On January 1, 2025, Medicare plans will be offering a new payment plan that allows enrollees to split their out-of-pocket (OOP) drug costs into monthly payments over a year. The Medicare Prescription Payment Plan (M3P) was created in section 11202 of the Inflation Reduction Act (IRA). Finalized part one guidance was released August 23, 2023 and described many of the mechanics and calculations associated with the M3P. PHSL provided an overview of the part one guidance in a previous issue of ComputerTalk for the Pharmacist. On July 16, 2024, CMS released the finalized part two guidance, which covers Part D plan sponsor obligations regarding education, outreach communications, and operational requirements. This program will not only change the responsibilities of Part D plan sponsors, but also of the pharmacies that dispense their medications. The implications of the M3P program are immense, with both the plan sponsors and pharmacies taking on additional administrative work.
When a Part D enrollee’s OOP drug costs for a single prescription exceed $600, they are likely to benefit from joining the M3P program. Sponsors are responsible for alerting the pharmacy when an enrollee is likely to benefit from joining M3P. Once contacted, pharmacies take on the requirement to provide the CMS-developed Likely to Benefit (LTB) Notice to the enrollee. To accommodate the growing population of Spanish speaking individuals, CMS has also provided a Spanish version of the LTB notice. The delivery of this notice changes depending on the setting of the pharmacy. If the pharmacy has face-to-face interactions with the patient, like retail pharmacies, they must provide a physical notice at the time of prescription pick up. However, if the pharmacy does not have a face-to-face interaction, like in mail order pharmacies, they must deliver immediate notice in the patient’s preferred mode of contact. This can include physical notice through the mail, verbal notice on a telephone call, or even electronically though a notification system. Long-term care (LTC) pharmacies have their own rules for delivering notices. Similar to the pharmacies with no direct patient contact, LTC pharmacies must contact the enrollee or their representative through their preferred method of contact. Due to the common use of retrospective billing in LTC, CMS has ruled that they are able to deliver the notice at the time of billing for cost-sharing, even if it is after the medication has been dispensed.
CMS recognized that this will cause readjudication of many prescriptions, with reversals and resubmissions likely. In response to this potential increase, CMS added guidance on who is responsible for readjudication processes. If an enrollee chooses to opt into the M3P program, their plan sponsor must notify the pharmacy. Billing processes will be completed with an additional, separate bank identifier number (BIN) and processor control number (PCN) that is applied as a secondary insurance after the initial Part D coverage. These new billing numbers will likely be displayed in the messaging from the plan sponsor that notifies the pharmacy that an enrollee has opted into the program. When a Part D enrollee joins the M3P program, the pharmacy is required to readjudicate the prescription that triggered the LTB Notice only if the patient has not yet paid their copay/coinsurance at the pharmacy POS. The pharmacy must also readjudicate any unpaid claims as requested by the enrollee. However, after a claim has been paid for at the pharmacy POS, all readjudication must be done through the plan sponsor. This includes the prescription that triggered the LTB notice if it was picked up at full OOP price due to an urgent need for the medication. This splitting of readjudication responsibilities benefits both the pharmacy and the plan sponsors, as they are able to divide the workload in a way that functions well for both parties.
Another positive piece of guidance for pharmacies is the clear statement from CMS about enrollee education. Pharmacies are not responsible for any education or counseling past providing an enrollee the LTB notice. The pharmacies must have both the English and Spanish versions of the notice readily available to enrollees. If patients have more questions about the notice or M3P program, they are to be directed to their plan sponsors, although it is recommended that pharmacies know the basics of this program and their requirements.
Part D sponsors will be taking on a large financial responsibility and risk with this program, which could include increasing support staff, updating routine documents, sending these materials out to their enrollees, and risking nonpayment from the program members. In addition to this, they are unable to count the plan losses from nonpayment as patient care costs in their medical loss ratio (MLR) calculations. This undertaking means that sponsors will likely be looking for ways to maintain revenue, including through DIR fees. While there are no updates currently from PQA or other quality organizations, it is logical to conclude that there is a possibility of additional quality measure development in the future. This is due to the limitations of CMS regarding negotiations and contracts between pharmacies and plan sponsors. Pharmacy owners should be on the lookout for the development of new performance measures in coming plan years.
Another impact of M3P is the need for standard messaging. The National Council for Prescription Drug Programs (NCPDP) is currently developing standard messaging codes for this program. There is no official expected release date for the codes, but they have been in development for quite some time. With four more months in 2024, there is hope that the standard codes will be released before the 1/1/2025 effective date of the M3P program.
Pharmacies should prepare for this program by having the CMS-developed LTB notices in both English and Spanish readily available for use. Education of the pharmacy staff about requirements and procedures will be crucial for effective implementation of the M3P program. For more information about the M3P plan, visit the CMS Fact Sheets on their website at: Medicare Prescription Payment Plan | CMS.
Summer 2024 Newsletter: