Knowledge Base Category -

Medicare Transmittals & MLN Articles

September 19, 2023: MLN MM13166: ICD-10 & Other Coding Revisions to National Coverage Determinations: October 2023 Update

Relevant NCD coding changes in related Change Request 13166 include:

• NCD 20.20: External Counterpulsation Therapy (ECP) for Severe Angina, effective August 7, 2023,
• NCD 90.2: Next Generation Sequencing (NGS), effective August 7, 2023, and
• NCD 210.1: Prostate Screening Tests, effective October 1, 2023.

https://www.cms.gov/files/document/mm13166-icd-10-other-coding-revisions-national-coverage-determinations-october-2023-update.pdf

October 11, 2023: MLN MM13381: Update for Blood Clotting Factor Add-on Payments

In this MLN article, CMS advises IPPS hospitals to make sure your billing staff knows about additional diagnosis codes eligible for blood clotting factors, and adjustment of certain claims with the added codes. https://www.cms.gov/files/document/mm13381-update-blood-clotting-factor-add-payments.pdf

October 12, 2023: Transmittal 12299: An Omnibus CR to Implement Policy Updates in the CY 2023 PFS Final Rule, Including (1) Removal of Selected NCDs (NCD 160.22 Ambulatory EEG Monitoring, and (2) Expanding Coverage of Colorectal Screening

Transmittal 11865 issued February 16, 2023 has been rescinded and replaced by Transmittal 12299 to provide clarification on CMS policy and related claims processing instructions for their approach to colonoscopies within the context of a complete colorectal cancer screening. Specifically, this CR is amended to remove the requirement that contractors shall return to provider / return as un-processable certain screening colonoscopy claims that do not include the KX modifier. https://www.cms.gov/files/document/r12299bp.pdf

October 19, 2023: MLN MM13365: Medicare Deductible, Coinsurance, & Premium Rates: CY 2024 Update

CMS advises providers to make sure your billing staff knows about the CY 2024 Medicare Part A and Medicare Part B deductible and coinsurance rates, and Part and Part B premium amounts. https://www.cms.gov/files/document/mm13365-cy-2024-update-medicare-deductible-coinsurance-premium-rates.pdf

Coverage Updates

October 13: NCD 220.6.20 Beta Amyloid PET in Dementia and Neurodegenerative Disease Final Decision Memo

CMS announced a final decision removing this NCD and now permitting Medicare coverage determinations to be made by the MACs. Removing the NCD also removes the current limitation of one PET beta-amyloid scan per lifetime from the coverage requirements.

Social factors can have a positive and negative impact on our health and our general outlook on life. Hospitals have been tasked with assessing and identifying social factors that impact a patient’s health and well-being. Once identified, hospitals are taking action to mitigate the negative impact of social factors that are contributing to wide health disparities and inequities.

This article will review Social Determinants of Health (SDOH), Health Related Social Needs (HRSN), and Social Drivers of Health (SDOH).

Social Determinants of Health (SDOH)

HHS Health People 2030 National Health Initiative

The U.S. Department of Health and Human Services through their Healthy People 2030 national health initiative defines SDOH as being “the conditions in the environments where people are born, live, learn, work, play, worship, and age that affect a wide range of health, functioning, and quality-of-life outcomes and risks.” They group SDOH into the five domains of economic stability, education access and quality, health care access and quality, neighborhood and built environment, and social and community context.  

SDOH can negatively impact our health especially as we age. Collectively, the U.S. population is getting older, in fact “people aged 65 years and older made-up 17 percent of the population in 2020. By 2040, that number is expected to grow to 22 percent. An aging population means higher use of health care services and a greater need for family and professional caregivers.”

To learn more about how the Healthy People 2030 initiative is addressing SDOH and available resources, visit the initiative website at https://health.gov/healthypeople/priority-areas/social-determinants-health.

