With the upcoming implementation of the Medicare Prescription Payment Plan (MPPP) beginning in 2025, Part D plans have been preparing for the financial and operational impacts of the program, along with other requirements set by the Centers for Medicare & Medicaid Services (CMS). 

Financial Risk

Increased patient affordability due to the MPPP and $2,000 out-of-pocket cap in 2025 may lead to higher utilization for some enrollees. Part D plans will also assume new risk from beneficiaries who do not repay amounts owed under the MPPP. Although plan sponsors included assumptions related to induced utilization and bad debt in their 2025 bids to CMS, there was likely uncertainty in these estimates given the newness of the program for 2025. While these financial risks are largely unknown for the initial implementation year, plans will likely be able to better predict these risks in the future as they gain more experience with the program. 

Operational and Administrative Considerations

Part D sponsors are adapting their billing and claims adjudication systems to meet MPPP requirements. This includes modifying billing systems to comply with monthly payment calculations and ensuring accurate and timely reconciliation of payments. Plans will also face new administrative burdens and costs due to program requirements set in statute and established by CMS through guidance. These requirements include identifying enrollees “likely to benefit” from the MPPP before and during the plan year, processing program elections within 24 hours during the plan year, and updating or creating new paper and electronic materials for outreach and education efforts. Many of these new requirements will need to be completed before the end of the 2025 Annual Election Period on December 7, so Part D sponsors will need to work quickly to adjust internal systems and processes. 

Outreach and Education

As finalized in CMS guidance, plans are required offer education about MPPP to all enrollees, with targeted outreach to those deemed “likely to benefit”. Plan materials should be updated to incorporate information about the MPPP and systems should be adapted to appropriately identify “likely to benefit” enrollees. In addition, Part D plans may also consider developing other education and outreach materials for pharmacies and providers to support program compliance and broader education on the MPPP.  

Dive Deeper

With implementation of the MPPP for 2025, Part D plan sponsors will need to continue preparing for the program and ensure compliance with CMS requirements. For support in navigating the changing Medicare Part D landscape, connect with us.  

This Insight is part of a broader series in which Avalere explores how the MPPP will reshape the landscape for Part D stakeholders, including patients and patient groups, manufacturers, and pharmacies and other providers.