The Biden administration released 2 sets of guidance documents for pharmaceutical manufacturers about how it plans to implement the new Medicare Prescription Drug Inflation Rebate Program as required under the Inflation Reduction Act, and said some beneficiaries could see lower coinsurance for some Part B drugs as soon as April 1.
CMS Thursday released draft guidance about how it will calculate drug inflation rebates in Medicare Part B and Part D as required under the Inflation Reduction Act (IRA).
Drug companies will pay rebates to the Medicare Trust Fund when their prescription drug prices increase faster than the rate of inflation for certain drugs. The guidance documents, for the implementation of the new Medicare Prescription Drug Inflation Rebate Program, seek comment on the steps CMS has outlined for drugs covered under Part B and Part D.
On a call announcing the plans, officials touted the savings impact for Medicare beneficiaries, and sidestepped questions about whether or how the guidance addresses issues raised by a report released earlier this week by the Office of the Inspector General of HHS, which discussed the challenges and possible solutions to implementing the rebates for Part B drugs.
The technical assistance report cited 3 main challenges, namely: identifying the drug products subject to Part B rebates; identifying the units on claim forms that indicate which are subject to Medicaid drug rebates, such as for dual enrollees, or for units already subject to 340B drug discounts; and oversight of the new modifiers that will be added to claims with 340B-purchased drugs starting in January 2024.
CMS officials—Administrator Chiquita Brooks-LaSure and Meena Seshamani, MD, PhD, CMS deputy administrator and director of the Center for Medicare—said the guidance documents are open for public feedback until March 11. Some of the topics CMS said it is seeking comment on include the process to determine the number of drug units for drugs that are deemed subject to the rebates; determining the reduction of rebate amounts if drugs go into shortage or have severe supply chain disruptions; ensuring the accuracy of the rebate payments; and the process to impose civil monetary penalties on manufacturers of Part D drugs that fail to pay rebates.
Manufacturers that fail to pay the rebate will face a penalty equaling 125% of the rebate amount.
Under the timeline, the first 12-month period for which drug manufacturers will be required to pay rebates for certain Part D drugs began October 1, 2022.
The first quarter under which rebate rules would kick in for certain Part B drugs is January 1, 2023, and when the first quarter ends, individuals with fee-for-service Medicare and Medicare Advantage may see a lower Part B coinsurance beginning April 1.
For Part D drugs, however, the impact on consumers may vary depending on the amount of the co-payments they have with these privately run prescription drug plans.
In 2025, CMS will send pharmaceutical manufacturers first invoices for the rebates.
“Requiring rebates for price increases above inflation for drugs already on the market will not only discourage runaway price increases, but may also help reduce future growth in prescription drug spending,” said Seshamani.
Public Hospitals More Likely to Extend Unprofitable Services After 340B Participation, Study Finds
May 10th 2024Public hospitals were significantly more likely to sustain access to unprofitable services following 340B Drug Pricing Program participation, while nonprofit hospitals were mostly unaffected, according to a recent study.
Read More
Frameworks for Advancing Health Equity: Urban Health Outreach
May 9th 2024In the series debut episode of "Frameworks for Advancing Health Equity," Mary Sligh, CRNP, and Chelsea Chappars, of Allegheny Health Network, explain how the Urban Health Outreach program aims to improve health equity for individuals experiencing homelessness.
Listen
Research Shows Prior Authorization Denials Delay Critical Immunology Care
May 10th 2024Results featured at the Academy of Managed Care Pharmacy 2024 annual meeting revealed a pattern of prior authorization rejections that could delay necessary therapeutic treatments for various patient groups.
Read More
CMS Medicare Final Rule: Advancing Benefits, Competition, and Consumer Protection
May 7th 2024On this episode of Managed Care Cast, we're talking with Karen Iapoce, senior director of government products and programs at ZeOmega, about the recent CMS final rule on Medicare Part D and Medicare Advantage.
Listen
Looking Back on ISPOR 2024: Hot Policy Topics, Welcome Focus on Employers, and More
May 10th 2024Kimberly Westrich, MA, chief strategy officer of the National Pharmaceutical Council, reflects on the most valuable learnings from the 2024 meeting of ISPOR—The Professional Society for Health Economics and Outcomes Research, including lively discussions of the Inflation Reduction Act and workshops on value assessment.
Read More