SDOH and ICD-10-CM Z Codes

ICD-10-CM Z codes are found in Chapter 21: Factors Influencing Health Status and Contact with Health Services (Z00-Z99). The SDOH codes are a subset of this chapter and range from Z55 – Z65 and are used to document SDOH data (i.e., housing, food insecurity, lack of transportation).

CMS recently published information about a new CMS infographic to help you understand and use Z codes to improve the quality and collection of health equity data in the September 14, 2023 edition of MLN Connects (https://www.cms.gov/training-education/medicare-learning-network/newsletter/2023-09-14-mlnc#_Toc145581413).

ICD-10-CM Official Guidelines for Coding and Reporting Documentation Tips Regarding SDOH Z Codes

• Code assignment may be based on medical record documentation from clinicians involved in the care of the patient who are not the patient’s provider (i.e., Social Workers, Case Managers, or Nurses).
• Patient self-reported documentation may be used when the information is signed-off by and incorporated into the medical record by either a clinician or provider.
• SDOH codes should be assigned only when the documentation specifies that the patient has an associated problem or risk factor. For example, you would not use ICD-10-CM code Z60.2 (Problems related to living alone) without documentation of a risk or unmet needs for assistance at home.

   

  Z Codes IPPS FY 2024 Change in Severity Designation

  In the 2024 IPPS Final Rule, CMS recognized that homelessness is an indicator of increased resource utilization in the acute inpatient hospital setting. Therefore, they finalized the proposal to change the severity designation for three codes to a CC (comorbidity) for the purposes of MS-DRG assignment:

• Z59.00: Homelessness, unspecified,
• Z59.01: Sheltered homelessness (due to economic difficulties, currently living in a shelter, motel, temporary or transitional living situation, scattered site housing, or not having a consistent place to sleep at night), and
• Z59.02: Unsheltered homelessness (residing in a place not meant for human habitation, such as cars, parks, sidewalks, or abandoned buildings (on the street)).

CMS noted in a FY 2024 IPPS Final Rule fact sheet that as SDOH codes are increasingly added to billed claims, they plan “to continue to analyze the effects of SDOH on severity of illness, complexity of services, and consumption of resources.”

Did You Know?

There is a new code to assign for Encounter for Screening for COVID-19.

Why It Matters?

Prior to October 1, 2023, coders assigned code (Z20.822) for contact with and (suspected) exposure to COVID-19, for COVID-19 screening, per the federal Public Health Emergency (PHE).  However, as of May 11, 2023, the federal PHE expired.  Therefore, the new code is to be assigned beginning with all encounters on or after October 1, 2023.

What Can I Do?

Stay abreast of all new ICD-10-CM codes and guidelines and new Coding Clinic references.

References

Coding Clinic for ICD-10-CM/PCS, Second Quarter 2012, Page 3

Coverage Updates

September 6, 2023: National Coverage Determination (NCD) Dashboard

CMS released an NCD dashboard that was last updated on August 23, 2023. This document details the seven accepted NCD requests that are on the CMS Wait List, the four open NCD topics currently undergoing a National Coverage Analysis (NCA) with opportunities for public comment, and the two NCDs finalized in the past twelve months. Links to all thirteen topics are included in this document. https://www.cms.gov/files/document/ncd-dashboard.pdf

COVID-19 Update

September 11, 2023: FDA Approves and Authorizes Updated COVID-19 Vaccines

The FDA has approved an update COVID-19 vaccine that was developed to target current circulating variants. The updated mRNA vaccines for 2023-2024 were manufactured by ModernaTX Inc. and Pfizer Inc. and have been updated to include a monovalent (single) component that corresponds to the Omicron variant ZBB.1.5. https://www.fda.gov/news-events/press-announcements/fda-takes-action-updated-mrna-covid-19-vaccines-better-protect-against-currently-circulating

September 14, 2023: Special MLN Connects: COVID-19 Updated mRNA Vaccines for Patients 6 Months or Older

CMS issues a special MLN Connects announcing the FDA’s approval of updated vaccines noting that the CDC recommends everyone 6 months and older get an updated COVID-19 vaccine. Also includes in this announcement are six new CPT codes effective September 11, 2023 for the vaccine and administration of the vaccine. https://www.cms.gov/training-education/medicare-learning-network/newsletter/2023-09-14-oce

Other Updates

September 14, 2023: MLN Connects: Social Determinants of Health Resources

In this edition of MLN Connects, CMS let providers know about a new CMS infographic to help you understand and use Z codes. They also included links to additional resources.

