I'm getting clients losing group coverage that want a MAPD. I am asking them if they got a "Letter of Creditable Coverage" and if it stated that their Rx coverage is creditable. Most say "it's around here somewhere"....
I tell them if they find it, make sure they keep it with their insurance file.
So far, I have only had one problem, and that was with a client coming off group that retired and had waived Part B. I told her to take her letter of creditable insurance with her to the SS office when she applied for Part B. She didn't and got docked a penalty. Good thing I had her check "Send a Coupon Book for Payment" instead of SS deduction, etc. When she got the letter saying she owed a penalty, I told her not to pay it, but take her letter into the SS office like I told her before. (Haven't heard back about this yet)
I gather no one, including SS, ever asks for that letter we hear so much about. It appears that the only time it comes into play is when a penalty is applied and the client yells. Then we scramble to get the letter sent to whoever wants it (apparently only SS).
Since there are two penalties, one for Part B and the other for Part D... I wonder whoever is it that requires that letter for Part D... is it the PDP carrier, since Medicare does not issue PDPs? I have not had the situation come up yet... just want to be prepared.
Anyone have a comment?
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To be truly independent, an agent should not be dependent on a government bureaucrat for contracts or commissions.
I'm getting clients losing group coverage that want a MAPD. I am asking them if they got a "Letter of Creditable Coverage" and if it stated that their Rx coverage is creditable. Most say "it's around here somewhere"....
I tell them if they find it, make sure they keep it with their insurance file.
So far, I have only had one problem, and that was with a client coming off group that retired and had waived Part B. I told her to take her letter of creditable insurance with her to the SS office when she applied for Part B. She didn't and got docked a penalty. Good thing I had her check "Send a Coupon Book for Payment" instead of SS deduction, etc. When she got the letter saying she owed a penalty, I told her not to pay it, but take her letter into the SS office like I told her before. (Haven't heard back about this yet)
I gather no one, including SS, ever asks for that letter we hear so much about. It appears that the only time it comes into play is when a penalty is applied and the client yells. Then we scramble to get the letter sent to whoever wants it (apparently only SS).
Since there are two penalties, one for Part B and the other for Part D... I wonder whoever is it that requires that letter for Part D... is it the PDP carrier, since Medicare does not issue PDPs? I have not had the situation come up yet... just want to be prepared.
Anyone have a comment?
I met with a client this morning that had just recently enrolled in a Pyramid MAPD for a Jan. 1, 2009 effective date. She was on Pyramid's Today's Options MA only. She previous had Humana PDP until dropping it last AEP and went 2008 with only the MA plan and no PDP.
She had a letter from Pyramid that she wanted me to read and that's why I was there. This letter said basicall, "you are enrolled in an MAPD for 2009. The records from SS show that you were not enrolled in a creditable PDP for the calender year of 2008. There may be a penalty assesed if this information is correct. If this information is not correct, please fill out out the enclosed questionarie and return to us. If we don't hear from you, we will assume that the information is correct".
The questionaire asked about any prescription drug coverage she had in 2008 and requested proof be sent in if she did submit the form. That, of course, would be the letter of creditable coverage. If she had such a letter, she was to submit it to Pyramid.
I met with a client this morning that had just recently enrolled in a Pyramid MAPD for a Jan. 1, 2009 effective date. She was on Pyramid's Today's Options MA only. She previous had Humana PDP until dropping it last AEP and went 2008 with only the MA plan and no PDP.
She had a letter from Pyramid that she wanted me to read and that's why I was there. This letter said basicall, "you are enrolled in an MAPD for 2009. The records from SS show that you were not enrolled in a creditable PDP for the calender year of 2008. There may be a penalty assesed if this information is correct. If this information is not correct, please fill out out the enclosed questionarie and return to us. If we don't hear from you, we will assume that the information is correct".
The questionaire asked about any prescription drug coverage she had in 2008 and requested proof be sent in if she did submit the form. That, of course, would be the letter of creditable coverage. If she had such a letter, she was to submit it to Pyramid.
Thanks for taking the time to respond so thoroughly. I appreciate it.
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Originally Posted by workingstiff
Yes, it's the Part D carrier that needs the letter and is also responsible for assessing the penalty if applicable.
Are you sure? How did you come by this infomation? I was under the impression that SSA flagged the penalty, did the calculation, and requested the penalty amount determined to be collected by the PDP carrier. I can accept the idea that the PDP carrier would act as the middleman.
