May 5, 2011— The Centers for Medicare and Medicaid Services (CMS) has updated its regulations for the Medicare Advantage and Medicare Prescription Drug Benefit Programs for contact year 2012.
The final rule implements many provisions of the Affordable Care Act, such as closing the Part D “donut hole” for Medicare beneficiaries. Under the rule, beginning this year beneficiaries who reach the coverage gap will be responsible for paying a smaller and smaller share of their drugs’ costs until their share reaches 25 percent in 2020. Reductions in cost sharing are being phased in at different rates for generic and brand-name drugs.
In addition, this new rule makes clear that Medicare beneficiaries may be required to pay the full cost of vaccine administration fees, which are excluded from the co-pay reductions. Dispensing fees had already been excluded from the co-pay reductions.
The final rule also makes changes to Part D plans’ medication therapy management programs, delays by one year short-cycle dispensing in long-term care facilities, strengthens certain beneficiary protections, limits cost-sharing under Medicare Advantage plans for administration of chemotherapy and other services, and grants CMS greater authority with respect to adding and removing Medicare Advantage plans.
Some manufacturers have observed that subsidizing the Part D donut hole creates a duplicate discount problem when beneficiaries receive 340B drugs in the coverage gap. To address this problem, the companies advocate that their obligation to provide the subsidies be waived or reduced when 340B drugs are involved. This issue, however, was not addressed in the regulation.