M&D Clinical Corner: Guide to Medicare Changes for 2023 and Beyond
The Clinical Corner is a monthly feature that highlights a variety of important pharmacist topics that is written by Morris & Dickson’s staff pharmacist, Paula Belle (RPh).
This month’s Clinical Corner will provide an overview of recent changes to Medicare coverage that may affect community pharmacy practice in 2023 and beyond:
- Facts and figures
- Expected patient impacts
- Expected pharmacy impacts
- The role of the pharmacist
Facts and Figures
- 83% of American adults think the cost of prescription drugs is unreasonable.
- 29% of American adults say in the last year, they have not taken prescription medicines as directed because of costs.
- 26% of American adults say it is very difficult for them to afford to pay for their prescription drugs.
- On August 18, 2022, President Biden signed the Inflation Reduction Act (IRA).
- This act includes several provisions that may impact community pharmacy.
- The Inflation Reduction Act will provide meaningful financial relief for millions of people with Medicare by improving access to affordable treatments and strengthening the Medicare Program both now and in the long-run.
- People who have drug coverage through a Medicare Advantage plan will also benefit from this new law.
Expected Patient Impacts
Insulin Cost Sharing
- Starting January 1 2023, people enrolled in a Medicare prescription drug plan will not pay more than $35 for a month’s supply of each insulin that they take and is covered by their Medicare prescription drug plan and dispensed at a pharmacy or through a mail-order pharmacy.
- The definition of a one-month supply varies between plans.
- Part D deductibles won’t apply to the covered insulin product.
- Pharmacies should note the law allows a grace period of 90 days for Medicare Part D plans to implement the monthly maximum of $35 for insulin.
- If a plan is unable to implement the maximum beneficiary cost share provision for insulin ($35/month’s supply) during this grace period, the plan’s normal cost share will be returned on the claim and the plan is required to refund the difference to the beneficiary.
- Due to the grace period through March 31, 2023, pharmacies may receive Medicare Part D claim responses with a beneficiary cost share greater than $35.
- Pharmacies do not need to take any action on these claims.
- If a Medicare enrollee asks why the cost share is not capped at $35 for insulin, the patient can be informed that if their insulin is covered under their Medicare Part D benefit, the Medicare Part D plan will reimburse the patient the difference within 30 days.
- A three-month supply for covered insulin(s) cannot exceed a maximum beneficiary cost share amount of $105 ($35×3).
- Starting July 1, 2023, people with Traditional Medicare who take insulin through a traditional pump will not pay more than $35 for a month’s supply of insulin, and the deductible will not apply to the insulin. This will apply to people using pumps covered through the durable medical equipment benefit under Part B.
Vaccine Cost Sharing
- Starting January 1, 2023, Part D-covered adult vaccines recommended by the Advisory Committee on Immunization Practices (ACIP), including the shingles and Tetanus-Diphtheria-Whooping Cough vaccines, will be available with no deductible and no cost-sharing to people with Medicare prescription drug coverage.
- While the law allows a grace period of 90 days for Medicare Part D plans to implement the monthly maximum of $35 for insulin, the law does not include a similar grace period for Part D vaccines.
- If any ACIP-recommended vaccine is not capped at $0 for a patient who is over 18 years of age, the patient should be instructed to contact their Medicare Part D plan Help Desk.
Catastrophic Phase Of Medicare Part D Benefit
- Starting January 1, 2024, people with Medicare prescription drug coverage who fall into the catastrophic phase of the prescription drug benefit won’t have to pay any coinsurance or co-payments during that phase for covered Medicare prescription drugs.
Part D Premium Stabilization
- The law provides for a mechanism beginning January 1, 2024 for the average premium increase across most Part D plans to be limited to 6% over the previous year. This protection continues through 2029. The law also provides for a mechanism to stabilize plan premiums in 2030 and subsequent years.
Low-Income Subsidy Program
- Starting in 2024, individuals with Medicare Part D who have low incomes will benefit from expanded financial help with prescription drug cost-sharing and premiums. The low-income subsidy program (LIS or “Extra Help”) under Medicare Part D will be fully available to certain people with Medicare with limited resources who earn less than 150% of the federal poverty level.
Coinsurance For Part B Drugs
- Starting April 1, 2023, people with Traditional Medicare may pay a lower coinsurance for some Part B drugs if the drug’s price increased faster than the rate of inflation in a benchmark quarter.
Out Of Pocket Limit in Part D
- Beginning in 2025, people with Medicare Part D won’t pay more than $2,000 per year in out-of-pocket costs for covered Part D drugs (and for subsequent years, this amount will be indexed by inflation). Part D enrollees will also be able to choose to pay their out-of-pocket Part D costs in monthly amounts spread over the plan year.
Expected Pharmacy Impacts
Medicare Part D Drug Price Negotiation Program
- Medicare will be able to negotiate directly with drug manufacturers for the price of certain high-spending brand-name Medicare Part B and Part D drugs that don’t have competition.
- This means people with Medicare will pay lower cost-sharing amounts for these drugs because their cost-sharing will be based on the Medicare negotiated price.
- For pharmacies, reimbursement could be impacted under the new Medicare price negotiation framework, as any difference between the negotiated price and discounted price for a drug would be “trued-up” within prompt pay requirements.
- NCPA has secured language for the record in the House of Representatives that the Centers for Medicare & Medicaid Services (CMS) will not implement the act in a way that would cause any reduction in pharmacy reimbursement or require or permit price concessions or other remuneration from the pharmacy because of Medicare drug price negotiation.
