Changing Cost Reporter Vendors

If a Plan Sponsor terminates a business relationship with a Cost Reporter Vendor, there are actions that should be taken to properly submit interim costs, final costs, or both depending on the timing of the change.

During the Plan Year:

If a Plan Sponsor changes Cost Reporter Vendors during a Plan Year, the Plan Sponsor may take over submission of interim costs or assign a new Cost Reporter Vendor to submit interim costs.

If the Plan Sponsor takes over interim cost submission:
The Plan Sponsor may accept the Cost Reporter Vendor's previously submitted cost data if no adjustments are necessary and submit new interim costs for the unreported plan months. The Plan Sponsor may also assume responsibility for submitting cost data for the entire Plan Year if the previously submitted cost data requires adjustment, which will require the old Cost Reporter Vendor to submit a zero cost report to prevent duplication of costs.

Example of Plan Sponsor accepting old cost data and reporting cost data for remaining time during a Plan Year:

If the Plan Sponsor assigns a new Cost Reporter Vendor during a Plan Year to submit interim costs:
If the Plan Sponsor assigns a new Cost Reporter Vendor and the former Cost Reporter Vendor had already submitted cost data, the new Cost Reporter Vendor can accept the previously reported cost data if adjustments are unnecessary, or may assume responsibility for submitting cost data for the entire Plan Year. If the new Cost Reporter Vendor will report cost data for the entire Plan Year, the old Cost Reporter Vendor must submit a zero cost report to prevent duplication of cost data.

If a Plan Sponsor changes Cost Reporter Vendors during a Plan Year and both Cost Reporter Vendors reported interim costs, additional coordination may be required when submitting final costs during Reconciliation. If multiple entities will be submitting final costs, zero final costs must be reported by each Cost Reporter Vendor for any plan months not administered by that Vendor to prevent duplication of cost data. If the Plan Sponsor or the new Cost Reporter Vendor is the only entity reporting final costs, all Plan Months must have cost data reported and no zero cost reports will be required.

Example of new Cost Reporter Vendor accepting old cost data and reporting cost data for remaining time during a Plan Year:

Example of new Cost Reporter Vendor taking over reporting all cost data for a Plan Year:
Cost Reporter Vendor A must submit zero cost reports to remove old cost data.

After the Plan Year and Before Reconciliation Request has been Completed:

When the Plan Sponsor terminates a business relationship with a Cost Reporter Vendor after the Plan Year has ended but before final costs have been reported for Reconciliation, the Plan Sponsor may submit final costs or assign a new Cost Reporter Vendor to submit final costs. Final Cost Reports must include cost data for all months within the Plan Year. There is no need for the previous Cost Reporter Vendor to submit zero cost reports because interim costs are not combined with final costs.

In all cases, the Plan Sponsor must coordinate the Cost Threshold and Cost Limit for each individual Qualifying Covered Retiree (QCR). This means that the Plan Sponsor must apply the applicable Cost Threshold and Cost Limit to all gross costs the Plan Sponsor chooses to report for each QCR for the entire RDS Application Plan Year. The Plan Sponsor must not apply the Cost Threshold and Cost Limit separately to each discrete set of gross costs reported by each Cost Reporter Vendor. If there are multiple sources reporting cost data for individual QCRs, the Cost Threshold and Cost Limit for each QCR must be coordinated between each Cost Reporter Vendor.

If you have questions or need additional information, contact CMS' RDS Center.