As a reminder, effective October 1, 2023, CMS finalized their proposal to change the severity level designation for diagnosis codes Z59.00 (Homelessness, unspecified), Z59.01 (Sheltered homelessness), and Z59.02 (Unsheltered homelessness) from NonCC to CC. https://www.cms.gov/training-education/medicare-learning-network/newsletter/2023-09-14-mlnc

September 19, 2023: CMS Requires States to Pause Disenrollments and Reinstate Coverage for Impacted Individuals

Did You Know?

Effective October 1, 2023, there is a new Place of Service (POS) Code 27 – “Outreach Site/Street.” This POS is defined as “a non-permanent location on the street or found environment, not described by any other POS code, where health professionals provide preventive, screening, diagnostic, and/or treatment services to unsheltered homeless individuals.”

In the August 10^th Transmittal 12202, CMS indicated that “Medicare has not identified a need for this new code. However, in order to comply with HIPAA and its goals of promoting administrative simplification, contractors are to accept claims containing this new code in accordance with its effective date. Medicare contractors shall therefore implement the systems and/or local-contractor-level changes needed for Medicare to return as unprocessable claims with the new code should it appear on a Medicare claim.”

Why it Matters?

On September 20, 2023, CMS rescinded Transmittal 12202 and replaced it with Transmittal 12254 indicating that the transmittal has been revised to “align with broader CMS efforts to address economic, social, and other obstacles impacting Medicare beneficiary healthcare access by revising the IOM as well as the policy section and business requirements 13313.2.”

The policy note has changed to indicate that “Contractors are to accept claims containing this new code in accordance with its effective date. Medicare contractors shall therefore implement the systems and/or local-contractor-level changes needed for processing claims with the new code should it appear on a Medicare claim.”

What Can I Do?

Make sure key stakeholders at your facility are aware of this change to the new POS Code 27.

Resources

August 10, 2023 Transmittal 12202: New Place of Service (POS) Code 27 – “Outreach Site/Street” https://www.cms.gov/files/document/r12202cp.pdf

Medicare Transmittals & MLN Articles

August 28, 2023: MLN MM13350: Changes to the Laboratory National Coverage Determination Edit Software: January 2024 Update

Billing staff need to know about newly available codes, recent coding changes, and how to find NCD coding information. CMS noted that there are no policy changes in this ICD-10 quarterly update. Instead, they follow the current, longstanding NCD process to implement policy changes. https://www.cms.gov/files/document/mm13350-changes-laboratory-national-coverage-determination-edit-software-january-2024-update.pdf

August 28, 2023: MLN MM13335: Inpatient Psychiatric Facilities Prospective Payment System: FY 2025 Updates

This article discusses changes for FY 2024 that are effective October 1, 2023. Make sure your billing staff knows about FY 2024 market basket update, wage index update, and changes to the Inpatient Psychiatric Facility (IPF) Quality Reporting Program (IPFQRP). https://www.cms.gov/files/document/mm13335-inpatient-psychiatric-facilities-prospective-payment-system-fy-2024-updates.pdf

August 31, 2023: MLN MM13353: Ambulatory Surgical Payment System: October 2023 Update

CMS advises in this MLN article that you make sure your billing staff knows about the new HCPCS code for renal/kidney histotripsy, the new drugs and biological codes, and the new skin substitute HCPCS codes. https://www.cms.gov/files/document/mm13353-ambulatory-surgical-center-payment-system-october-2023-update.pdf

