With the legislation to lower drug costs stalled in Congress and its fate uncertain, last week the Biden Administration took action that it hopes will lower drug costs for many seniors.
Under a final rule issued last Friday, seniors enrolled in Medicare Advantage plans and Medicare Part D prescription drug plans can expect improved transparency and lower out-of-pocket costs for medications by requiring Medicare prescription drug plans to pass certain savings on to customers.
More Medicare Part D drug plans are entering “price concession” arrangements in which they pay reduced costs to some pharmacies for certain dispensed drugs. But these arrangements are not publicly disclosed, and the drug plans do not pass the savings along to Medicare patients who purchase the drugs.
The new rule requires Part D plans to give all price reductions they receive from network pharmacies to the person buying the drug, which should reduce the out-of-pocket cost charged to the customer. The policy will take effect on Jan. 1, 2024.
The delay in the starting date of the new rule is to give the Part D plans time to adjust their pharmacy contracting and avoid any possible disruptions.
However, the insurance companies that offer the Part D plans are not happy. They say that only pharmacists will benefit from this requirement, with seniors and taxpayers paying the price through higher premiums.
The final rule also requires, among other things, private Medicare Advantage plans to streamline the grievance and appeals processes in certain cases for those who are “dual-eligibles,” who are seniors who qualify for both Medicare and Medicaid. The rule makes a change in Medicare Advantage plans’ co-payment rules that would result in more equitable payments to health-care providers who serve dual-eligibles.
The rule also includes a new maximum out-of-pocket policy for dual-eligible beneficiaries for Medicare Part A hospital services and for Part B outpatient services.