CMS is giving a Part D plans a little extra time to prepare to funnel price concessions to the member at the point of sale.
The Centers for Medicare & Medicaid Services on Friday finalized a rule with the price concession changes as well as a slew of updates for Medicare Advantage plans.
The agency said in a fact sheet on the regulation that beginning Jan. 1, 2024, it will define the negotiated price for a drug in Part D as the baseline, or lowest possible, payment to a pharmacy to ensure that price concessions are felt at the point of sale by beneficiaries.
"This policy reduces beneficiary out-of-pocket costs and improves price transparency and market competition in the Part D program," CMS said.
CMS said that negotiated prices can end up higher than the negotiated payment to pharmacies, driving up out-of-pocket spending for beneficiaries and forcing them to progress more quickly through the benefit.
In the proposed version of the rule, CMS aimed to roll out the new requirement on Jan. 1, 2023.
The Pharmaceutical Care Management Association, which represents pharmacy benefit managers, praised the agency's decision to delay the changes by a year, as it allows Part D plans more time to make necessary adjustments.
"This extra year will help to reduce disruptions to Medicare beneficiaries by allowing Part D plans time to adjust their pay-for-performance pharmacy contracting," PCMA said. "In addition, the delay appropriately prevents premiums from increasing in 2023 on top of rising inflation."
The final rule also includes notable changes to Medicare Advantage, such as new transparency requirements related to supplemental benefits. MA plans must report the amount spent on benefits beyond the scope of traditional Medicare, such as dental and hearing benefits.
These additional options are a key tool Medicare Advantage plans use to attract members.
“Fiscal stewardship is a central principle of the work we do every day,” said CMS Deputy Administrator and Director of the Center for Medicare Meena Seshamani, M.D., in a statement. “As responsible stewards of the program, this rule enables us to learn more about how the Medicare dollar is being spent on certain Medicare Advantage benefits such as housing, food and transportation assistance in order to better understand how we can most effectively support the health and social needs of people with Medicare.”
The agency is also rolling out more stringent requirements for network adequacy in the rule. CMS will require that MA applicants demonstrate a "sufficient" network of providers before it approves applications for new or expanded Medicare Advantage contracts.
MA plans will also be provided with network adequacy reports ahead of bid submissions in order to avoid last-minute changes that could compromise bid integrity, CMS said.
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