- By September 1, 2023 CMS will announce the first 10 Medicare Part D drugs selected for the Drug Price Negotiation Program.
- The first 10 drugs selected for price negotiation will be from a list of the drugs with the highest Medicare Part D spending that don’t have any generic or biosimilar competition.
- Negotiated drug prices for this first group of 10 drugs will be effective in 2026.
- Manufacturers who don’t follow the negotiation requirements will have to pay a tax, and will have to pay penalties if they don’t fulfill other manufacturer requirements.
- Manufacturers who do not negotiate will face an excise tax, starting at 65 percent of a drug’s prior year sales, increasing by 10 percent every quarter up to 95 percent. The tax would be suspended if manufacturers choose to have their drugs no longer covered by Medicare or Medicaid.
- Additionally, manufacturers face a civil monetary penalty for not offering the negotiated price of up to 10 times the difference between the price charged and the negotiated price.
- Additional drugs selected for negotiation will be announced in 2025, 2026, 2027, 2028 and 2029.
- Under Medicare Part D and Medicare Advantage, manufacturers must provide access to pharmacies to the government-negotiated rate, i.e., the “maximum fair price,” and the pharmacy’s negotiated rate shall allow for a dispensing fee.
Cap On Part B Payment for Biosimilars
- Starting July 1, 2024, there will be a cap on the Part B payment amount for new biosimilars when average sales price data is not available.
The Role of the Community Pharmacist
- The removal of co-pays and deductibles for ACIP recommended vaccinations covered by Medicare Part D, pharmacists is effective January 1, 2023.  Pharmacists can offer vaccinations such as shingles and tetanus-diphtheria-whooping cough to Medicare Part D recipients at no cost.
- Pharmacists can access ACIP immunization guidelines at this link: https://www.cdc.gov/vaccines/hcp/acip-recs/index.html
- Pharmacists may want to utilize pharmacy management software to identify these patients.
- They may also train staff members to discuss vaccinations with eligible Medicare Part D patients and refer them to the pharmacist for assessment of gaps in vaccination.
- Effective January 1, 2023 the copay for 1 month supply of insulin for Medicare Part D patients is capped at $35.
- Pharmacists should be aware that a grace period for Medicare Part D plans to implement the lower copay exists (ends March 31, 2023).
- If a Medicare Part D plan returns a copay over $35 for a month’s supply of insulin, the pharmacy and patients do not have to take any action.
- Pharmacists should counsel any patient with an insulin copay exceeding this amount that their Medicare Part D plan is required to reimburse them the difference within 30 days.
- A 3 month supply of insulin can be dispensed and the expected copay would be $105 ($35X3).
- Pharmacists should be prepared to counsel affected patients regarding the elimination of catastrophic phase co-insurance amounts, Part D premium stabilization, and the expanded low-income subsidy program coming in 2024.
- Similarly, pharmacists can help patients understand the changes coming in 2025 to out-of-pocket limits ($2,000) for Part D drugs and having the ability to spread the out-of-pocket Part D drug costs out in monthly amounts over the plan year.
- Pharmacists can continue to assist Medicare Part D patients as they continue to review and compare their health and drug plan options during Open Enrollment, which runs from October 15 until December 7 every year.
- Medicare Part D patients should choose the plan that best meets their needs and budget.
Paula Belle (BS Pharmacy, RPh) has been the Clinical Programs Coordinator for Morris & Dickson since 2016. Prior to joining M&D, Paula held the positions of Clinical Pharmacist with Pharmacea Services and PharmMD/Adhere Health, as well as Market Pharmacist, Store Pharmacy Manager and District Pharmacy Supervisor with Walgreens. She holds a BS in Pharmacy from the University of Louisiana at Monroe, as well as Immunization and MTM Certifications from the American Pharmacists Association (APhA).
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- Kaiser Family Foundation. Public Opinion on Prescription Drugs and Their Prices. 2022 2022-10-20 [cited 2023 February]; Available from: https://www.kff.org/health-costs/poll-finding/public-opinion-on-prescription-drugs-and-their-prices/.
- Yarmuth, J.A., Text – H.R.5376 – 117th Congress (2021-2022): Inflation Reduction Act of 2022. 2022.
- National Community Pharmacists Association. NCPA Member Summary of the Inflation Reduction Act. 2022 [cited 2023 February]; Available from: https://ncpa.org/sites/default/files/2022-08/ncpa-member-summary-inflation-reduction.pdf.
- Centers for Medicare and Medicaid Services. Reduced Drug Prices, Enhanced Medicare Benefits Under the Inflation Reduction Act Frequently Asked Questions (FAQ). 2022 [cited 2023 January 31]; Available from: https://www.cms.gov/files/document/10522-external-faqs-about-inflation-reduction-act.pdf.
- Centers for Medicare and Medicaid Services. Inflation Reduction Act: CMS Implementation Timeline. 2022 [cited 2023 January]; Available from: https://www.cms.gov/files/document/10522-inflation-reduction-act-timeline.pdf.
- National Council for Prescription Drug Programs. Implementing the Cost Sharing Maximums Established by the Inflation Reduction Act for Covered Insulin Products and ACIP-Recommended Vaccines for Contract Year 2023. 2022 [cited 2023 January]; Available from: https://ncpdp.org/NCPDP/media/pdf/UploadLinks/Implementing-the-Cost-Sharing-Maximums-Established-by-the-Inflation-Reduction-Act-for-Covered-Insulin-Products-and-ACIP-120822.pdf.