Review of Retiree Drug Subsidy Plan Sponsor Blue Cross Blue Shield of Massachusetts, Inc., for Plan Year Ended December 31, 2006

摘要

Section 101 of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (Public Law 108-173) established a Retiree Drug Subsidy (RDS) program effective January 1, 2006. Under the program, subsidy payments are made to sponsors (employers and unions) of qualified retiree prescription drug plans for each qualifying retiree covered under the plan. A qualifying covered retiree is a Part D eligible individual who is not enrolled in a Part D plan but who is covered by a qualified retiree prescription drug plan. The subsidy payments for each qualifying covered retiree generally equal 28 percent of allowable retiree drug costs. Medicare requires that the sponsor of a qualified retiree prescription drug plan submit an RDS application to CMS each year. As part of the application process, plan sponsors must submit a list of qualifying covered retirees. The submitted list should include retiree identification information as well as the plan sponsors coverage effective and termination dates. Plan sponsors, or their vendors, must accumulate retiree drug costs and prepare and submit cost reports to CMS before requesting subsidy payments. CMS created the RDS secure Web site as a secure portal for plan sponsors participating in the subsidy program to submit RDS applications and requests for payment. Blue Cross Blue Shield of Massachusetts, Inc., (BCBSMA) is a not-for-profit health care company headquartered in Boston, Massachusetts, that offers prescription drug coverage to its retired employees. BCBSMA uses a third-party vendor to report prescription drug costs to CMS. BCBSMA received approximately $460,000 in plan year 2006 interim subsidy payments based on reported gross retiree drug costs of approximately $2.2 million and allowable retiree costs of approximately $1.6 million. The objectives of our review were to determine whether BCBSMA (1) met the requirements to be a plan sponsor, (2) established controls to ensure that drug subsidy costs were correctly reported, and (3) established administrative safeguards over retiree data included in the RDS secure Web site.