Issued by: Centers for Medicare & Medicaid Services (CMS)

Issue Date: May 09, 2016

Program Area: CSR Reconciliation (CSR)

Question: Please provide guidance on how to calculate the Cost-sharing Reduction (CSR) amount when a member's claims are being re-adjudicated under a standard plan with a Coordination of Benefits (COB) recovery and the actual COB recovery will not be adjusted? For example, for a $2,500 service, COB covered $1,500 and the enrollee paid $1,000 in the CSR plan. The enrollee would have paid $1,500 in the standard plan, and since the issuer will not refund COB, the allowed cost would be more than in the plan variation.

Answer: Issuers must reduce total allowed costs by the COB amount in both the plan variation and the standard plan (REGTAP FAQs 15101 and 15106) since amounts paid by third party insurers are not recoverable as CSR provided. Therefore, in this example for a $2,500 service, if COB in the plan variation is $1,500 and the enrollee share is $1,000, COB in the standard plan is also $1,500 and the enrollee share is $1,000, since the sum of what the issuer or COB paid and the enrollee paid for a service cannot exceed total allowed cost and total allowed cost must be the same in the variation and the standard plan. However, if the issuer pays part of the cost, the issuer may seek reimbursement CSR provided for up to that amount. For example, if the same $2,500 service covered in the cost-sharing plan variation, the COB paid $1,500, the plan paid $500, and the enrollee paid $500 (with costs in the associated standard plan of $1,500 paid by the COB, $0 paid by the plan, and $1,000 paid by the enrollee), the issuer would report $500 of CSR provided.

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