January 19, 2006

Requirements for Providing Medicare D Prescription Drug Notice to CMS Announced

In late 2005, entities intending to provide prescription drug coverage to Medicare-eligible individuals in 2006 were required to notify those individuals whether the coverage would be "creditable coverage" or "noncreditable coverage." Generally, creditable coverage is prescription drug coverage that is at least as valuable as standard Medicare drug coverage. Noncreditable coverage is less valuable than standard Medicare drug coverage.

Most of these same entities are also required to notify the Centers for Medicare & Medicaid Services (CMS) of the type of prescription drug coverage (creditable or noncreditable) they are providing to Medicare-eligible individuals in 2006. CMS has recently published information on the form and timing of the notice to be given. Here are the highlights.

  • An entity must give notice to CMS electronically, by completing a form online on CMS's website. This is the sole method for compliance with the CMS notice requirement. The form requires the entity to report the approximate number of Medicare-eligible individuals expected to be provided coverage, the date the entity provided the creditable or noncreditable coverage notices to Medicare-eligible individuals and the name and address of the individual employed by the entity to complete the online form.
  • If an entity's "plan year" ends in 2006, notice must be given by March 31, 2006. If an entity's plan year ends after 2006, notice must be given within 60 days after the first day of the plan year. An entity's plan year begins on the first day of the entity's annual renewal or contract period and ends on the last day of the entity's renewal or contract period. Notice must be given each plan year.
  • An entity must give notice to CMS of any change in creditable coverage status within 30 days after the change takes effect.

More information on the CMS notice requirement can be obtained from CMS's website.

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