Comments are due by March 3, 2023. The final notice will be released by April 3, 2023.
The Inflation Reduction Act (IRA) of 2022 provides many provisions to reduce prescription drug costs for Medicare beneficiaries and Medicare Advantage (MA) members. The CMS CY 2024 Advance Notice included updates related to the IRA that should be addressed in early 2023. Specifically, plans must consider the effective dates of additional IRA changes: April 1, 2023, for Part B Rebatable Drug Coinsurance Adjustment and July 1, 2023, for Part B Insulin Cost Sharing Cap. Timeframes related to these effective dates include:
- CMS allows plans until the end of March 2023 to update their systems to reflect the change for Part B rebatable drugs; however, members who were charged more than $35 for a 30-day supply of insulin covered by Part D must be reimbursed within 30 days of purchase.
- Beginning April 1, 2023, the MA enrollee cost sharing for a Part B rebatable drug must not exceed the coinsurance amount of the original Medicare adjusted beneficiary coinsurance for that Part B rebatable drug. Part B rebatable drugs may be in either of the categories “Chemotherapy administration services to include chemotherapy/radiation drugs” or “Other drugs covered under Part B of original Medicare” listed in § 422.100(j)(1)(i).
- While the monthly cap on insulin cost sharing in Medicare took effect January 1, 2023, for insulin covered under Part D, for insulin covered under Part B, this coverage is effective July 1, 2023.
- Effective July 1, 2023, Medicare Part B beneficiaries or those enrolled in an MA plan who use an insulin pump furnished via durable medical equipment will no longer have to pay a deductible for insulin and will have a copayment cap of $35 per month supply for their Part B covered insulin.
CMS CY 2024 Advanced Notice Impact on Member Communications
CMS requires that notification is provided to all current members when there is a mid-year change in benefits, plan rules, and formulary. This Member Communications notification must be provided 30 days in advance of the effective date of the change. Furthermore, for potential and new members, plan documents and any other materials containing benefits must be accurate.
Accordingly, notices related to the change in benefits will need to be provided at least 30 days prior to the effective date. To meet the mid-year change notice requirements, plans must provide notices by March 1, 2023, for the Part B Rebatable Drug Coinsurance Amount change effective April 1, 2023, and by June 1, 2023, for the Part B insulin cost-sharing cap effective July 1, 2023. On the February 8, 2023, Part C & D User Call, CMS responded to plan questions regarding the use of member newsletters to notify members, indicating that this was an acceptable means of notification; however, if this method is selected, the newsletter must be issued and received by all members. Additionally, the newsletter must be prominently placed on the plan website, preferably on the front landing page.
Additionally, member communications (e.g., Evidence of Coverage (EOC), Summary of Benefit (SB), materials used for marketing) that contain benefit information should be reviewed for accuracy and any inaccuracies addressed to ensure that accurate documents are provided to potential and new enrollees. On the recent Part C & D User Call, CMS stated they will not release updated 2023 models. The CY 2024 Annual Notice of Change (ANOC) and EOC draft models were open for comment and released in the Federal Register notice on December 15, 2022, under PRA CMS-10260. These models include updated language to address these benefits. While no HPMS memo was issued for these updated models on the User Call, CMS suggested that plans may use this proposed language in the required notices for Part B insulin and Part B Rebatable drug coinsurance changes.
Further, CMS stated plans can use errata or addendums to provide applicable notice to potential or members of the changes. CMS instructed plans that the current CY 2023 ANOC, EOC, or SB do not need to be updated when an errata or addendum is created. When these documents are sent out, the errata or addendum should be included in mailings and on the websites. The errata or addendum are still required to be submitted in the HPMS Marketing Module. These changes are very fluid and get clearer daily. CMS stated they will be “flexible” this year and not require that the model documents be updated.
Finally, the IRA also requires that effective for plan years beginning on or after January 1, 2023, the deductible will not apply to covered insulin products, and cost-sharing for a one-month supply of each covered insulin product must not exceed $35 for all enrollees in all coverage phases. CMS noted there is no change to the existing formulary requirements under § 423.120(b) regarding formulary review and approval for insulin products.
CY 2024 Summary
Looking ahead to CY 2024, here is a summary of changes to come:
- Deductible Stage. Starting CY 2024, Part D plans must not apply a deductible to any Part D- covered insulin product.
- Initial Coverage Stage. No more than $35 for a one-month supply of a covered insulin product in the initial coverage phase.
- Catastrophic Coverage Stage. For CY 2024, cost-sharing for Part D drugs will be eliminated for members in the catastrophic phase of coverage. Previously members either had a 5% coinsurance or a copay for generics and other drugs.
- Vaccines. For CY 2024, covered vaccines will not have any deductible or cost-sharing for any adult vaccine recommended by the Advisory Committee on Immunization Practices (ACIP).
- Low-Income Subsidy. Beginning in CY 2024, the Low-Income Subsidy program (LIS) under Part D will also be expanded. Beneficiaries who earn between 135 and 150 percent of the federal poverty level and meet statutory resource limit requirements will receive the full LIS subsidies.
What Should Plans Do Next?
As with any new requirements, plans should review the upcoming changes and the impact on member communications closely. Clearly identify required member communications for current, new and prospective members that may need revision and establish distribution methods and dates that will comply with the requirements. Incorporate required actions and due dates into your annual project plan that clearly establish accountable parties and timelines that provide sufficient time for internal review and approval.
We’re Here to Help
For additional support, CODY’s team of experts can help your plan prepare for these CY 2024 changes in 2023 and move quickly to prepare member notices and start developing your 2024 model documents. To learn more, contact us today for a consultation.
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