The Centers for Medicare and Medicaid Services (CMS) announced a new five-year (CY 2020-2024) payment model to address the high list price of drugs covered by Medicare Part D and to “modernize” payment options for patients and providers.
The Part D Payment Modernization Model began in January 2020. Its main goal is to test how changes in Part D benefit design and incentives would affect overall Part D prescription drug spending and beneficiary out-of-pocket costs. This modernization would include new incentives to choose drugs with lower list prices, performance-based payments for plans, and the option to waive a higher de minimis amount than in the program (dependent on income and Part D plan eligibility).
Specifically in 2022, CMS plans to offer:
- Part D rewards and incentives programs;
- Medication Therapy Management+ (MTM+) Programs;
- Flexibility to lower costs for beneficiaries through limited initial days’ supply and cost-sharing smoothing;
- Cutting or removing cost-sharing on generic drugs and biosimilars for Low-Income Subsidy (LIS) beneficiaries (allowed for basic and enhanced alternative plan types); or
- Plan timeliness for standard initial coverage determinations.
Although this new payment structure will be optional for plans, patients, and providers, it is a hope that this new structure will be used to improve overall Part D prescription drug spending and beneficiary out-of-pocket costs and also increase patient understanding of their Part D benefits and clinically equivalent therapeutic options.
Eventually, this Model will allow CMS to evaluate the impact on cost and quality for Medicare beneficiaries. The Model aims to promote a decrease in total Part D program spending in these two ways:
- Creating new incentives for plans, patients, and providers to choose drugs with lower list prices.
- Providing several programmatic flexibilities to make sure people with Medicare keep affordable access to the prescription drugs that they need.
Concerned about how this model will impact formulary or government placement? Wondering how this new payment Model will affect your reimbursement? Email us at info@girsinc.com or call us at 901-834-9119 for clarification and assistance.
Disclaimer: The information in this blog is based on payer information which is dynamic. It is accurate at the time of posting but should not be construed to be reimbursement or legal advice. CPT® is the trademark of the American Medical Association (AMA).
Sources:
Part D Payment Modernization Model
About GIRS
For more than 17 years, GIRS has been assisting medical technology manufacturers with their market uptake and reimbursement strategies so that patients can have access to the care that they need. To implement successful market access strategies, the GIRS Value Discovery Landscape Assessments® team and the Payer Advocacy Compass® team work together to develop and implement foundation reimbursement landscape and payer advocacy strategies to obtain positive coverage, appropriate payment, and innovative payer contracting arrangements to improve market uptake. For more information, email us at info@girsinc.com or call us at 901-834-9119.