Behind the Bill: July 24, 2024

In August 2022, President Joe Biden signed the Inflation Reduction Act into law, marking a significant milestone in the ongoing effort to improve health care in the US. One of the most impactful provisions of this legislation is the ability for Medicare Part D enrollees to spread their out-of-pocket (OOP) prescription drug costs over the course of the plan year rather than paying all at once at the pharmacy through the Medicare Prescription Payment Plan (M3P).

Coupled with the OOP cap of $2000 for enrollees, which is also set to begin in 2025, M3P is intended to help alleviate the financial burden on seniors and individuals with disabilities by making their medication costs more manageable and predictable throughout the year.

Last week, the Centers for Medicare & Medicaid Services (CMS) released the long-awaited final part two guidance on M3P, finalizing requirements proposed in the draft guidance from February 2024. Although the final guidance almost exclusively focuses on the education and outreach requirements for plan sponsors to ensure enrollees are aware of the program, it also reaffirmed how the plan works.

How the Payment Plan Works

After opting into the program, enrollees will pay $0 at the point of sale for any covered Part D drug. Instead, the enrollee’s Part D sponsor will pay the pharmacy directly for these OOP costs. The sponsor will then send the enrollee a monthly bill over the remainder of the year to repay those OOP costs.

Although plan sponsors are actively updating their communication efforts to inform enrollees who may be likely to benefit from M3P, CMS added a parameter at the point of sale. Sponsors are required to implement a system that notifies the pharmacy when an enrollee’s OOP costs for a single prescription reaches or exceeds $600. The pharmacy will then provide the enrollee with the sponsor’s “Likely to Benefit Notice,” informing them of the program, even if they have already declined interest.

This notification process also applies to enrollees with supplemental coverage, such as State Pharmaceutical Assistance Programs, charity, or other health plans, even if their final patient pay amount is lower than the $600 threshold due to supplemental contributions.

Outreach and Communication Requirements

The guidance builds on previous draft directives and includes several key components for informing eligible enrollees. Part D plan sponsors must include information about the new payment plan in their existing communication materials, including adding high-level information in the 2025 Part D Explanation of Benefit (EOB). Notably, CMS is not requiring updates to the membership ID card itself. Sponsors can also send the program election request form either with the membership ID card mailing or separately, but within the same timeframe.

CMS also provided several resources for plan sponsors to utilize in their communication efforts, including, but not limited to:

• Election Request Form: Sponsors can send the form either with the membership ID card or in a separate mailing to new enrollees.

• Likely to Benefit Notice: Sponsors can use this notice to inform enrollees who are likely to benefit from the program in the upcoming year and must also provide this notice to pharmacies on their behalf.

• Failure to Pay Notice: Sponsors can use this notice to notify enrollees who have missed a payment. Since the plan is an arrangement between sponsor and enrollee, pharmacies cannot be held financially responsible for nonpayment. Enrollees will not be charged interest or fees for late payments.

As the January 2025 implementation date approaches, CMS is rolling out a series of educational resources and training sessions to ensure that everyone, from enrollees to health care providers, is prepared for the new payment plan.

Discover More About the Changing Landscape of Oncology Care

The M3P is poised to significantly impact oncology care by providing financial relief to patients, standardizing costs across care settings, supporting financially strained integrated delivery networks and community practices, increasing access to treatments, and necessitating operational adjustments in financial planning and patient notification systems. As the health care landscape evolves, M3P will be a crucial component in ensuring that oncology patients receive the care they need without undue financial burden.

Curious about how M3P fits into the broader health care landscape of oncology care? Dive deeper into the latest insights and predictions by exploring the 2024 Landscape Updates Report. Uncover detailed analyses on care settings, reimbursement trends, and the financial dynamics affecting oncology practices today. Download the 2024 Landscape Updates Report now to stay informed on the future of oncology care and how new polices like M3P are shaping the industry.

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Reference

S Meena. Department of Health & Human Services. Medicare Prescription Payment Plan: final part two guidance on select topics, implementation of Section 1860D-2 of the Social Security Act for 2025, and response to relevant comments. Published July 16, 2024. Accessed July 17, 2024. https://www.cms.gov/files/document/medicare-prescription-payment-plan-final-part-two-guidance.pdf