In a significant move aimed at curbing rising healthcare costs, the Biden administration revealed on Thursday that Medicare beneficiaries in the upcoming year stand to benefit from substantial savings on numerous medications. This development arises from a newly enacted federal law designed to penalize pharmaceutical companies that escalate drug prices at a pace exceeding the inflation rate.
Officials overseeing Medicare, the pivotal federal health program catering to individuals aged 65 and above, unveiled a comprehensive list including 48 medications. Among these are crucial treatments such as blood thinners, antibiotics, and cancer medications administered within the confines of a medical practitioner’s office, clinic, or hospital.
Biden Spotlights Medicare Values, Advocates for Affordable Prescription Medications
The forthcoming adjustments, slated to take effect on January 1, promise potential savings ranging from $1 to an impressive $2,786 per dosage. The extent of these savings is contingent upon the particulars of an individual’s coverage.
Traditionally, Medicare enrollees bear a 20% coinsurance responsibility for medications administered by healthcare professionals. However, the Biden administration emphasized that the repercussions of inflation-related penalties will result in a reduction exceeding 50% for five specific drugs. Noteworthy among these are the blood thinner argatroban, the chemotherapy agent bortezomib, and antibiotics cefepime, meropenem, and vancomycin. A detailed inventory of the impacted drugs is available for review.
Effective from January 1 to March 31, 2024, the groundbreaking Inflation Reduction Act signed by President Biden mandates pharmaceutical companies to pay rebates to Medicare if the prices of prescription drugs surge beyond the inflation rate for specific drugs provided to Medicare beneficiaries. This novel inflation rebate is applicable to Medicare Part B rebatable drugs, encompassing single-source drugs, biological products, and certain biosimilar biological products, commencing January 1, 2023.
The federal government is set to bill drug manufacturers for Part B inflation rebates for the years 2023 and 2024 no later than the fall of 2025. These rebates will be allocated to the Medicare Trust Fund. Furthermore, starting April 1, 2023, individuals with Medicare may witness reduced out-of-pocket costs for certain Part B drugs and biologicals with prices that outpace the inflation rate. For these specific drugs, the beneficiary coinsurance will amount to 20% of the inflation-adjusted payment, proving to be less than the regular coinsurance.
Every quarter, the Centers for Medicare & Medicaid Services (CMS) releases payment information for separately payable Part B drugs, including those subject to coinsurance adjustments. The details are accessible to the public through the Medicare Part B Quarterly Sales Pricing (ASP) files on CMS.gov. The January 2024 ASP public files will feature coinsurance adjustments for specific Part B rebatable drugs as mandated by the Inflation Reduction Act, and the impacted drugs may change quarterly.
Medicare Values Steer Towards Affordable Prescription Drugs for Seniors
During the period from January 1 to March 31, a total of 48 Part B rebatable drugs, identified by 49 Healthcare Common Procedure Coding System (HCPCS) codes, will have adjusted coinsurance rates based on the inflation-adjusted payment amount. Beneficiaries under Traditional Medicare and Medicare Advantage using these drugs may experience a reduction in coinsurance expenses for this particular quarter, depending on their other health coverage.
As part of its routine process, CMS typically releases ASP public files weeks before the quarter takes effect, allowing the public to review and report any potential discrepancies to CMS. Occasionally, these public files might undergo corrections or updates, commonly referred to as restatements, based on post-publication feedback. In the event that CMS receives feedback necessitating updates to the list of drugs with adjusted coinsurance amounts, the list will be promptly revised. The ASP public files for January 1 to March 31, 2024, may be subject to updates either before the quarter begins or afterward if new data becomes available.