Inflation Reduction Act Medicare Programs

In August 2022, President Biden signed the Inflation Reduction Act of 2022 (P.L. 117-169) into law. The Inflation Reduction Act aims to improve Medicare by expanding benefits, lowering drug costs, and improving the sustainability of the Medicare program for generations to come. Below is information regarding the Medicare Drug Price Negotiation Program (MDPNP) and the Medicare Prescription Payment Plan (MPPP), which were both established under the Inflation Reduction Act. The information below provides broad overviews of the programs, pharmacy process changes, and additional resources.


Medicare Drug Price Negotiation Program
Starting January 1, 2026, the Medicare Drug Price Negotiation Program is a new program required under the Inflation Reduction Act, under which Medicare negotiates drug prices directly with manufacturers for certain high-expenditure drugs under Part B and Part D.

Highlights:

1. Medications Negotiated 
   • 10 Part D medications in 2026
   • Up to an additional 15 Part D drugs in 2027
   • Up to an additional 15 Part B and Part D drugs in 2028
   • Up to an additional 20 Part B and Part D drugs in 2029 and subsequent years
2. Pharmacy Impacts  
   • Pharmacy cashflow may be affected by refund window.
   • Medication refunds are negotiated at the Maximum Fair Price (MFP) by CMS.
   • Pharmacies must enroll in the Medicare Transaction Facilitator (MTF) if they intend to dispense negotiated drugs under Part D.

Key Points for Pharmacists:

• Submitted claims are processed through the MTF and refunded at the MFP by manufacturers within 14 days of receiving claims data, which may delay cashflow.
• There are 10 drugs under Part D that CMS has negotiated for 2026.
  • View the factsheet HERE.
• MFP refund status and resolution tools can be accessed using the third-party Beacon MFP platform.

Pharmacy Process Changes:

• Required to enroll in the MTF if dispensing medications under Part D.
• Pharmacies can indicate that they have cashflow concerns when enrolling in the MTF and may be able to utilize the mitigation strategies manufacturers have developed.
• The MTF will pull claims data that pharmacies submit to plans.
• Claims can be processed by the MTF even if pharmacies are not yet enrolled, but refunds may be delayed.

Additional Resources:

• Guidance and Policy Documents (CMS)
• Selected Drugs and Negotiated Prices (CMS)
• Medicare Transaction Facilitator General Resources (CMS)
• Pharmacy and Dispensing Entity Resources (CMS)
• Public Engagement Events (CMS)
• MTF Help Desk (CMS)
• Beacon MFP (Second Sight Solutions, LLC)

Medicare Prescription Payment Plan 
Starting January 1, 2025, the Medicare Prescription Payment Plan is a new program required under the Inflation Reduction Act, under which Part D sponsors must provide enrollees the option to pay out-of-pocket prescription drug costs in the form of monthly payments over the course of the plan year, instead of all at once at the pharmacy.

Highlights:

1. New Out-of-Pocket Cost Limit
   • Patients will pay no more than $2,000 annually for all brand-name and generic prescriptions.
2. Medicare Prescription Payment Plan (MPPP)
   • Optional program allowing patients to spread prescription costs over the year.
   • Patients enroll directly through their Medicare plan, not at the pharmacy.
   • Enrolled patients pay $0 at the pharmacy counter for covered Part D drugs; pharmacies will be reimbursed by Medicare Part D plans.

Key Points for Pharmacists:

• You will be notified by a Part D Sponsor if a patient is not enrolled and has a single Rx cost of $600 or more.
• You must provide these patients with the "Medicare Prescription Payment Plan Likely to Benefit Notice."
  • Download HERE.
• Unique BINs/PCNs beginning with "MPPP" will be used for processing payments.
• Reimbursement will be received within 14 days for electronic claims.

Patient Counseling Tips:

• Explain that MPPP enrollment is optional and done through their Medicare plan.
• Highlight that the program may benefit those with high early-year costs or who take specialty medications.
• Remind patients they can opt-out at any time.

Pharmacy Process Changes:

• Submit claims using the Unique MPPP BIN/PCN for enrolled patients.
• Process any other health insurance before billing MPPP.
• Reverse and reprocess eligible claims for new MPPP participants.

Additional Resources:

• **Infographic: Medicare Prescription Payment Plan (Credit: PSW/NASPA)
• Medicare Prescription Payment Plan (CMS)
• Fact Sheet: Medicare Prescription Payment Plan (CMS)
• What’s the Medicare Prescription Payment Plan? (Medicare)
• Fact Sheet: What’s the Medicare Prescription Payment Plan? (Medicare)
  • For Patients:
    • What to know before participating (Medicare)
    • Will this payment option help me (Medicare)
    • What to know if I'm participating (Medicare)