Forbes: New Reinsurance Model in Medicare Part D

“The Trump Administration’s proposed changes to the drug rebate system have grabbed headlines, as rebates are integral to drug pricing and formulary management. But, a slew of proposals slated for implementation later this year and in 2020, along with changes that have already been enacted are poised to shake up the pharmaceutical supply chain. Here, the Administration continues to exploit key features of the 2010 Affordable Care Act, namely its creation of the Center for Medicare and Medicaid Innovation (CMMI), to drive changes in price-setting and insurance coverage. CMMI establishes a platform for CMS to experiment with new approaches intended to lower costs and improve health outcomes.”

“Last month, the Administration unveiled a proposed Medicare pilot program aimed at establishing conditions under which Medicare Part D plans could “negotiate lower drug prices.” The Centers for Medicare and Medicaid Services (CMS) is proposing a voluntary, 5-year model that would target rising reinsurance costs in Part D. It would run from 2020 to 2024. The pilot would increase plans’ share of costs in the catastrophic coverage phase of the pharmacy benefit from 15% to 80%. Participating plans would be issued…” Read the full article here.

Source: New Reinsurance Model In Medicare Part D – By Joshua Cohen, February 11, 2019. Forbes.

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