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Medicare Part D Coordination of Benefits with Other Programs. Who Pays First?

Category: Your Medicare Plan Coverage
Published: May, 29 2008 03:05:43
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If you are confused about who pays first when a beneficiary has a Medicare Part D plan and other prescription drug coverage, you are not alone.  The chart below is provided by CMS (The Centers for Medicare and Medicaid Services) and answers the question Who Pays First when coordinating benefits between Medicare Prescription Drug Plans and other plans.

Who Pays First If A Beneficiary Has Part D and….  Answer
Is also covered under a State Pharmaceutical Assistance Program (SPAP)? SPAP coverage is secondary to Part D, so the beneficiary’s Part D plan will pay first.
Is retired and is covered through the former employer’s retiree Group Health Plan (GHP)? When a beneficiary is covered through a retiree GHP, the GHP is secondary to Part D.  The beneficiary’s Part D plan will pay first.
Is also covered under the GHP of a retired spouse? When the beneficiary is covered through the GHP of a retired spouse, the GHP is secondary to Part D.  The Part D plan will pay first.
Has retiree GHP coverage and is covered under their spouse’s retiree GHP? Because the beneficiary and spouse are both retired, the two GHPs are secondary to Part D.  The Part D plan will pay first, and then the beneficiary’s own GHP will be billed second, followed by the spouse’s GHP if there is any remaining balance.
Has both retiree GHP coverage and SPAP coverage? Part D is primary to both the retiree GHP coverage and the SPAP coverage.  The Part D plan will pay first, and then the GHP coverage would be billed second, followed by the SPAP if there is any remaining balance.
Is also covered under Medicaid? Medicaid only pays for drugs for Part D beneficiaries when those drugs are not allowed to be covered by Part D.  Therefore, people who are covered under both Part D and Medicaid will never have drugs that are paid for by both types of coverage.  Either the Part D plan will pay, or Medicaid will.
Is covered under both a retiree GHP and Medicaid? The retiree GHP is secondary to Part D.  Medicaid is a “payer of last resort,” so it is secondary to the GHP.  If the drug is covered under Part D, the Part D plan will pay first and then the GHP will be billed, but Medicaid will not because it cannot pay for Part D-covered drugs.  If the drug is not a Part D-covered drug, the GHP will be billed first and then Medicaid.
Is currently working with coverage through the employer’s Group Health Plan (GHP)? When a beneficiary is covered through their employer’s GHP because they are actively working, generally Part D is secondary to the GHP.  The GHP will generally pay first. (depends on the number of actively working individuals)
Is also covered under the employer GHP of an actively working spouse? When a beneficiary is covered through the GHP of an actively working spouse, generally Part D is secondary to the GHP.  The GHP generally will pay first. (depends on the number of actively working individuals)
Is also covered under worker’s compensation (WC)? Worker’s compensation is primary to Part D for all drugs that are related to the WC injury or illness.  The WC plan will be billed for all such drugs first, and the Part D plan will be billed second.  If the drug is not related to the WC injury or illness, then only the Part D plan will be billed.
Also has no-fault or liability coverage? If the beneficiary was injured or fell ill and has no-fault or liability coverage (such as when you are in a car accident), the no-fault or liability coverage is primary to Part D for all drugs that are related to that injury or illness.  Therefore, the no-fault/liability coverage will be billed for all such drugs first, and the Part D plan will be billed second.
Source: Centers for Medicare and Medicaid (CMS) WhatIfCOB_01.04.06.pdf



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