On July 16, the Centers for Medicare and Medicaid Services (CMS) released the Final Part Two Guidance on the Medicare Prescription Payment Plan (MPPP) program (link). Both parts one and two guidance pertain to the first year of the program, contract year (CY) 2025. (see here for ADVI’s instant on the Final Part One Guidance) 

In this final part two guidance, CMS describes requirements for Part D sponsor obligations related to outreach and education, pharmacy processes, and operational considerations for the program. 

The Medicare Prescription Payment Plan implements the Inflation Reduction Act’s maximum monthly cap on cost-sharing payments under Prescription Drug Plans and MA-PD plans. The final part one guidance detailed how Part D sponsors must allow elections, determine a maximum monthly cap, bill participants, and notify pharmacies when enrollees are likely to benefit from MPPP; this final part two guidance focuses on Part D sponsors obligations for MPPP education, outreach, and communication.  

Outreach, Education, and Communications Requirements for Part D Sponsors 

General Outreach and Education 

Part D sponsors must include information about the Medicare Prescription Payment Plan in the following communications:
Mailing of membership ID cards (must include an MPPP election request form) 
The Evidence of Coverage (EOC) 
The Annual Notice of Change (ANOC) 
The Explanation of Benefits (EOB) 
Part D Sponsors’ website
CMS will also require Part D Sponsors to include the following on their website:
MPPP election mechanism 
An overview of the program that highlights MPPP as a new offering from all Part D plans that is voluntary to join 
Examples of program calculations with “easy-to-understand” explanations  
Description of
Who is likely to benefit 
Financial implications of enrolling in MPPP (e.g., free to join, importance of paying monthly bills) 
How to opt in/out of MPPP and file complains  
Contact information to obtain more information on MPPP  
General information about the Low-Income Subsidy (LIS) program 
CMS released updated model EOC and ANOC materials on June 12, 2024, and a final Part D EOB on May 23, 2024. All materials include educational information about MPPP. The ANOC also includes instructions on how to opt into MPPP. 
Part D sponsors are encouraged to use language from the CMS-developed materials for all non-standardized communication materials (e.g., accompanying materials with the membership ID card and the Part D sponsor website), however, they are not required to do so. If Part D sponsors choose to develop alternative materials, CMS notes that they must ensure the materials convey accurate information and comply with existing Part D requirements. 

Targeted Outreach and Education Requirements for Part D Sponsors 

Part D sponsors are required to have a mechanism to notify a pharmacy when a Part D enrollee incurs out-of-pocket (OOP) costs that make it likely the enrollee may benefit from participating in the MPPP.
As discussed in the Final Part One MPPP Guidance, the OOP threshold for 2025 will be $600 for a single prescription. 
If a notification is received, Part D sponsors must then require the pharmacy to inform enrollees about the MPPP.  
CMS is requiring Part D sponsors to identify enrollees likely to benefit from the program and perform targeted outreach both before and during the plan year.
In the year before the plan year:
Part D sponsors must identify enrollees who incurred $2,000 in OOP costs for covered drugs through September of that year.
More specifically, Part D sponsors must:
During the fourth quarter of the year, review claims from the first three quarters of the year to identify enrollees likely to benefit from the program.  
Send the likely to benefit notice to identified beneficiaries in October, November, or early December (no later than December 7 of each year, the end of the Annual Election Period). 
CMS notes that this is the minimum requirement, and that sponsors may develop supplemental strategies to identify beneficiaries likely to benefit from MPPP (must be provided in same time frame). 
During the plan year:
Part D sponsors must put in place reasonable guidelines for ongoing identification of target enrollees during the plan year. CMS provides the following examples that the sponsor could, but is not required to, take:  
Beneficiaries who are prescribed a new high-cost drug that would trigger the pharmacy point-of-service (POS) notification. 
If the Part D sponsor is made aware through prior authorization or utilization management edits in place for the drug 
CMS has developed a standardized notice for “likely to benefit” enrollees that Part D sponsors will be required to use for outreach (via mail or electronically). Part D sponsors must also include information about the program (may be fulfilled with CMS-developed fact sheet) and an MPPP election request form. 

Outreach to Providers and Pharmacies  

CMS encourages Part D Sponsors to include information about MPPP in communications with contracted providers and network pharmacies.
Contracted providers: CMS suggests Part D sponsors target communications to specialties more likely to prescribe high-cost drugs. 
Pharmacies: CMS encourages Part D Sponsors to provide all network pharmacies with additional educational information about MPPP. While encouraged, CMS notes that pharmacies are not required to provide additional counseling or consultation to Part D beneficiaries about the program. 

Communications with Program Participants and Model Materials Requirements 

MPPP Elections
Part D sponsors must accept election requests they receive for MPPP, regardless of the format of the request (e.g., paper, telephone, website). 
Part D sponsors are encouraged to provide tailored examples for enrollees to understand their financial implications under MPPP.  
In communications about the program with current and potential participants, Part D sponsors must provide general information about LIS and how to enroll, noting that LIS is more advantageous for those who qualify. 
Part D sponsors are required to communicate that the request to participate in the MPPP has been accepted and effectuated (via written notice for requests in advance of the plan year, and telephonically then written notice for requests during the plan year). 
MPPP Notices
CMS developed model language for the following notices:
Participation Request Form 
Notice of Acceptance of Election 
Notice for Failure to Make Payments under the MPPP 
Notification of Termination of Participation in the MPPP
Must be sent within three calendar days after the end of the grace period. 
Notification of Voluntary Removal from the MPPP
Must be sent within ten calendar days of receipt of voluntary termination request. 
CMS released these model notices on April 15, 2024, through the Medicare Advantage and Prescription Drug Programs: Part C and Part D Medicare Prescription Payment Plan Model Documents ICR package (link). 

