The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA) added a new prescription drug program to Medicare. (See Part D of Title XVIII of the Social Security Act (Act), referred to here as “Part D” of Medicare.) Prescription drug coverage under Medicare became available starting January 1, 2006.
Regulations to implement Medicare prescription drug coverage were published January 28, 2005 (70 Fed. Reg. 4193). This guidance pertains to section 1860D-1 of the Act, and 42 CFR §423.56. Under those provisions, most entities that currently provide prescription drug coverage to Medicare beneficiaries must disclose whether the entity’s coverage is “creditable prescription drug coverage” (Disclosure Notice). A disclosure is required whether the entity’s coverage is primary or secondary to Medicare. Health plans and other entities that must comply with these provisions are listed in 42 CFR §423.56(b) and are also referenced on the creditable coverage homepage at http://www.cms.hhs.gov/creditablecoverage. However, entities that contract with Medicare directly as a Part D plan or that contract with a Part D plan to provide qualified prescription drug coverage are exempt from the disclosure requirement. Thus, for example, an employer or union that provides prescription drug coverage to retirees through a Part D plan is exempt from the disclosure requirement. See 42 CFR §423.56(c).
Disclosure of whether prescription drug coverage is creditable provides Medicare beneficiaries with important information relating to their Medicare Part D enrollment. Beneficiaries who are not covered under creditable prescription drug coverage and who choose not to enroll before the end of their initial enrollment period for Part D may pay a higher premium on a permanent basis if they subsequently enroll in a Part D drug plan.
The following document provides further information.