What I am getting at is: What if someone NEVER applies for a PDP.... if the PDP carrier is the one flagging the penalty, then the person will never see this letter if they never apply for a PDP, right?
I don't think so.... if I am right, (SS tracks this info and CMS polices the regs) I wonder how long will such a person go before being contacted by CMS?
I expect that one of these years CMS is gonna come down on these people. (They are too busy busting agent commissions this year, but wait till next year! Lookout seniors!!! By then the penalty will rise to about $13... maybe they will wait until it gets higher... who knows?)
Last edited by retread : 12-31-2008 at 11:21 PM.
Reason: Posts merged
Retread, you're correct. CMS assesses the penalty and notifies the Carrier and then the Carrier is responsible for collecting the penalty.
I appreciate the vote of confidence, but if you don't mind, how did you come by that knowledge? Do you have experience with it through a client? Did CMS correspond with you on this? Did you read this in a publication you can direct me to? Do you work for SSA or CMS? etc. etc. etc.....
My other question remains unanswered... if a beneficiary never applies for a PDP, will he ever be sent a notice of penalty?
I appreciate the vote of confidence, but if you don't mind, how did you come by that knowledge? Do you have experience with it through a client? Did CMS correspond with you on this? Did you read this in a publication you can direct me to? Do you work for SSA or CMS? etc. etc. etc.....
My other question remains unanswered... if a beneficiary never applies for a PDP, will he ever be sent a notice of penalty?
To answer your last question, no, the person will never get a letter about the penalty if they never apply for a PDP. It's in the Medicare and You book about the penalty, but, no separate notices have been sent since 2006 when they sent them to all medicare eligibles. If they never apply, they never have a penalty.
I just enrolled a guy during AEP into a PDP. The guy had been on Medicare for 10 years. He didn't take a PDP plan when they were first eligible, he never had any other kind of coverage, creditable or otherwise.
I told him to expect a penalty. He acted as though it was first he had ever heard of it. He has received his PDP card. He has not gotten word of the penalty yet.
To answer your last question, no, the person will never get a letter about the penalty if they never apply for a PDP. It's in the Medicare and You book about the penalty, but, no separate notices have been sent since 2006 when they sent them to all medicare eligibles. If they never apply, they never have a penalty.
I just enrolled a guy during AEP into a PDP. The guy had been on Medicare for 10 years. He didn't take a PDP plan when they were first eligible, he never had any other kind of coverage, creditable or otherwise.
I told him to expect a penalty. He acted as though it was first he had ever heard of it. He has received his PDP card. He has not gotten word of the penalty yet.
Surprised he didn't get a questionnaire asking about creditable coverage. I wrote a lady a PDP during the AEP that had never gotten one and had no creditable coverage. She purchased Coventry from me and then got a letter from Coventry asking her if she had any prior creditable coverage. I told her about the penalty when I wrote her, but being the PDP will save her over $100 a month in prescription charges, she happily signed up.
Surprised he didn't get a questionnaire asking about creditable coverage. I wrote a lady a PDP during the AEP that had never gotten one and had no creditable coverage. She purchased Coventry from me and then got a letter from Coventry asking her if she had any prior creditable coverage. I told her about the penalty when I wrote her, but being the PDP will save her over $100 a month, she happily signed up.
I expect that he will get a letter asking exactly that. He just hasn't as of Jan. 3, 2009.
I told him to expect a penalty. He acted as though it was first he had ever heard of it. He has received his PDP card. He has not gotten word of the penalty yet.
It took about 9 months for one of my clients to get a bill.
It took about 9 months for one of my clients to get a bill.
Rick
Yeah, figures... but the overriding concern I had, is whether or not CMS will instigate a collection on non-enrollees. I didn't think it through until now, and your response hit me. Of course they wouldn't.... The client instigates the process only when they join. Intelligence strikes every so often at my house....
The next concern was the escalating amount due when they are penalized. This is resolved with the calculation of the penalty by rule and the agent's explanation to the client should they continue to delay.
I have already got some clients calling with letters about a penalty with no amount mentioned. I am just glad I was upfront with them when I presented my offer. I always make it clear to those who have never joined a PDP that by choosing a MAPD they were exposing themselves to the penalty and how much I estimated it to be.
The fact that the PDP is embedded can slide by a lot of seniors and I wanted to bring this out.
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Apparently the penalty process starts with a letter to the client that they are subject to the penalty. Then at some time later the amount is presented. If CMS takes several months to tell them how much, I expect it will be retroactive to Jan 1st of that year, so it will be more than I estimate for the months to date.
Letter of Creditable Rx Coverage
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