PIRC Member Updates on CMS’ IRA Implementation

Comments due March 26, 2024

CMS has issued this ICR related because it plans to add data points to the Medicare Advantage Prescription Drug (MARx) system related to the new Part D Prescription Drug Payment Plan

Comments Due: March 1, 2024

The notice includes:

a. Costs Counted Toward True Out-of-Pocket Costs (TrOOP)

• • third party arrangements count toward TrOOP
  • IRA specifically amends the definition of incurred costs that count toward TrOOP for CY 2025 to include payments for previously  excluded supplemental benefits
  • excludes payments under the new Manufacturer Discount Program.

b. Definition of Enhanced Benefit Design

Because the Part D benefit redesign reduces available options for enhanced benefit plan design, CMS reconsidered what constitutes a permissible EA benefit design and established a process for ensuring that individuals receive value relative to the defined standard  benefit when they enroll in an EA plan.

• • For CY 2025, CMS will use the Part D Out of-Pocket Costs (OOPC) model to estimate the value of EA plans relative to the value of the defined standard benefit.

c. For 2025, beneficiary pays:

• • Annual deductible. The enrollee pays 100 percent of their gross covered prescription drug costs (GCPDC) until the deductible of $590 for CY 2025 is met.
  • Initial coverage.

• • The enrollee pays 25% coinsurance for covered Part D drugs.
  • The sponsor typically pays 65% of the cost of applicable drugs (subject to full discount program) and 75% of the cost of all other covered Part D drugs.
  • The manufacturer, through the Discount Program, typically covers 10% of the cost of applicable drugs.
  • This phase ends when the enrollee has reached the annual OOP spending threshold of $2,000 for CY 2025.

• • Catastrophic.

• • The enrollee pays no cost sharing for covered Part D drugs.
  • Sponsors typically pay 60% of the costs of all covered Part D drugs.
  • The manufacturer pays a discount, typically equal to 20% percent, for applicable drugs.
  • CMS pays a reinsurance subsidy equal to 20 percent of the costs of applicable drugs, and 40% for all other covered Part D drugs that are not applicable drugs.

1. 2. The second document is entitle “Draft Part D Benefit Redesign Program Instructions”

Comments Due:  March 1, 2024 by 6 pm

1. 3. The third document is entitled “Information Collection Request:  The Medicare Advantage and Prescription Drug Programs: Part C and Part D Medicare Advantage Prescription Drug (MARx) System Updates for the Medicare Prescription Payment Plan Program”

Feb 2 ‘24 Update

Over the last week or so, CMS put out several IRA documents, announcements and information requests. We are doing a deep dive and will report back to this group shortly with respect to impact on rare cancers/whether it’s important to comment.

In the meantime, here’s some info on what’s been released:

• Three related CMS documents now open for comment on the Part D benefit redesign, which relates to, among other things, the change in out-of-pocket (OOP) costs we’ll see in 2025.
  The first (the “Call Letter”) is the actual proposal, setting out the policy changes;
• The second (“Draft Program Instructions”) is essentially how the proposed policies will be implemented;
• The third (“Information Collection Request” (ICR)) discusses the information CMS will obtain from plans, manufacturers, etc., to implement the proposed policies.

1. The policy proposals are in a document entitled “Advance Notice of Methodological Changes for Calendar Year (CY) 2025 for Medicare Advantage (MA) Capitation Rates and Part C and Part D Payment Policies”

Jan 4 Update

CMS put out a slew of stuff on implementing the inflation rebate program in IRA on Dec. 14 before we all broke for the year. Remember this rebate program relates to the IRA requirement of companies to pay a rebate if their prices rise faster than inflation.  CMS put out one for Part B drugs (clinician administered drugs) and one for Part D (drugs dispensed at a pharmacy or through mail order).

It took us quite some time to sort through all the words – the guidance documents were relatively long, technical and directed to manufacturers.

Here are the takeaways for patients though –

• If manufacturers impose price increases on their drugs that exceed inflation, they must pay a rebate.
• The rebate for each “unit” is, in simplest terms, the amount by which the drug’s price exceeds the inflation-adjusted price calculated by CMS. Manufacturers pay the rebate on each unit covered by Medicare (Part D or Part B).
• Inflation rebates reduce patient copayments (if, for example, the rebate on a patient’s Part D prescription is $10 and the patient’s copayment is 20%,  the rebate will reduce copayment by $2.00)
• Inflation rebates will not be applied to prescriptions for Medicare Advantage participants (CMS may decide later to include MA plans)

CMS may do a rulemaking to revise or add to the policies in the guidance at a later date.  If it does, we will have an opportunity to comment.