CMS offers additional guidance to allow Medicare recipients to spread out-of-pocket drug costs

Medicare beneficiaries who are having trouble paying their out-of-pocket prescription drug costs would have the option of spreading those costs throughout the year instead of paying all at once, according to guidance issued by the Centers for Medicare and Medicaid Services.

The Inflation Reduction Act's Medicare Prescription Payment Plan will allow people to pay Medicare Part D out-of-pocket costs over the course of the year starting in 2025.

CMS released the second part of draft guidance for the Medicare Prescription Payment Plan that outlines requirements for Medicare Part D plan sponsors, including outreach and education requirements, pharmacy processes, and operational considerations, for 2025, the program’s first year.

In addition to adding flexibility through a payment plan, the law cuts drug costs through provisions such as caps on out-of-pocket costs and the cost of insulin, and a mandate on drug companies to pay a rebate to Medicare if they raise prices faster than inflation.

The draft guidance provides information on outreach and education to ensure that people with Medicare Part D are aware of the Medicare Prescription Payment Plan. CMS will conduct nationwide education and outreach efforts to inform pharmacies, providers and Medicare advocates on program implementation and ensuring they have the support and materials needed to communicate about the program.

The Medicare Prescription Payment Plan, which goes into effect in 2025, is part of the Inflation Reduction Act's provisions aimed at lowering prescription drug and health care costs. Other provisions of the law are already in effect. On Jan. 1, the law expanded eligibility for the Low-Income Subsidy program under Medicare Part D. CMS reported nearly 300,000 with low and moderate incomes are currently enrolled in the program's expansion while 3 million people are eligible for it but not yet enrolled. As of Jan. 1, some Medicare Part D enrollees who have high drug costs will have their out-of-pocket costs capped at between $3,300 to $3,800.

CMS is seeking comments from the public on today’s draft part two guidance. The comment period is open for 30 days. Comments received by March 16, 2024, will be considered during development of the final guidance. Comments should be sent to [email protected] with the following subject line: “Medicare Prescription Payment Plan Guidance – Part Two.”

The draft part two guidance builds on the previously released draft part one guidance and fact sheet (released on August 21, 2023). Final part one guidance is forthcoming.

For the draft part two guidance, please visit: https://www.cms.gov/files/document/medicare-prescription-payment-plan-draft-part-two-guidance.pdf