to elect the Part D coverage offered by the Medicare cost plan, then such an enrollee may concurrently enroll in a Prescription Drug Plan (PDP). A Medicare cost plan offering qualified Part D coverage, may not offer non- qualified prescription drug coverage. (See 42 CFR 423.104(f)(4).) 3) Offering of Both Basic and Enhanced Alternative Part D Coverage The Medicare cost plan may elect to offer both basic and enhanced alternative Part D coverage as optional supplemental benefits. An enrollee may then elect to either: (a) Purchase the basic Part D coverage; (b) Purchase the enhanced alternative Part D coverage; or (c) To purchase neither. If the enrollee elects not to elect part D coverage through the cost plan, the enrollee retains his/her right to concurrently enroll in another Prescription Drug Plan (PDP). A Medicare cost plan offering qualified Part D coverage, may not offer non-qualified prescription drug coverage. (See 42 CFR 423.104(f)(4).) If a Medicare cost plan offers qualified Part D coverage then the funding for the Part D coverage is separate from the CMS funding for Part A and/or B coverage (42 CFR 417.534(c)). Consequently, a Medicare cost plan may not apply reductions or non-collection of deductibles and coinsurance for Part A and/or B services to subsidize Part D coverage. See §60 of this chapter for information on benefits in a Medicare cost employer group health plan.