True Out of Pocket Costs (TrOOP)

The Centers for Medicare & Medicaid Services (CMS) intends to issue a solicitation to procure an automated process to manage the plan-to-plan transfer of the Section 1860D-2 of the MMA requirement to track beneficiaries' "true out-of-pocket" (TrOOP) expenditures. The "TrOOP facilitation process" established by CMS to capture TrOOP-relevant data from Rx plans online and send this data to the relevant Part D Plan for TrOOP calculation offers the means by which the plan-to-plan TrOOP-related data transfer can be accomplished electronically.

This pre-solicitation notice is hereby posted in accordance with FAR 5.2. CMS reserves the right and anticipates making a single contract award.

The solicitation will be issued in accordance with FAR Part 15. CMS plans to issue the solicitation as a full and open competition.

BACKGROUND:
Section 1860D-2 of the MMA requires the tracking of beneficiaries' "true out-of-pocket" (TrOOP) expenditures. This section specifies the incurred costs that count toward TrOOP. Costs are treated as "incurred" only if they were paid by the individual (or by another person, such as a family member, on behalf of the individual), paid on behalf of a low-income subsidy-eligible individual under the § 1860D-14 provisions, or paid under a State Pharmaceutical Assistance Program (SPAP) as defined in § 1860D-23. Costs do not count as "incurred" when: 1) no benefits are provided because of the application of either a formulary or the Medicare Secondary Payer rules, or 2) when costs are reimbursed "through insurance or otherwise, a group health plan, or other third party arrangement." Therefore, only certain costs not paid for by the Part D Plan count toward TrOOP. Section 1860D-2(a)(4)(D)(i) authorizes the CMS to establish procedures for a) determining whether costs for Part D enrollees are being reimbursed by excluded payers and b) alerting Part D Plans about the existence of such payers.
To calculate TrOOP, Medicare Part D Plans have to determine what other entities made payments on covered drugs. Section 1860D-23 requires the CMS to coordinate with SPAPs, and § 1860D-24 requires that the CMS apply the same coordination requirements to "Rx plans" (as defined in that section). The CMS is establishing a "TrOOP facilitation process" that captures TrOOP-relevant data from SPAPs and Rx plans either online or in a batch process and sends it to the relevant Part D Plan for TrOOP calculation. Because of the § 1860D-23 requirement, this process shall be performed for SPAP transactions even though the Part D Plan does not need to subtract SPAP payments from TrOOP.

Part D rules require plans to track the beneficiary's true out-of-pocket (TrOOP) costs and gross covered drug spending and correctly apply these costs to the TrOOP and benefit limits in order to correctly place the beneficiary in the benefit and provide the catastrophic level of coverage at the appropriate time. The TrOOP threshold and gross covered drug spending are calculated on an annual basis and must be transferred between Part D plans if a beneficiary dis-enroll and re-enrolls at any time before the end of the coverage year. The TrOOP-related data must also be transferred between Part D plans in those circumstances in which a Part D plan other than the plan of record paid for covered Part D drug costs as a primary payer and subsequently becomes aware; for example, through a CMS enrollment reconciliation process, that the beneficiary is enrolled in another Part D plan.
The anticipated award date of the contract is expected to be in early February, 2011.

THIS IS NOT A REQUEST FOR PROPOSAL. The Government will not evaluate responses or accept phone calls in response to this notice.