September 6, 2023: MLN MM13340: Hospital Outpatient Prospective Payment System: October 2023 Update

This article highlights new COVID-19 CPT vaccines and administration codes, proprietary laboratory analyses (PLA) coding changes, multianalyte assays with algorithmic analyses (MAAA) CPT coding change, advanced diagnostics tests (ADLTs) under the clinical lab fee schedule (CLFS) and HCPCS code changes. https://www.cms.gov/files/document/mm13340-hospital-outpatient-prospective-payment-system-october-2023-update.pdf

September 6, 2023: MLN MM13343: DMEPOS Fee Schedule: October 2023 Quarterly Update

Make sure your billing staff knows about fee schedule adjustment relief for rural and non-contiguous areas, new HCPCS codes added, and new fee schedule amounts. https://www.cms.gov/files/document/mm13343-dmepos-fee-schedule-october-2023-quarterly-update.pdf

September 12, 2023: MLN MM11262: Limitation on Recoupment of Overpayments

This article reviews how Medicare recoups overpayments and how appeals and reconsiderations affect the recoupment process. https://www.cms.gov/files/document/mm11262-limitation-recoupment-overpayments.pdf

September 14, 2023: MLN MM13306: Inpatient & Long-Term Care Hospital Prospective Payment System: FY 2024 Changes

Highlights of policy changes for FY 2024 are included in this MLN article. Of note, CMS indicates that for FY 2024, hospitals have until late-September to notify them of any errors in the calculation of their Total Hospital Acquired Conditions (HAC) Reduction Program score. For this reason, the list of hospitals subject to the HAC Reduction Program will not be available by October 1, 2023. They note that “until we issue a final list of hospitals that are subject to the HAC Reduction Program for FY 2024, MACs will hold hospital claims. We anticipate issuing the list on or about October 3, 2023.” https://www.cms.gov/files/document/mm13306-inpatient-long-term-care-hospital-prospective-payment-system-fy-2024-changes.pdf

September 19, 2023: MLN MM13166: ICD-10 & Other Coding Revisions to National Coverage Determinations: October 2023 Update

Relevant NCD coding changes in related Change Request 13166 include:

• NCD 20.20: External Counterpulsation Therapy (ECP) for Severe Angina, effective August 7, 2023,
• NCD 90.2: Next Generation Sequencing (NGS), effective August 7, 2023, and
• NCD 210.1: Prostate Screening Tests, effective October 1, 2023.

We are mid-way through a week of celebrating Clinical Documentation Integrity Specialists. This year marks the 13^th annual Clinical Documentation Integrity (CDI) Week. The Association of Clinical Documentation Integrity Specialists (ACDIS) theme for 2023 is CDI Success Stories: Writing your next chapter!

Like the detective in a good who done it book, CDI specialists review records to make sure all the key elements are in a patient’s “story.” They look for clues (clinical indicators) without a documented diagnosis and documentation without supporting clues and then work with physicians to make sure the record reflects the patient’s complete story.

MMP would like to wish all the hard-working CDI Professionals that we have the privilege to work with a happy CDI week. To help you prepare for the new CMS fiscal year, while celebrating this week, here are links to key documentation needed for a successful October 1^st start of the 2024 CMS fiscal year.   

