RDS Amounts And Medicare Part D Benefit Parameters For 2016 Are Issued By CMS

The Centers for Medicare & Medicaid Services (CMS) has issued the Cost Threshold and Cost Limit amounts for Retiree Drug Subsidy (RDS) plan years ending in 2016, for plan sponsors participating in the RDS program. The Cost Threshold amount is $360 and the Cost Limit amount is $7,400.

The RDS is designed to encourage employers and unions to continue providing high quality prescription drug coverage to Medicare-eligible retirees. The subsidy pays 28 percent of retirees’ drug costs between the Cost Threshold and the Cost Limit.

The CMS advises that plans sponsors of RDS plans ending in 2016 that were using the 2015 figures should adjust their interim cost data in their next cost submission to reflect the new amounts. Furthermore, CMS reminds practitioners that final cost reports must reflect the applicable Cost Threshold and Cost Limit amounts corresponding to the application plan year and date.

The CMS further advises that the valuation of defined standard prescription drug coverage for a given plan year is based on the initial coverage limit, cost-sharing, and out-of-pocket threshold for defined standard prescription drug coverage under Medicare Part D at the start of such plan year or that is announced for the upcoming calendar year. Therefore, any actuarial attestation submitted to the CMS RDS Center within 60 days after the publication of the adjusted amounts can be based on either the adjusted amounts or on the previous year’s amounts, but attestations submitted more than 60 days after publication must apply the adjusted amounts.

Medicare Part D Parameters. The CMS has also announced that the Medicare Part D Benefit Parameters for 2016 have been adjusted. For 2016, under the standard benefit, the deductible is $360, the initial coverage limit is $3,310, and the out-of-pocket threshold is $4,850. Co-pays will be $2.95 for generics and preferred multi-source drugs and $7.40 for all other drugs.

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