On August 21, 2023, CMS issued the first of two draft guidance documents for implementing the Medicare Prescription Payment Plan that was established by section 11202 of the Inflation Reduction Act (IRA) and signed into law on August 16, 2022. Beginning in 2025, the Medicare Prescription Payment Plan requires all Medicare prescription drug plans to offer Part D enrollees the option to pay out-of-pocket prescription drug costs in monthly payments over the course of the plan year, rather than paying all at once at the pharmacy. CMS is soliciting comments on the draft guidance and will finalize the guidance by spring 2024.

The Medicare Prescription Payment Plan requires the Part D sponsor to pay the pharmacy the out-of-pocket cost sharing amount that the program participants would have paid if they were not in the program, and then bill the program participants monthly for any out-of-pocket cost sharing they incurred while in the program. The draft guidance proposes requirements related to certain topics for implementing the Medicare Prescription Payment Plan, including:

• Program calculations for the monthly payment amounts;
• Instructions for Part D sponsors on handling monthly billing, including specific information that must be included in the monthly bill;
• Requirements for Part D sponsors to promptly reimburse pharmacies the cost-sharing amount that would otherwise have been collected from Medicare Prescription Payment Plan participants;
• A proposal for discussing the claims processing workflow and a process for claims adjudication under the program;
• Proposed thresholds for identifying Part D enrollees who are likely to benefit from the program and Part D sponsor requirements for notifying these individuals through the pharmacy about the program;
• A discussion on the program’s interaction with the Part D Low-Income Subsidy (LIS) program and solicitation of comments on how to ensure appropriate outreach and education to enrollees who may be eligible for low-income assistance programs;
• Requirements related to Part D enrollee election into the program;
• Procedures for terminating Medicare Prescription Payment Plan participation, reinstatement after a prior termination, and preclusion from future participation in the program for failure to pay the monthly bills;
• Participant protections under the program, including notice and grace period requirements if a monthly bill has not been paid on time;
• Participant dispute resolution process requirements; and
• Data submission requirements.

CMS is soliciting comments on this draft part one guidance and will consider comments received by September 20, 2023. CMS will issue a draft part two guidance by early 2024 and will follow the same procedures for comment solicitation before finalizing the additional guidance in spring or early summer 2024.

The CMS fact sheet on the Medicare Prescription Payment Plan is available here. The draft guidance is available here.