FY 2024 IPPS Final Rule Home Page

On this webpage you will find links to:

• The FY 2024 IPPS Final Rule,
• FY 2024 Final Rule Tables
• Table 5: MS-DRGs, Relative Weighting Factors, Geometric and Arithmetic Mean Lengths of Stay, and Post-Acute Transfer designated MS-DRGs
• Table 6: New Diagnosis Codes,
• Table 6B: New Procedure Codes
• Table 6I: Complete MCC List,
• Table 6I.1: Additions to the MCC List,
• Table 6I.2: Deletions to the MCC List,
• Table 6J: Complete CC list,
• Table 6J.1: Additions to the CC list,
• Table 6J.2: Deletions to the CC list
• FY 2024 MAC Implementation Files
• MAC Implementation File 7: FY 2024 MS-DRGs Subject to the Replaced Devices Policy,
• MAC Implementation File 8: FY 2024 New Technology Add-on Payment

(https://www.cms.gov/medicare/payment/prospective-payment-systems/acute-inpatient-pps/fy-2024-ipps-final-rule-home-page)

2024 ICD-10-CM Files.)

Downloads available on this webpage includes:

• 2024 POA Exempt Codes,
• 2024 Conversion Table,
• 2024 Addendum – UPDATED 6/29/2023,
• 2024 Code Description in Tabular Order – UPDATE 6/29/2023,
• 2024 Code Tables, Tabular and Index UPDATED 6/29/2023,
• FY 2024 ICD-10-CM Coding Guidelines, and
• 2024 Errata – July 26, 2023.

(https://www.cms.gov/medicare/coding-billing/icd-10-codes/2024-icd-10-cm#:~:text=The%202024%20ICD%2D10%2DCM,2023%20through%20September%2030%2C%202024)

The ICD-10-Files are also available on the CDC’s Comprehensive Listing ICD-10-CM Files webpage (https://www.cdc.gov/nchs/icd/Comprehensive-Listing-of-ICD-10-CM-Files.htm).

2023 ICD-10-PCS Files

Downloads available on this webpage includes:

• 2024 ICD-10-PCS Order File,
• 2024 Official ICD-10-PCS Coding Guidelines,
• 2024 Version Update Summary,
• 2024 ICD-10-PCS Codes File,
• 2024 ICD-10-PCS Conversion table,
• 2024 ICD-10-PCS Code Tables and Index, and
• 2023 ICD-10-PCS Addendum.

(https://www.cms.gov/medicare/coding-billing/icd-10-codes/2024-icd-10-pcs)

Again, happy CDI week from our team to yours.

“The primary objective of the IPPS and the LTCH PPS is to create incentives for hospitals to operate efficiently and minimize unnecessary costs, while at the same time ensuring that payments are sufficient to adequately compensate hospitals for their legitimate costs in delivering necessary care to Medicare beneficiaries.”

• Source: Appendix A: Economic Analysis of FY 2024 IPPS Final Rule

There are eighteen days until the October 1^st start to the 2024 CMS Fiscal Year. As you continue to prepare, this article focuses on New Technologies Add-On Payments (NTAPs). Section E. Add-On Payments for New Services and Technologies for FY 2024 begins on page 58,793 of the FY 2024 IPPS Final Rule.

New Technologies Eligible for Add-On Payment (NTAPs) Background

Section 1886(d)(5)(K)(i) of the Act requires the Secretary to establish a mechanism to recognize the costs of new medical services and technologies under the payment system under the subsection which establishes the system for paying for the operating costs of inpatient hospital services.

The system of payment for capital costs is established in section 1886(g) of the Act. For this reason, capital costs are not included in the add-on payments for a new medical service or technology.  

NTAPs are not budget neutral and the “newness” for payment is limited to the 2-to-3-year period after the date a technology becomes available.

In response to the COVID-19 public health emergency (PHE) and as new therapies received approval to treat COVID-19, CMS established the New COVID-19 Treatments Add-on Payment (NCTAP). With the PHE ending in May of this year, the add-on payments for NCTAPs will end September 30, 2023.

There are three pathways for a new service or technology to be approved for the add-on payment (Traditional pathway, Certain Antimicrobial Products Alternative Pathway, and Certain Transformative New Devices Alternative Pathway).