Language Access and Accessibility Requirements  

CMS requires outreach materials and communications to be provided in a culturally competent manner to all Part D enrollees. Requirements stipulate Part D sponsors must provide:
Translated materials to Part D enrollees on a standing basis in any non-English language that is the primary language of at least 5% of the individuals in a plan benefit package service area. 
Materials in an accessible format using auxiliary aids and services upon request.  

CMS Part D Enrollee Education and Outreach 

CMS states that it is developing new, and updating existing, Part D educational resources.
CMS is issuing a fact sheet for Part D enrollees on the Medicare website and other communication channels. 
Part D sponsors’ use of this fact sheet will satisfy the Part D sponsor requirement to provide information on the MPPP.
Note: CMS clarifies that Part D sponsors may also separately mail the fact sheet, as an added option to mailing it with the membership ID card. 
CMS also encourages Part D sponsors to use the fact sheet to provide information to pharmacies, contracted providers, and other interested parties, and to supplement their own educational materials. 

Pharmacy Processes 

Supplemental Coverage
CMS restates that beneficiaries with supplemental coverage may not receive notifications about MPPP due to their OOP being reduced below the $600 “likely to benefit” threshold and encourages Part D sponsors to make customer service representatives aware of this difference. 
CMS notes it is aware that the final patient pay amount returned to the pharmacy by a supplemental payer is occasionally higher than the original patient pay amount.
In these cases, Part D sponsors may only include the participant’s original Part D cost sharing in the MPPP, as determined by their plan-specific benefit structure. 
Beneficiary Notification
CMS recommends that Part D sponsors ensure their customer service representatives are aware of the following possibilities when communicating with beneficiaries:
Beneficiaries with supplemental insurance may not receive notifications about the MPPP at POS.  
If a beneficiary enrolls in the MPPP late in a plan year, but has costs below the maximum monthly cap, they may be required to pay the full amount as part of their first month’s bill.  
In general, all MPPP requirements are the same across pharmacy types. However, in settings where there isn’t direct contract with enrollees the Part D sponsor must ensure that a hard copy of the “Medicare Prescription Payment Plan Likely to Benefit Notice” is provided to beneficiaries likely to benefit at the time the prescription is picked up.
CMS outlines alternate strategies for pharmacies that do not have a practical method of providing a hard copy (e.g., long term care pharmacies, mail order pharmacies).  
CMS states that the requirement to notify certain beneficiaries of the MPPP should not be interpreted as a requirement to delay dispensing of medication. 
CMS also notes that Part D sponsors must ensure that pharmacies provide “likely to benefit” notices to Part D enrollees, even if they decline to purchase the prescription due to cost. 
Readjudication of Claims for New Participants
If an enrollee receives a “Medicare Prescription Payment Plan Likely to Benefit Notice” at pharmacy POS, they may choose to leave the pharmacy without their prescriptions and decide to enroll in MPPP at a later date.  
If a beneficiary opts to enroll in MPPP and returns to the pharmacy to pick up their prescriptions, CMS clarifies that the prescription claim that triggered the “likely to benefit” notification must be readjudicated.
If the enrollee has other unpaid claims at the same pharmacy, they can be paid at the typical plan-defined cost sharing level, or they may request those claims be readjudicated so as to be included in the MPPP and pay $0 at the pharmacy for all prescriptions. 
Processing Claims for Participants in Special Settings
CMS outlines certain situations where a beneficiary may not benefit from the MPPP:
Long term care pharmacies that currently bill the long-term care facility, not the beneficiary.  
Tribe and Tribal Organization, and Urban Indian Organization (I/T/U) Pharmacies that provide no-cost prescriptions to eligible enrollees. 

Part D Sponsor Operational Requirements 

Part D Bidding Guidance for CY 2025
Part D sponsors are required to report unsettled balances owed by participants under the MPPP as plan losses. If a Part D sponsor is compensated by a participant for the unsettled balance or sells the balance as debt, the amount is not considered a loss and must not be included in the bid.  
As a result, the Part D bid pricing tool has been modified to reflect projected losses for the MPPP. These losses must be reflected as administrative costs in the Part D bid pricing tool (BPT) (link).  
Medical Loss Ratio (MLR) Instructions
MA organizations and Part D sponsors are subject to fines and other penalties if they fail to have an MLR of at least 85%. MLR is calculated as a percentage that represents the portion of the revenue received under the contract that is used for patient care, not including administrative expenses or profit. MLR data is reported annually. 
Unsettled balances owed under MPPP will be considered administrative costs for purposes of the MLR calculation and therefore excluded from the MLR numerator. 
Monitoring and Compliance
CMS will require Part D sponsors to report information related to MPPP through Part D Event (PDE) records and new reporting requirements. (PDE reporting instructions were published in April 2024.(link) 
CMS will monitor sponsors’ performance and collect data about plan grievances and beneficiary complaints entered in the Medicare Complaints Tracking Module (CTM) to assess compliance with MPPP requirements, beneficiary protections, and overall program integrity.
CMS will assess whether to add an additional CTM category for MPPP in future years. 
Part D sponsors are expected to include MPPP in compliance programs to ensure that they are meeting program requirements. 
Audits
CMS may conduct audits of Part D sponsors’ implementation of MPPP and may request additional data collection or a site visit. 
Direct and Indirect Remuneration (DIR) Reporting Guidance
Part D sponsors are required to report drug costs and DIR associated with the Part D benefit to CMS annually.  
No changes to DIR calculations or MPPP reporting are expected. 

ADVI will continue monitoring developments and the next steps. This is a delayed release. ADVI Instant content is distributed in real-time for retainer clients. Get in touch to learn more about how we can support your commercialization, market access, and policy needs.