Medicare Part D plans must take a wide variety of steps prior to and throughout the plan year to ensure enrollees and pharmacies are aware of the program’s new prescription payment plan and have several different ways to opt-in, under a new Centers for Medicare and Medicare Services draft guidance on the Inflation Reduction Act’s co-pay “smoothing” plan.
Starting in 2025, the IRA’s Medicare Part D redesign offers beneficiaries with very high-cost prescriptions the option to spread their co-pays along monthly installments rather than paying the full cost at the time of prescription dispensing.
The new copay smoothing plan is one part of the controversial law the pharmaceutical industry loves because it should help prevent patients from not filling prescriptions due to steep out-of-pocket costs. The plan also is coupled with the industry-endorsed idea of setting a $2,000 cap on beneficiaries’ annual out-of-pocket costs.
The February 15 guidance is the second of two drafts outlining how Medicare will implement the copay smoothing program. (Also see "Medicare Copay ‘Smoothing’ Plan Shows Nothing Is Simple In Part D" - Pink Sheet, 10 September, 2023.)
Part D plans must educate enrollees about the program and ensure pharmacies know when an enrollee incurs out-of-pocket costs for a Part D drug that make it likely they may benefit from the prescription payment plan. And then plans must ensure the pharmacy educates the enrollee.
CMS will require that plans use existing, but updated, materials already required under law to notify and educate Part D enrollees about the new copay payment option.
Plan sponsors must send both information about the prescription payment plan and an election request form with the hard copy mailing of an enrollees’ membership ID card. They also must include educational information in the annual Evidence of Coverage communication, which provides beneficiaries with detailed descriptions of their benefits and rights.
Annual Notice of Change marketing material also will also be updated to include language on the prescription drug payment plan, including language on how to opt-in.
Explanation of Benefits statements also will be updated to account for the program. And it must be discussed on plan websites along with a way for people to enroll in the program online.
Targeted Outreach
CMS expects special targeted outreach and education to specific enrollees identified as likely to benefit prior to and during the plan year.
To notify people who might benefit prior to the start of the plan year, at minimum plan sponsors must assess their enrollees’ prescription drug costs from the current year and contact those who incurred $2,000 in out-of-pocket costs for covered drugs through September of that year.
Part D sponsors also will need guidelines for identifying enrollees for targeted communication during the plan year. At minimum, Part D sponsors must flag those who have prior authorization or other utilization management edits in place for a drug that based on their benefit structure would result in out-of-pocket costs that would require a pharmacy to notify the beneficiary.
Flexible Enrollment
Part D beneficiaries must be able to enroll in the new program at multiple points throughout the year, including prior to the plan year, as well as annual and special enrollment periods.
Plans also will must let beneficiaries enroll a variety of ways, such as paper, telephone or website.
Sponsors must accept election requests for enrollment regardless of the request’s format. And if an election request is incomplete, plans must contact the enrollee to collect the missing information, CMS wrote in the guidance.
Plans also are expected to create a process for beneficiaries to voluntarily terminate participation in the program.
CMS expects to create model materials for plan sponsors this summer that will help them meet their responsibilities.
The guidance also outlines how plan sponsors must address the new copay program in Part D bids, how it impacts medical loss ratio calculations and how CMS will monitor and ensure compliance with the new program.
Comments on the draft are due 16 March. CMS expects to issue the final guidance in the summer. The agency indicated this guidance is specifically for calendar year 2025 and that policies may change in subsequent years.