For the alternative pathways, a technology is not required to have a specified FDA designation at the time the application for NTAP is made. Instead, “CMS reviews the application based on the information provided by the applicant only under the alternative pathway specified by the applicant at the time of new technology add-on payment application submission. However, to receive approval for the new technology add-on payment under that alternative pathway, the technology must have the applicable FDA designation and meet all other requirements in the regulations in § 412.87(c) and (d), as applicable.”

Coding NTAPs

Section X New Technology was added to ICD-10-PCS effective October 1, 2015. CMS has indicated (https://www.cms.gov/Medicare/Coding/ICD10/Downloads/2016-Section-X-New-Technology-.pdf) that “Section X was created in response to public comments received regarding New Technology proposals presented at ICD-10 Coordination and Maintenance Committee Meetings, and general issues facing classification of new technology procedures.”  To receive payment for an eligible NTAP, the applicable section X New Technology ICD-10-PCS code must be on the claim submitted for adjudication.

NTAPs by the Numbers

Before looking ahead to FY 2024, I wanted to see what new technologies have been coded in FY 2023 claims with dates of service from October 1, 2022 through March 31, 2023. The following claims volume was provided by our sister company RealTime Medicare Data (RTMD), represents claims volume for the entire nation, and is specific to the Medicare Fee-for-Service population.   

FY 2023

25: The number of technologies eligible for add-on payment.

94,210: The number of claims with dates of service from October 1, 2022 through March 2023 that included an ICD-10-PCS code eligible for add-on payment.

7,551: The number of claims with an ICD-10-PCS new technology code when the technologies eligible for the COVID-19 Treatments Add-On Payment (NCTAP) (convalescent plasma, Olumiant, and Veklury® (remdesivir)) were excluded from the claims volume. 

FY 2024

33: The number of technologies eligible for add-on payment.

58,524.5: The number of Medicare beneficiaries that CMS expects will receive one of the new technologies. Note, the .5 is not an error. CMS’ estimated cases for the NTAP Livtencity™ is 129.5 cases.

$495,497,861.97: CMS’ estimated Medicare spending on NTAPs in FY 2024.

Moving Forward

Identifying and coding new technologies is an opportunity not to be missed for those hospitals providing these services. That said, some questions come to mind for you to think about:

• Is your hospital providing any of these services or technologies?
• Who needs to be aware of what the new technologies are? (i.e., Physicians, Pharmacy, Coding Professionals, Clinical Documentation Integrity Specialists, Case Managers)
• What process do you have in place to alert your Coding Staff of the need to code the new technology ICD-10-PCS codes?

Resource

FY 2024 IPPS CMS webpage: https://www.cms.gov/medicare/payment/prospective-payment-systems/acute-inpatient-pps/fy-2024-ipps-final-rule-home-page

We have a couple of questions regarding the coding of hyperlipidemia with hypercholesterolemia.

Question#1

If a provider has documented mixed hyperlipidemia and hypercholesterolemia in the record, do you code both conditions?

Answer#1

Only assign code E78.2 for mixed hyperlipidemia.  Pure hypercholesterolemia, unspecified (E78.00) is included with code E78.2 so it is not coded separately. 

Effective date:  June 9, 2023

Question#2

How do you code unspecified hyperlipidemia and hypercholesterolemia?

Answer#2

In this case, only the code for pure hypercholesterolemia, unspecified (E78.00) is assigned.  Hyperlipidemia, unspecified (E78.5) is not coded separately since hypercholesterolemia identifies the specific blood lipid elevated.

Effective date:  June 3, 2022

Hypercholesterolemia is defined as a high blood cholesterol level.

Hyperlipidemia is defined as high lipid or fat levels in the blood. 

References:

ICD-10-CM Official Coding Book

Coding Clinic for ICD-10-CM/PCS, Second Quarter 2023, Page 9

August 10, 2023: New Place of Service Code 27 – Outreach Site/Street

CMS published Change Request (CR) 13314 to inform providers about the new Place of Service (POS) code 27 for “Outreach Site/Street” – a non-permanent location on the street or found environment, not described by any other POS code, where health professionals provide preventive, screening, diagnostic, and/or treatment services to unsheltered homeless individuals. This code becomes effective on October 1, 2023.

