Updates to Biologics, COVID-19 and Medicare Part D: What You Need to Know

Spring has sprung and so have the announcements from Centers for Medicare and Medicaid Services (CMS). The month of March saw a flurry of activity regarding the Inflation Reduction Act (IRA) in terms of coinsurance for rebatable drugs and biologics; the soon-to-be end of the COVID Public Health Emergency; and changes to Medicare Part D drug benefits for calendar year 2024.

The following describes the announcements, how they impact Medicare prescription drug benefits and how Elixir is preparing for these changes.

Inflation Reduction Act impacts patient coinsurance for rebatable drugs and biologics

On March 15, 2023, CMS released the most-recent quarterly Average Sales Price (ASP) public use file, which will be in effect April 1–June 30, 2023. CMS also published an updated ASP file on March 23, 2023. The ASP file includes Medicare Part B rebatable drugs and biologics determined to exceed the inflation-adjusted payment amount. [i] The ASP file specifies inflation-adjusted coinsurance percentages for these drugs.

What this means for payers:

To meet the requirements of the IRA, Elixir updated the configuration to apply member coinsurance percentages for the rebatable drugs and biologicals. The next quarterly ASP file update will take place in mid-June 2023 and be effective July 1, 2023.

For more information on the IRA and its impact on healthcare, refer to our recent blog.

COVID-19 public health emergency ending May 11th

Based on current COVID-19 trends, the Department of Health and Human Services (HHS) announced the Public Health Emergency (PHE) and National Emergency related to COVID-19 will expire at the end of the day on May 11, 2023. With COVID cases, hospitalizations and deaths all on a significant decline, the HHS determined it was appropriate to transition away from the emergency phase. [iii]

On March 24, 2023, CMS issued the Memo, “Coronavirus Disease 2019 (COVID-19) Related Exercise of Enforcement Discretion Ending May 11, 2023.” The memo:

The memo indicates a change to CMS directives as their initial communications about the Public Health Emergency expiration appeared to allow plan sponsors the option of leaving these flexibilities in place. Many sponsors were planning to do so through the 2023 contract year to avoid actual or perceived member disruption.

With the new CMS directive, Elixir is updating configuration for all Medicare plans to terminate the COVID flexibilities effective May 12, 2023.

To communicate this mid-year change notification to our Medicare members, Elixir is following the Medicare Communication and Marketing Guidelines (MCMG), which outlined a notification deadline of April 24, 2023. Plan sponsors must determine how to notify their members of the end of COVID flexibilities. This communication can be delivered to their members either electronically or by mail, as per member request.

An exception to the new rule

If a plan submitted a bid for calendar year 2023 that reflects the COVID flexibilities, they can remain in place through the plan year. Whether they are part of your filed benefit or for other reasons, please notify your Elixir Account Manager to ensure your plan remains configured accordingly.

Calendar year 2024 Medicare Benefits reflect changes to the Part D drug benefit

The impact of the IRA is evident in the calendar year 2024 Medicare Advantage (MA) Capitation Rates and Part C and Part D Payment Policies [iv] published by CMS on March 31, 2023. Elixir is preparing the 2024 benefit configuration with these and all other updates from the Rate Announcement.

Calendar year 2024 Changes to the Part D drug benefit include:

Standard Benefits calendar years 2023 vs. 2024

Initial Coverage Limit
Out-of-Pocket Threshold
Minimum Cost Sharing in Catastrophic Coverage Portion of the Benefit
Generic/Preferred Multi-Source Drug
Not Applicable
Not Applicable

Elixir will continue to monitor these topics and all announcements from CMS and their impact to the Medicare prescription drug benefit. Please contact your designated Elixir Account Executive or Compliance Officer for more information.