CMS Issues Additional Information on Medicare Prescription Payment Plan

Summary: CMS has issued new guidance related to the Prescription Drug Payment Program including education requirements, requirements for carriers, and the pharmacy process. Public feedback is requested by CMS to ensure the program adequately meets the needs of those impacted. Read Time: 3 min

Table of Contents:

1. What is the Medicare Prescription Payment Plan?
2. What Was Outlined in the First Draft Guidance?
3. What Does the New Draft Guidance Include?
4. What Education is Required to Enrollees About the Medicare Prescription Payment Plan?
5. How Will Part D Carriers Notify Enrollees Who Are Likely to Benefit from the Program?
6. Provide Your Feedback

When the Inflation Reduction Act was passed in August 2022, it included a provision to allow Medicare Part D enrollees to pay their Medicare Part D out-of-pocket costs in monthly installments starting in 2025.

In mid-February 2024, the Centers for Medicare and Medicaid Services (CMS) released additional guidance for this landmark payment plan, otherwise known as the Medicare Prescription Payment Plan. The program is aimed at lower income seniors and those with disabilities who live on a fixed income each month, as well as those with high out-of-pocket Part D expenses.

Once in place, individuals with high out-of-pocket costs will be able to spread them out over the year to help reduce the burden of up-front costs when picking up their drugs at the pharmacy.

What is the Medicare Prescription Payment Plan?

Starting on January 1, 2025, all Medicare Part D and Medicare Advantage Prescription Drug Plans are required to offer Medicare Part D enrollees the option to pay their out-of-pocket costs using a monthly payment plan.

Similar to Extra Help, this is a crucial program to help low-income individuals be able to receive their monthly medication without having to worry about how they will cover the costs at the pharmacy.

According to the Health and Human Services Secretary, Xavier Becerra, “Too many seniors and people with disabilities can’t afford to fill their prescriptions at the pharmacy – and that is unacceptable. Thanks to President Biden’s Inflation Reduction Act, certain Medicare patients will be able to spread their costs across smaller, monthly payments,”

Individuals will be able to opt into the program for 2025 during the Annual Enrollment Period that takes place between October 15 and December 7, 2024.

What Was Outlined in the First Draft Guidance?

Originally drafted in August 2023, the original guidance for the Prescription Drug Payment Plan includes monthly sample payment plan calculations, instructions for carriers on how to handle billing, requirements for pharmacy reimbursements, discussion of low-income subsidy integration, and data submission requirements, among other things.

The first draft guidance set the baseline for the program and outlined in detail how the program would work and who would benefit. The goal for the second draft guidance is to help carriers and enrollees understand how information will be relayed to them and the communication and educational materials that will be available.

What Does the New Draft Guidance Include?

The guidance released by CMS for the Medicare Prescription Payment Plan outlines requirements for plan providers, outreach, education, pharmacy processes, and operational considerations ahead of the programs pilot year.

In addition to the carriers, other interested parties such as advocacy groups, pharmacies, and health care providers will be given access to a library of educational resources to provide to any Medicare Part D enrolled individual whom they feel would benefit from the program.

It is extremely important to CMS that enrollees be fully educated on the payment plan program before the start of 2025 to ensure everyone who could benefit from the program can take advantage of it.

What Education is Required to Enrollees About the Medicare Prescription Payment Plan?

Medicare Part D plan carriers are required to include information about the Medicare Prescription Payment Plan in all communication materials, websites, ID cards, and mail distributed to enrollees moving forward. This will ensure that all enrollees receive information on the program before it becomes active in 2025.

Education and outreach regarding the payment plan is a huge priority of CMS throughout 2024.

In addition to Medicare Part D carriers providing information, CMS will also be releasing new documentation and education regarding the program. The educational information provided by CMS will be present on Medicare.gov, the Medicare Plan Finder, and the 2025 Medicare&You handbook.

How Will Part D Carriers Notify Enrollees Who Are Likely to Benefit from the Program?

While this is a monumental program that will likely benefit thousands of Americans, the program is not for everyone. There are no qualification requirements to set up a payment plan. However, the payment plan may not make sense for some individuals with low drug costs, higher incomes.

It is essential to ensure individuals who would likely benefit from the program are aware it is available to them. In the 4^th quarter of 2024, Medicare Part D plan providers will be reaching out to enrollees who spent over $2,000 in out-of-pocket costs for the calendar year. They will be informing these individuals of the availability of the payment plan for 2024 and will be available to answer any questions or concerns from the enrollee.

Additionally, carriers will be contacting the preferred pharmacy of the individuals who have spent high out-of-pocket costs, letting them know of the availability of the payment program and providing a list of patients to the pharmacy who may benefit.

This will help ensure that those who would benefit most from a payment plan have ample opportunity to ask questions and understand the new program. 

Provide Your Feedback

CMS is utilizing several avenues to ensure the voices of those impacted by this program are heard. Beginning February 15, CMS has opened a public comments forum for individuals who wish to comment or propose new ideas regarding the payment plan. Comments will be open until the 30-day window for feedback has closed on March 16, 2024.

If you would like to provide feedback or recommendations, please send your contact information and comments to PartDPaymentPolicy@cms.hhs.gov. When sending communications to this email address, please use the subject line “Medicare Prescription Payment Plan Guidance – Part Two” to ensure the email is opened and read before the deadline has passed.

If you have questions about your current Medicare Part D plan or are looking to enroll in new coverage, complete our online rates form to speak with a licensed agent who can assist you with Medicare Part D plans in your area!