by Yvonne Tso, PharmD, MBA
Beginning in CY 2025, a statutory requirement[1] takes effect for Part D sponsors to provide all Part D enrollees the option to pay their out-of-pocket (OOP) Part D prescription drug costs in monthly installments throughout the plan year, instead of paying OOP costs in full at the point-of-sale (POS) when they sign up for the Medicare Prescription Payment Plan (MPPP). Part D sponsors, however, have to pay the pharmacy the OOP cost-sharing amount that participants would have paid if they were not in the MPPP. The Part D sponsor will bill the MPPP participants monthly for any OOP cost-sharing they incur while in the program up to the maximum amount permissible which is calculated from a statutory formula for the duration of the plan year even after an individual has been disenrolled, voluntarily or involuntarily.[2]
If the beneficiary incurs the maximum OOP cost of $2,000 in January of 2025, the monthly cap for the participant in the MPPP would be $2,000/12 or $166.67 a month and nothing more for the year. Computation of the monthly payment cap varies depending on when the enrollee opts in and the time over which the costs are incurred until the enrollee reaches $2,000.[3] The term “maximum monthly cap” means an amount determined by calculating the annual OOP threshold minus any Part D costs the Part D enrollee incurred during the year before opting in, divided by the number of months remaining in the plan year.[4]
Part D sponsors are required to communicate to and educate their enrollees about the MPPP prior to CY 2025. Part D sponsors are encouraged to proactively identify enrollees who are likely to benefit from the MPPP by reviewing enrollee claim history and payments in the 4th quarter of 2024 and when approving a covered Part D drug with OOP costs above the pharmacy POS notification threshold.[5] The“Medicare Prescription Payment Plan Likely to Benefit Notice” must be sent to the Part D enrollee within 24 hours of receiving the coverage determination request either by mail or electronically depending on the enrollee’s preference.
Part D sponsors must ensure that pharmacies inform Part D enrollees of the program, especially those who can benefit from participation. Enrollees eligible for the low-income subsidy or those who have flat copayments instead of cost share may not see the value of MPPP. The Centers for Medicare & Medicaid Services (CMS) will support the communication efforts with model materials to be released in the summer of 2024 prior to the Annual Election Period (AEP). The model materials are to be included with other marketing materials to be submitted to CMS via HPMS for approval. The educational and outreach materials must be easy-to-understand, at an appropriate literacy level, and using language that allows all Part D enrollees, especially those with limited English proficiency and access challenges, to make informed decisions. The Medicare Communications and Marketing Guidelines (MCMG) will also provide guidance for Part D required materials, content, and delivery requirements. [6]
Part D sponsors can include the MPPP promotional and educational materials with the election request form in the membership ID card issuance packet, in the Evidence of Coverage (EOC), and the Annual Notice of Change (ANOC). The Part D Explanation of Benefits (EOB) will have to be updated to reflect the benefit phase changes in Part D and the MPPP.
Additionally, Part D sponsors are required to have a publicly available website to include information about the MPPP and how to opt into the program. The website also must show examples of how the program calculation works with easy-to-understand explanations and cost-sharing scenarios to illustrate how and when the program would or would not benefit a Part D enrollee.
To prepare for the MPPP, Part D sponsors may consider the following:
Incorporate MPPP information in marketing and Part D communication materials (Evidence of Coverage, Annual Notice of Change, Explanation of Benefits); submission period for marketing materials is in early June 2024;
Assess changes in utilization behavior of those who can spread out payments over the course of the plan year rather than pay all at once in a single fill to be built into the assumptions for 2025 Part D bids;
Estimate potential unsettled payments due to default, disenrollment or death; uncompensated unsettled balances can be included in the Part D bid;
Project financial impact due to paying first (payments to pharmacies) and collecting later (from Part D enrollees). Unsettled/uncompensated balances from the MPPP will be considered administrative costs for calculating medical loss ratio (MLR) and be excluded from the MLR numerator;
Coordinate with pharmacy benefit managers (PBMs) that manage the pharmacy network;
Prepare for increased volume of calls to the call center for MPPP questions or complaints; CMS will monitor and collect data about beneficiary complaints and grievances reported via the Medicare Complaints Tracking Module (CTM) to assess compliance with all MPPP requirements, beneficiary protections, and program integrity;
Include MPPP in your training of sales agents and plan staff prior to AEP.
CMS is soliciting comments on the draft Part Two guidance. Comments should be sent to PartDPaymentPolicy@cms.hhs.gov with the subject line “Medicare Prescription Payment Plan Guidance – Part Two.” Comments received by March 16, 2024 will be considered.
If you have comments on the MPPP, this is the time to submit them to CMS. Integritas Medicare has professionals who specialize in risk assessments and Part D. We can help you identify economic and operational risks in the proposed MPPP. Call us at 415-596-5277.
[1] Pursuant to the Inflation Reduction Act of 2022
[2] Maximum Monthly Cap on Cost-Sharing Payments Under Prescription Drug Plans: Draft Part One Guidance on Select Topics, Implementation of Section 1860D-2 of the Social Security Act for 2025, and Solicitation of Comments, August 21, 2023
[3] In CY 2025, Part D enrollees have a maximum outo0of-pocket expense of $2,000 and pays zero after that.
[4] Maximum Monthly Cap on Cost-Sharing Payments Under Prescription Drug Plans: Draft Part One Guidance on Select Topics, Implementation of Section 1860D-2 of the Social Security Act for 2025, and Solicitation of Comments, August 21, 2023
[5] CMS is seeking comments on the range of $400 to $700 for POS notification threshold and whether to use a single prescription or a single day accumulation to count toward notification threshold
[6] Medicare Prescription Payment Plan: Draft Part Two Guidance on Select Topics, Implementation of Section 1860D-2 of the Social Security Act for 2025, and Solicitation of Comments, February 15, 2024.