The Centers for Medicare & Medicaid Services (CMS) finalized CMS-4208-F on April 4, 2025 and the final rule is published in the Federal Register on April 15, 2025. The final rule applies to Medicare Advantage (MA, Part C) program, Medicare Prescription Drug Benefit (PDP, Part D) program, Medicare Cost Plans, and Programs of All-Inclusive Care for the Elderly (PACE). In this blog, we are highlighting the policy changes, how they impact MA plans and PDP and suggesting ways MA and PDP plans can prepare for their implementations.
A. Cost sharing for ACIP-recommended vaccines
Effective January 1, 2023, eligible Medicare beneficiaries do not have cost-sharing for adult vaccines recommended by the Advisory Committee on Immunization Practices (ACIP) covered under Part D. This is now codified.1 CMS requires that the “effective date of the ACIP recommendation” is the date on which cost-sharing requirements apply. If a Part D sponsor is not able to effectuate $0 cost sharing for an ACIP recommended adult vaccine as of the “effective date of the ACIP recommendation”, the enrollee will need to be reimbursed if cost-sharing is incurred for the ACIP-recommended adult vaccine after the “effective date of the ACIP recommendation”.2
This is a continuation of the Inflation Reduction Act (IRA) provision implemented in CY 2023. Part D sponsors should be vigilant of any changes in recommendations by the ACIP and ensure vaccine claims are adjudicated accordingly.
B. Monthly cost sharing for insulin under Medicare Part D
Eligible beneficiaries do not have deductible for covered insulin products, and the applicable copayment for a one-month supply of each covered insulin product must not exceed the $35.00, another IRA provision.3
Beginning January 1, 2026, the cost-sharing amount is the lesser of: a). $35; b). an amount equal to 25% of the maximum fair price (MFP) established for the covered insulin product under the Medicare Drug Price Negotiation; or c). an amount equal to 25% of the negotiated price of the covered insulin product, as defined in 42 CFR §423.1004.
C. Medicare Prescription Payment Plan (M3P)
Beginning in 2025, enrollees in Part D plans have the option to pay their out-of-pocket cost-sharing for eligible Part D drugs in monthly payments which are capped during the course of the contract year. CMS is adding new requirements for the program – automatic election renewal in 2026 unless the enrollee opts out, the notice must be sent after the end of the annual coordinated election period (December 7) but prior to the end of the plan year. Part D plan sponsors must include their program terms and conditions for the upcoming plan year as part of the renewal notice or as a separate attachment. The 24-hour effectuation after election approval stands. And unsettled balances from M3P cannot be included in the calculation of Medical Loss Ratio.5 They are considered administrative costs.
Most Part D sponsors use their Pharmacy Benefit Manager (PBM) to adjudicate drug claims. They have to make sure that the PBM is aware of the new “lesser of” logic in adjudicating claims for covered insulin products.
Many Part D sponsors outsource M3P to Third Party Administrators (TPA) but oversight of implementation of new rules by the TPA belongs to the sponsors.
D. Improving experiences for Dually Eligible enrollees
CMS is finalizing new requirements for D-SNPs that are applicable integrated plans to: (1) have integrated member identification (ID) cards that serve as the ID cards for both the Medicare and Medicaid plans in which an enrollee is enrolled; and (2) conduct an integrated health risk assessment (HRA) for Medicare and Medicaid, rather than separate HRAs for each program. These changes go into effect on January 1, 2027. CMS is also finalizing provisions to codify timeframes for special needs plans to conduct HRAs and individualized care plans (ICPs) and prioritize the involvement of the enrollee or the enrollee’s representative, as applicable, in the development of the ICPs.
- Initial HRAs must be completed within 90 days of enrollment
- Annual HRAs must be completed within 365 days of the previous assessment
- ICPs must be completed within 30 days of the initial HRA or 30 days after enrollment, whichever occurs later
This requires a collaborative approach by case managers, the enrollment team and the Interdisciplinary Care Team (ICT) who develops the ICPs.
E. Submission timelines for Prescription Drug Event (PDE) for selected drugs
CMS is codifying PDE submission timeliness requirements6.
- Initial PDE records be submitted within 30 calendar days following the date the claim is received by the Part D sponsor or its PBM;
- Adjustment and deletion PDE records due within 90 calendar days following discovery of the issue requiring a change to the PDE;
- Resolution of rejected PDE records within 90 calendar days following the receipt of rejected record status from CMS.
- For drugs selected for negotiation under the Medicare Drug Price Negotiation Program, Part D sponsors must submit initial PDE records within seven (7) calendar days from the date the Part D sponsor receives the claim.
For most Part D sponsors, PDE submission is delegated to their PBMs. The new rule for PDE related to “selected drugs” should be tested prior to January 1, 2026.
F. Medicare Transaction Facilitator (MTF) Requirements for Network Pharmacy Agreements
CMS is codifying a requirement7 on Part D sponsors, or their PBMs, to include in their network pharmacy agreements a provision that requires such pharmacies to be enrolled in the Medicare Transaction Facilitator Data Module (MTF DM) and to certify to CMS that the enrollment information provided by such pharmacies in the MTF DM is accurate, complete, and up to date.
The MTF DM will facilitate the exchange of data to help effectuate the Medicare Fair Price (MFP) program timely and consistently.
CMS has published a timeline for pharmacies’ and dispensing entities’ participation8 in the MTF DM. The Draft Medicare Transaction Facilitator Agreements are posted online.9
G. Clarifying MA Organization Determinations to Enhance Enrollee Protections in Inpatient Settings
CMS is codifying the requirement that plans give a provider notice of a coverage decision in addition to the enrollee, whenever the provider submits a request on behalf of an enrollee. CMS is clarifying that an enrollee’s liability to pay for services cannot be determined until an MA organization has made a claims payment determination. CMS is restricting MA plans’ ability to use information gathered after the enrollee has been admitted for inpatient stay when reviewing the appropriateness of the admission.
This requires coordination between the Utilization Management team and claims processing department to ensure compliance.
H. Risk Adjustment Update
CMS is removing the reference to a specific version of the ICD10 when defining Hierarchical Condition Categories (HCCs), while maintaining a reference to the ICD in general and substituting the terms “disease codes” with “diagnosis codes” and “disease groupings” with “diagnosis groupings” to be consistent with ICD terminology.
The final rule has a lot of new procedures for plan sponsors to process. If you have questions regarding a specific requirement and its implementation, Inovaare has resident compliance specialists and technical consultants who can help. Feel free to contact us at 408.850.2235.