Understanding Your Part D Explanation of Benefits

How to read and use this helpful drug benefit summary

Most likely you get a lot of mail from your Medicare provider(s). One document to watch for is your monthly Medicare prescription drug plan “Explanation of Benefits” (EOB). This document lists the prescriptions you fill, any adjustments that were made from a prior claim, payments made by you and your plan, and any additional payment support from programs or organizations. Think of your EOB as a helpful tool for managing your Part D prescription drug claims and costs.

Why Your Part D EOB Is Important

This document provides a summary of the prescriptions you’ve filled in the previous month and information about your drug coverage, such as:

  • Whether you’ve met your deductible (if you have one) and, if not, how much more you need to spend before your plan begins to pay its share
  • What you have paid “out-of-pocket” to date for your prescriptions
  • What your plan pays and other payments that were made on your behalf through a program or organization like a State Pharmaceutical Assistance Program (SPAP)
  • Which Part D coverage stage you are in
  • Any deductible that you met or other costs from a prior plan that you were in this year

How to Read Your EOB

Many Part D plans use a “model” EOB document provided by the Centers for Medicare & Medicaid Services (CMS). See a sample EOB here.
If your plan uses a “model” document, the first page contains a list of the six sections of information it provides. Let’s take a look at the first three sections in detail.
SECTION 1: Your prescriptions in the last month

  • Chart 1 shows a list of your prescriptions filled by date in the past month and which pharmacy you used. Be sure to check the accuracy of this list.
  • The chart displays three columns that show the amount the plan paid, what you paid, and any other payments from an organization or program like an SPAP.

Express_Scripts_Med_Chart1

  • Near the bottom of the chart, you’ll see the monthly totals paid for your prescriptions by the plan, by you, and by other programs on your behalf (if any) (“total drug costs”). It will also provide your monthly out-of-pocket costs. At the bottom, you can view the year-to-date total for what you’ve spent out of pocket on prescriptions. Finally, a total of the three columns indicates what you, your plan, and other organizations (if any) have spent since January 1 (“year-to-date total drug costs”).

Express_Scripts_Med_Chart5

 

SECTION 2: The Part D drug payment stage you’re in

  • In this view, the stage you’re in is identified by the shaded outline. Here you will see a description of the dollar amount you and/or your plan (“total drug costs”) need to reach before moving to the next stage of coverage. It also shows your current year-to-date “total drug costs,” which indicate how close you are to moving to the next stage.
  • The bottom section of the shaded box “What happens next?” gives you the additional amount that you, your plan and others on your behalf (if any) need to spend in “total drug costs” to move to the next payment stage. This is especially important if you are in the Initial Coverage stage, because you will see how close you are to entering the Coverage Gap, when you will pay more for your prescriptions. Before you get too close to the gap, you might want to review your medications with your plan or doctor. Ask if there are ways to delay entering this stage, such as by switching to a generic medication.

Express_Scripts_Med_Chart6

 

SECTION 3: “Out-of-pocket” and “total drug costs” amounts and definitions

  • This section provides your monthly and yearly “out-of-pocket costs” and “total drug costs” along with definitions of what these costs include or do not include.

Express_Scripts_Med_Chart4_NEW

Additional Information
The last three sections provide information on various topics. Section 4 may include changes to our Drug List that affect drugs you take, such as a change to the coverage or cost of a drug. Section 5 tells you what to do if you find a mistake in the EOB or have questions. Additionally, you can find information about protecting yourself from fraud and how to contact the plan or Medicare with your concerns. Section 6 discusses the plan’s Evidence of Coverage, the benefits booklet that explains the plan and the rules you need to follow to obtain drug coverage. Certain chapters and topics are highlighted that will provide you instructions if you have issues related to your drug coverage or difficulty paying for your drugs.

 

Posted on: June 21, 2016
by
Express Scripts Medicare Advisor
Ms. Kyong specializes in personal finance issues for Medicare recipients. Topics include managing healthcare costs in retirement.

Tags:

Print Friendly

Stay Up-to-Date

Get the most out of Medicare with monthly email newsletters that give you the latest news and helpful tips for managing your healthcare and planning for the future.

> Sign Up Now