Draft Guidance for Medicare Prescription Payment Plans

The Centers for Medicare & Medicaid Services (CMS) is voluntarily soliciting comment on the second part of its recent draft guidance. Here is what the guidance requires:

Under the Medicare Act, specifically Section 1860D–2(b)(2)(E)(v)(III) (bb) and (cc), Part D sponsors are mandated to inform both prospective and current Part D enrollees about the Medicare Prescription Payment Plan. This is done through promotional and educational materials, emphasizing the importance of outreach and education to ensure that enrollees are well-informed about the program.

CMS requires that plans incorporate information about this program into the standard Part D materials (§ 423.2267(e)), which must also comply with the 42 CFR Part 423, subpart V regulations. These regulations outline the standards for required materials, content, and delivery.

Additionally, the Medicare Communications and Marketing Guidelines (MCMG) offer further guidance on marketing materials, including submission processes and compliance checks.

For 2025, Part D sponsors are required to include information on the Medicare Prescription Payment Plan and an election request form, with the membership ID card issued to new enrollees. This must be done within 10 days of CMS enrollment confirmation, or by the last day of the preceding month of the plan’s start date, as per § 423.2267(e)(32). While sponsors can develop alternative informational materials, these must accurately represent program details and adhere to Part D regulations.

The Evidence of Coverage (EOC), as mandated by § 423.2267(e)(1), is a comprehensive document provided annually to Part D enrollees by Oct. 15, detailing plan benefits, rights, and rules. It is being updated to include information about the Medicare Prescription Payment Plan, reflecting its relevance to the plan’s coverage and cost-sharing responsibilities. The updated model EOC is set to be released in spring 2024 as part of the 2025 Model Materials.

The Annual Notice of Change (ANOC), required under § 423.2267(e)(3), is another crucial document that outlines upcoming changes in plan costs, coverage, and benefits, effective Jan. 1 of the following year. This document, which helps enrollees decide whether to stay with their current plan or choose a new one, will now include information about the Medicare Prescription Payment Plan. The updated model ANOC will also be released in spring 2024 as part of the 2025 Model Materials.

Lastly, the Explanation of Benefits (EOB) is a document that Part D sponsors must provide to enrollees, detailing their prescription drug costs in relation to the Part D deductible, coverage limit, and annual out-of-pocket threshold, as required by section 1860D-4(a)(4) of the Act. This document, which must be easily understandable and provided monthly when benefits are used, will continue to serve its purpose of informing enrollees about their costs and benefits. Please send comments pertaining to this draft guidance to PartDPaymentPolicy@cms.hhs.gov with the subject line “Medicare Prescription Payment Plan Guidance – Part Two.”