Earlier this year, the Centers for Medicare and Medicaid Services (CMS) finalized a rule focused on expanding access to affordable health care and improving health equity in Medicare Advantage (MA) and Part D plans. Therefore, in part, the final rule allows Part D plans additional time to prepare to shift price concessions to the member at the point of sale.
Under the final rule, the MA and Part D regulations related to marketing and communications are revised as are the criteria used to review applications for new or expanded MA and Part D plans, including compliance with MA provider network adequacy requirements. Additionally, there are changes made to quality ratings for MA and Part D plans; medical loss ratio reporting; special requirements during disasters or public emergencies; how MA organizations calculate attainment of the maximum out-of-pocket (MOOP) limit for Parts A and B services; and the use of pharmacy price concessions to reduce beneficiary out of pocket costs for prescription drugs under Part D.
This final rule also revises regulations for D-SNPs, and in some cases, other special needs plans, related to enrollee advisory committees, health risk assessments, and ways to improve integration of Medicare and Medicaid.
Pharmacy Price Concessions
CMS noted that in recent years, it has become more commonplace for Part D plans to enter into agreements with pharmacies that would allow the pharmacy to pay less money for a dispensed drug, if the pharmacy meets certain criteria. However, those negotiated prices can wind up higher than the actual negotiated payment to pharmacies, which can increase out-of-pocket spending for beneficiaries and force them to go through the benefits more quickly.
Therefore, under the final rule, starting on January 1, 2024, CMS 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 means that price concessions must be applied as received from network pharmacies to the negotiated price at the point of sale, resulting in shared savings to the beneficiaries. This is a full year delay from the proposed rule, which slated January 1, 2023, as the date of the new requirement.
CMS Administrator Chiquita Brooks-LaSure stated, “This rule improves the health care experience and affordability for millions of people with MA and Part D coverage, including dually eligible individuals, and provides needed support to populations often left behind.”
The Pharmaceutical Care Management Association (PCMA) was pleased with the decision to delay implementation, as the delay will allow Part D plans additional time to make any necessary adjustments, saying, “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.”
Other Final Rule Changes
Among other changes, the final rule also included changes to Medicare Advantage, such as new transparency requirements for supplemental benefits and a new requirement that MA plans report the amount spent on benefits beyond the scope of traditional Medicare (i.e., dental or hearing benefits).