CMS issues guidance on allowing Medicare beneficiaries to pay Rx costs monthly

Photo: Malorny/Getty Images

The Centers for Medicare and Medicaid Services has released the second part of draft guidance for the Medicare Prescription Payment Plan that outlines requirements for Medicare Part D plan sponsors for the program's first year, in 2025.

These include outreach and education requirements, pharmacy processes and operational considerations, according to CMS.

The draft guidance is part of the implementation of President Biden's prescription drug law, the Inflation Reduction Act, which among other things seeks to allow seniors to spread out their Medicare prescription drug costs over the year, rather than requiring them to pay in one lump sum.

WHAT'S THE IMPACT?

The draft guidance provides information on outreach, education and communications requirements to ensure that people with Medicare Part D, particularly those who are most likely to benefit from the program, are aware of the Medicare Prescription Payment Plan.

The guidance is meant to compliment CMS' forthcoming national education and outreach efforts to engage interested parties, including pharmacies, providers and beneficiary advocates, on program implementation – and to ensure they have the support and materials needed to communicate effectively on the program.

The Medicare Prescription Payment Plan, which goes into effect in 2025, is part of the Inflation Reduction Act's suite of provisions aimed at lowering prescription drug and healthcare costs. 

CMS pointed to instances in which the law is helping to lower costs for Medicare beneficiaries. On January 1, the law expanded eligibility for the Low-Income Subsidy program (LIS or "Extra Help") under Medicare Part D. Nearly 300,000 people with low and modest incomes currently enrolled are now benefitting from the program's expansion, and three million people are eligible for the program, but not yet enrolled, the agency said.

Also on January 1, for some people enrolled in Medicare Part D who have very high drug costs, their out-of-pocket costs will be capped at about $3,300 to $3,800 for the first time. The Medicare Prescription Payment Plan complements these provisions by allowing individuals to spread their spending over the year rather than paying the total out-of-pocket cost up front.

CMS is seeking comments, which should be sent to PartDPaymentPolicy@cms.hhs.gov with the following subject line: "Medicare Prescription Payment Plan Guidance – Part Two." Comments received by March 16 will be considered during development of the final guidance.

THE LARGER TREND

CMS proposed increased flexibility for Part D plans last year to expedite the substitution of lower-cost biosimilar biological products for their reference products.

The proposal would allow Part D plans to categorize these substitutions as maintenance changes, ensuring that all enrollees, not just those starting therapy after the change takes effect, are affected, provided a 30-day notice is given.

A January report from Commonwealth Fund concluded Americans spend significantly more on brand-name prescription drugs compared to residents of most other countries, with per capita pharmaceutical spending nearly three times higher than the OECD average.

This year, changes to the Medicare Part D benefit will include the elimination of the 5% coinsurance requirement for Part D enrollees, with Part D plans now paying 20% of total drug costs in the catastrophic phase, up from 15%.

Beginning in 2025, changes to Medicare's catastrophic coverage will entail Part D plans and drug manufacturers assuming a larger share of costs, as Medicare's portion decreases from 80% to 20% for brand-name drugs and from 80% to 40% for generics.

This shift aims to address rising concerns over Medicare's escalating reinsurance payments to Part D plans, which accounted for nearly half of total Part D spending in 2022, while also requiring Part D plans to cover 60% of costs above the cap and mandating a 20% price reduction on brand-name drugs from manufacturers.
 

Jeff Lagasse is editor of Healthcare Finance News.
Email: jlagasse@himss.org
Healthcare Finance News is a HIMSS Media publication.