Part D Payment Modernization Model

The CMS Center for Medicare and Medicaid Innovation (CMMI) announced a new model to modernize Medicare Part D.  Designed to go into effect in 2020, the model will be a voluntary, five-year test to measure the impact of better aligning Part D plan sponsor liability with costs paid by CMS and Medicare beneficiaries. The aim of the test is to decrease Part D costs by: (1) introducing two-sided risk when it comes to catastrophic costs, and (2) providing flexibility in current programming, including beneficiary reward and incentive programs. 

The test will be open to both Prescription Drug Plans (PDPs) and Medicare Advantage Prescription Drug Plans (MA-PDs) nationwide.  However, parent organizations must participate fully at the Part D region level. Participation will be competitive, and CMS is only offering the one opportunity in 2020 to participate. The deadline for intent to apply is March 15, 2019.