Next year, your Medicare patients may start asking you regularly to track how
much money they’ve cumulatively spent on prescription medications. This is
because catastrophic coverage begins for your Medicare patients after they have
paid $3,600 in “True Out-of-Pocket” (TrOOP) costs. In many cases, this
will correlate to $5,100 in drug spending.
This is calculated by the following:
| $250 | Deductible |
| $500 | 25% of drug costs in the initial coverage ($250 - $2,250) |
| $2,850 | 100% of drugs costs in the donut hole ($2,250 - $5,100) |
| $3,600 | TrOOP costs |
It is important for Medicare beneficiaries to understand that their monthly premium (~$37/month) is not considered TrOOP and therefore cannot be counted towards catastrophic coverage. Also, $3,600 is only for 2006 and will increase by law in subsequent years.
Beyond beneficiary drug spending, other payments can count towards TrOOP, including:
Secondary payors such as SPAPs will contribute to TrOOP and will need to be monitored by the plan. Additionally, your Medicare patients may look to you to let them know how close they are to catastrophic coverage. For this reason, the Centers for Medicare and Medicaid Services (CMS) awarded a contract to NDC Health to provide a coordination of benefits systems to closely monitor TrOOP on a pharmacy level. As a part of this contract, NDC Health is required to provide routing of claims for benefits paid by entities other than Medicare back to the prescription drug plans to ensure that what seniors pay at pharmacy counters takes into account the proper level of their Medicare coverage. More details on NDC Health’s TrOOP system, including applicable switch fees, will be released this summer.