CMS must flesh out plan to ease out-of-pocket drug costs, report says

out-of-pocket smoothing

Provisions in the Inflation Reduction Act (IRA) make it easier for people covered by Medicare Part D to pay for medicine, but continued government oversight is necessary to make sure private insurers, pharmacies, and pharmaceutical benefit managers (PBMs) deliver patients all the help the law intended, according to an Avalere Insight report published today.

Although the IRA brought with it harmful drug price controls, the law also includes helpful measures to limit patients’ out-of-pocket (OOP) spending for medications, including a spending cap of $2,000 per patient per year for those whose drug purchases are covered under Medicare Part D. Another provision to help patients afford medications is called “OOP smoothing”: It is scheduled to begin in 2025 and would allow patients with Medicare Part D coverage to “smooth” their spending on medicines by spreading out the payments over the course of a year.

But, according to the Avalere Insight report, federal oversight will be required to make sure patients are able to access this help with drug payments.

“Implementation of the OOP smoothing program under the Inflation Reduction Act (IRA) will require additional clarity from the Centers for Medicare & Medicaid Services (CMS) on elements that will affect beneficiary experience, access, and overall sustainability of the smoothing program,” says the report from Avalere.

In particular, the report says, there may need to be oversight of pharmacies, as well as private Medicare Part D insurance plans and their contracted PBMs—bodies that negotiate the prices insurers, and patients, will pay for drugs.

Fortunately. there is still time for intervening in the process and submitting comments to CMS regarding the issues raised by the report, and any other concerns.

Where more clarity is needed, according to the report

Based on Avalere’s analysis, some of the areas that CMS may address to ensure good implementation of the OOP smoothing provision include the following:

  • Outreach to inform beneficiaries of the smoothing option. This could include specific instructions for private Medicare Part D plans so that they inform beneficiaries in promotional materials and in notices of renewal, using plain, uniform language.
  • Measures to ease patient enrollment, including possibly making re-enrollment in the smoothing program automatic, so that beneficiaries don’t have to go through the trouble of changing the details of their plan.
  • Clarification on procedures around disenrollment or beneficiary failure to pay. Policymakers may implement a reasonable grace period for someone to make up for a missed payment, as well as providing detail on how long a beneficiary is precluded.
  • Program architecture should be well designed, so that the process of obtaining and calculating payments is not overly burdensome for pharmacies and Part D plans.
  • Policymakers may look to standardize claims processes for OOP smoothing, in order to simplify the new administrative burdens faced by pharmacies and Part D plans and associated PBMs.

Opportunity for stakeholder engagement

CMS could address these concerns following their stakeholder engagement and official comment period, taking place before the IRA provisions are set to be implemented in 2025. CMS is currently undertaking stakeholder engagement and, depending on the speed of the process, they are likely to open a formal comment period around the end of 2023 and beginning of 2024, according to the Avalere Insights report.

Stakeholders, such as patient advocacy groups, can accomplish a great deal by addressing the CMS, according to members of a panel at the BIO Patient and Health Advocacy Summit. “There is an enormous opportunity for the patient advocacy community to influence all of the CMS decisions by focusing the same degree of attention and advocacy that is applied to the Hill and translating it into the regulatory environment,” Jennifer Young of Tarplin, Downs & Young told the panel. “You have to remain ever vigilant. You might have achieved important victories in the congressional battle, but the ultimate war gets decided by people who can work in their own silos and make their own decisions.”

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