08/24/2023

CMS Issues Draft Guidance on New Program to Allow People with Medicare to Pay Out-of-Pocket Prescription Drug Costs in Monthly Payments

President Biden’s prescription drug law, the Inflation Reduction Act, gives people with Medicare prescription drug coverage (Medicare Part D) the option to pay out-of-pocket costs in monthly payments spread out over the year beginning in 2025. This week, the Centers for Medicare & Medicaid Services (CMS) released draft guidance for comment that outlines the requirements and procedures for certain aspects of the new Medicare Prescription Payment Plan. By enabling seniors and people with disabilities with Medicare Part D coverage to spread out cost sharing over the year, the program could reduce the burden of high upfront out-of-pocket prescription drug costs.

This week’s draft guidance focuses on helping Medicare Part D plan sponsors and pharmacies prepare for the new program and build the necessary infrastructure for successful implementation. The draft guidance provides information on topics such as identifying Medicare Part D enrollees likely to benefit from the program, the opt-in process for Part D enrollees, program participant protections, and the data collection needed to evaluate the program. 

Given the size of the new program, CMS is releasing the guidance in two parts, starting with the guidance released today. Additional draft guidance will be released for comment in early 2024. The second part of the guidance will focus on Medicare Part D enrollee outreach and education, Medicare Part D plan bid information, and monitoring and compliance. CMS also intends to develop tools, such as calculators, to help people with Medicare Part D and their caregivers learn what monthly payments may look like under the new program.

CMS is seeking comments from the public on the draft guidance. The comment period is open for 30 days, and comments received by September 20, 2023, will be considered during development of the final guidance. CMS anticipates issuing final part one guidance in early 2024.

For a fact sheet on the Medicare Prescription Payment Plan, please click here.

For an implementation timeline for the Medicare Prescription Payment Plan, please click here.

For the draft guidance, please click here.