If you’re a Medicare plan, you probably already know about the Medicare Prescription Payment Plan (MPPP or MP3). You probably know it will greatly increase access to prescriptions for the average American, of which 21% said they could not fill their prescription due to out-of-pocket costs. But what does the MPPP mean for you and how your business operates?
In August 2022, Congress passed the Inflation Reduction Act. Part of the law requires that all Medicare Prescription Drug Plans (PDPs), Medicare Advantage (MA) Plans and Employer Group Waiver Plans (EGWPs) allow enrollees to spread their prescription out-of-pocket costs over the plan year. The Medicare Prescription Payment Plan begins January 1, 2025, with enrollment beginning in October 2024, so all Medicare plans need to act now to ensure they are prepared to offer payment plans to their beneficiaries.
In addition to essentially transforming Medicare plans into finance companies, the law requires plans to:
The Medicare Prescription Plan requires health plans to advance a member’s out-of-pocket costs when a prescription is filled. This means a significant impact on cashflow with frontloaded costs. It also means developing some kind of system to track monthly payments, follow up on missed bills, and manage an increase in bad debt. There will be substantial costs for developing new software and hiring and training staff to manage the workload that comes with operating a financial service business.
Plans will need to perform time-consuming outreach to inform members of the new program and help them understand how to utilize it. Members need to know how they can benefit, how their monthly payments are calculated, and how they can enroll. For Medicare plans, this may mean hiring and training new staff, generating educational materials, finding ways to keep their members informed, and handling increased customer service calls.
As plans will now have to administer payment plans, they will be subject to US Treasury and banking regulations like the Truth in Lending Act. This level of compliance is likely completely new to Medicare plans, so they will need significant investment in training and in building new compliance programs.
Beneficiaries will be able to enroll in the new Medicare Prescription Payment Plan beginning October 15, 2024. Plans have a lot to do in a very small amount of time. We will cover each of the above topics in more detail in a series of blog posts, and the information should give plans a strong understanding of the challenges in front of them.
HLTHCard is our end-to-end, turnkey solution. Using the latest technology, we’ve developed a platform with MPPP specifically in mind. It handles everything from member education and enrollment to sending bills and receiving payments while complying with healthcare and banking/payment regulations. It seamlessly integrates with existing PBMs and other ecosystem partners.
HLTHCard does all of this, saving you the time, investment, and administrative costs you will incur in transforming your business to operate as a finance company. With HLTHCard, you’ll have everything you need come October 15, 2024. Please contact us to learn more.