In the August 25^th MLN connects e-newsletter, CMS noted “at this time, Medicare won’t use this code in claims processing. If you submit a claim with this code, we’ll return it to you.”

https://www.cms.gov/outreach-and-education/outreach/ffsprovpartprog/provider-partnership-email-archive/795634753/2023-08-24-mlnc#_Toc143610547

August 10, 2023: Review Choice Demonstration for Inpatient Rehabilitation Facility Services FAQs

On May 15, 2023, CMS announced the new initiative, The Review Choice Demonstration (RCD) for Inpatient Rehabilitation Facility (IRF) Services. This demonstration started in Alabama with the first cycle of review dates being August 21, 2023 through February 29, 2024.

Palmetto GBA Jurisdiction J is the Medicare Administrative Contractor for Alabama, and they have a dedicated webpage specific to this demonstration (https://palmettogba.com/palmetto/jja.nsf/DID/FHT2JV6UCF). On August 28^th, they posted a link to FAQs. Topics covered in this document include general questions, choice selection questions, submission questions, pre-claim review (PCR) questions, and medical necessity questions.

For IRF Providers outside of Alabama, I encourage you to pay close attention to the general question 4 asking what states does this demonstration impact.

CMS notes the demonstration initially for providers physically located in the state of Alabama and bill to MAC Jurisdiction J. The demonstration will then expand to Pennsylvania, Texas, and California, “as well as any state that bill to the MAC jurisdictions JJ, JL, JH, and JE, regardless of where they are physically located.”

Here is one example included in the answer to question 4:

I am an IRF located in a demonstration state but bill to a different MAC than the one for that state.

“You are included in the demonstration if the MAC that you bill to is JJ, JE, JL, or JH. If you bill to another MAC, then you are not included in the demonstration.”

You can find additional information about this demonstration on the CMS website at https://www.cms.gov/research-statistics-data-systems/medicare-fee-service-compliance-programs/prior-authorization-and-pre-claim-review-initiatives/review-choice-demonstration-inpatient-rehabilitation-facility-services#timeline.

August 21, 2023: CMS Issues Draft Guidance on New Program to Allow People with Traditional Medicare Fee-for-Service to Pay Out-of-Pocket Prescription Drug Costs in Monthly Payments

The Inflation Reduction Act of 2022 was signed into law on August 16, 2022. This law caps annual out-of-pocket prescription drug costs at $2,000 for 2025.

In addition to capping the out-of-pocket amount, the law gives people with Medicare prescription drug coverage (Medicare Part D) the option to make monthly payments spread over the year, also starting in 2025. On August 21^st, CMS published draft guidance for comment outlining the requirements and procedures for spreading out the cost sharing over the year.

Due to the size of the new program, CMS indicated they would release the guidance in two parts. Part one was released August 21^st and focuses on “helping Medicare Part D plan sponsors and pharmacies prepare for the new programs and build necessary infrastructure for successful implementation.” CMS is soliciting comments on topics and strategies included in the guidance to ensure eligible Part D enrollees benefit from the programs.

You can submit comments to CMS on the first draft guidance through September 30, 2023.

The planned release date for part two of the guidance will be in early 2024. This second release will focus on Medicare Part D enrollee outreach and education, Medicare Part D plan bid information, monitoring and compliance. “CMS also intends to develop tools, such as calculators, to help people with Medicare Part D and their caregivers learn what monthly payments may look like under the new program.”

Links to a Fact Sheet about the Medicare Prescription Payment Plan, an implementation timeline, and the August 21^st draft guidance are included in an August 21^st CMS Press Release. https://www.cms.gov/newsroom/press-releases/cms-issues-draft-guidance-new-program-allow-people-medicare-pay-out-pocket-prescription-drug-costs