1. What is the Inflation Reduction Act (IRA)?
The Inflation Reduction Act (IRA) was signed into law in 2022. It aims to help improve the Medicare program by expanding benefits, lowering drug costs, and more.
The Centers for Medicare & Medicaid Services (CMS) has made significant changes for 2025, including implementing components of the IRA that will impact Medicare beneficiaries. Changes are being rolled out over time.
For more information, visit www.cms.gov/inflation-reduction-act-and-medicare.
2. What's currently available to Medicare beneficiaries under the IRA in 2024?
- The cost of covered insulin has been lowered. Medicare patients pay no more than $35 for a one-month supply of covered Part B and Part D insulins, regardless of the drug tier it's on or coverage stage they are in.
- Part D vaccines, recommended for adults by the Advisory Committee on Immunization Practices (ACIP), have been made available at no cost to Medicare patients.
- The eligibility for a Low-Income Subsidy (LIS) or “Extra Help" has been expanded by raising the income threshold from 135 to 150 percent of the federal poverty limit.
- The Catastrophic Coverage stage for prescription drug coverage has been eliminated, capping costs at $8,000. That means Medicare patients pay nothing for covered drugs for the remainder of the year if they reach this limit.
3. What changes are effective January 1, 2025?
- Out-of-pocket drug costs will be capped at $2,000 for 2025, and the Coverage Gap will be eliminated. This means that once Medicare Part D members reach this limit, they will pay nothing for covered drugs for the remainder of the year. This cap only applies to out-of-pocket drug costs, and it includes payments made by others on a member's behalf.
- Note: The cap does not apply to drugs covered under Medicare Part B, and their monthly plan premium does not count towards the limit.
- The Medicare Prescription Payment Plan is a new payment option in 2025 that allows members with Part D prescription drug coverage to spread out the cost of their prescription drugs over the course of the year in monthly payments. The opportunity to opt in is not income-based and is completely voluntary.
4. What is the role of pharmacies in this new Medicare Prescription Payment Plan?
- The law requires Part D sponsors to notify the pharmacy when one of their Part D enrollees incurs out-of-pocket costs for covered Part D drugs that make it likely the individual may benefit from the program.
- If a Part D enrollee has cost sharing for a single covered Part D drug of $600 or more and has not already opted into the program, the Part D sponsor will be required to notify the pharmacy to inform the individual about the program.
- The pharmacy will provide the Part D enrollee with the Medicare Prescription Payment Plan Likely to Benefit Notice, a standardized notice that all Part D sponsors are required to use.
- More information is found in the CMS.gov fact sheet: Fact Sheet: Medicare Prescription Payment Plan Final Part One Guidance.
5. As a provider, what can I do to prepare or help mitigate costs for my patients/our Medicare Advantage members?
Currently, providers can:
- Write 90-day prescriptions to improve medication adherence.
- Encourage members to consider using preferred pharmacies and/or mail order to take advantage of $0 copays.
- Update prescriptions by switching members from Non-Formulary medications to formulary ones and consider lower tier/lower cost options, if available.
- Submit Prior Authorizations or request drug exceptions. Requirements should include a physician statement with details to avoid a denial.
- Visit the Prescription Drug search tool to find a pharmacy and/or formulary information.
- Enroll in our PEAR Provider portal and add the PEAR AR application.
- If you are a primary care provider, review your Part D member-specific Impact Report in PEAR AR, in Output Manager under Published Reports.
- Tell patients (our members) to contact us with questions using the number on the back of their insurance card.
- Stay abreast of news and updates on the Independence Blue Cross (IBX) Provider News Center and the Pharmacy & IRA resource page.
6. What will happen in 2025 when Medicare patients (our Medicare Advantage members) seek to fill prescriptions at a retail pharmacy?
When a prescription is filled:
Patients may experience cost share differences due to benefit changes. For example, in 2025, prescribed drugs on Tier 2 for some IBX Medicare Advantage members will have a $0 co-pay at preferred pharmacies. However, for drugs on Tier 3 or Tier 4, our Medicare Advantage members will move from a copay to co-insurance (typically 25% and 33% of drug costs, respectively) effective January 1, 2025.
At the point of sale, patients have the choice to pay the cost share amount or contact you (their provider) to consider and discuss possible lower-cost alternatives.
Optum, our contracted pharmacy benefit manager, has provided retail pharmacies with a reminder about the CMS requirement to hand out the Medicare Prescription Drug Coverage and Your Rights Standardized Pharmacy Notice to customers whose prescriptions are denied: CMS Beneficiary Notice 10147 (optum.com).
When a prescription is denied:
Please note that a prescription may be denied by a pharmacy for any of the following reasons: The drug is listed as non-formulary, requires step therapy, has quantity limits, or requires prior authorization.
Notes:
- A prescription will be denied if the pharmacy seeks to fill for an amount higher than the quantity limit (QL). However, pharmacists will be able to dispense within the QL.
- A transition fill will be dispensed for 30 days maximum; this allows some time for a physician to generate an exception.
If a prescription is denied at the pharmacy, patients will be advised to call the Plan to review their benefits. Or they may contact you (their provider) directly to discuss a possible drug alternative.
7. As a provider, how can I stay informed about Medicare Part D changes at IBX?