Buy now, pay later? CMS issues new monthly payment plan for prescription drugs
The Biden administration released draft guidance on a new program that allows Medicare prescription drug plan enrollees to pay out-of-pocket drug costs in monthly installments beginning in 2025.
People with Medicare Part D prescription drug coverage will have the option of paying out-of-pocket costs through monthly payments beginning in 2025. The Centers for Medicare & Medicaid Services on Monday released draft guidance for comment that outlines the requirements and procedures for certain aspects of the new Medicare Prescription Payment Plan.
“For people with Medicare Part D who face high costs early in the year, today’s announcement will ease the burden of out-of-pocket prescription drug costs,” said Xavier Becerra, secretary of the U.S. Department of Health and Human Services. “This is one more example of how the president’s prescription drug bill is reducing costs and increasing access to life-saving medicines for our Medicare beneficiaries.”
The program mandates that Medicare Part D plan sponsors offer beneficiaries the option to pay their out-of-pocket costs for prescription drugs monthly over a year instead of at the point of sale. Part D sponsors must pay the pharmacy the out-of-pocket cost-sharing that beneficiaries would have paid if they were not in the program. Sponsors then will bill beneficiaries monthly for the cost-sharing.
Although the program is available to all Medicare Part D beneficiaries, CMS said that those incurring high out-of-pocket costs earlier in the plan year are more likely to benefit. The agency will develop tools to help beneficiaries decide if the program will be helpful. Although the program will not reduce overall out-of-pocket costs, spreading the costs throughout the year can help ease some cost-sharing burden, CMS said. Additionally, beneficiaries will owe nothing upfront when picking up medication at the pharmacy.
“People with Medicare are already feeling the benefits of the prescription drug law, such as free recommended vaccines and lower costs for insulin,” CMS Administrator Chiquita Brooks-LaSure said. “The draft guidance CMS is releasing today is an important step in standing up a new program that will help certain people with Medicare prescription drug coverage who have high upfront drug costs.”
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This is the first of two parts of draft guidance. Part one guidance includes program calculations for the monthly payment amounts, instructions for Part D sponsors on handling monthly billing, requirements on reimbursing pharmacies for Part D sponsors and proposed thresholds for identifying Part D beneficiaries who likely will benefit from the program. The second part of the guidance will be released in early 2024. It will focus on Medicare Part D beneficiary outreach and education, Medicare Part D plan bid information and monitoring and compliance.
CMS is seeking input from the public. The comment period is open for 30 days, and comments received by September 20 will be considered during development of the final guidance.