Medicare Updates & Notes for Manufacturers
Last week, CMS’s Medicare team issued a series of memos for manufacturers outlining additional information for the Medicare Prescription Drug Inflation Rebate Program and Discarded Drug Refund Program, as well as the Manufacturer Discount Program. At a high level, CMS is continuing to move forward with the implementation of new statutory requirements, and manufacturers who participate in Medicare will need to keep an eye out for continuing developments. Highlights including the latest next steps required are below.
Memos
- 9/4/2024 - September 2024 Drug Manufacturer Module Enhancements (HPMS)
- 9/6/2024 - Medicare Part D Manufacturer Discount Program: Important Updates and Upcoming Deadlines
- 9/6/2024 - Medicare Part D Manufacturer Discount Program: Frequently Asked Questions
Key Dates
9/13/2024 - HPMS System enhancements released (i.e. the start date when the fields mentioned below will be available)
10/31/2024 - Manufacturer deadline to provide Compliance and Discarded Drug contacts, as well as new required data
11/1/2024 - Manufacturer deadline to submit any remaining labeler code changes (add, delete, or transfer)
12/15/2024 - Manufacturer deadline to provide Inflation Rebate Contacts
Overview
- CMS will start issuing P Codes to companies that only manufacture Part B drugs (aka physician administered drugs). This is part of the roll out of the Discarded Drug/Wastage Rebate program which impacts manufacturers of certain single-dose container or single-use package drugs.
- There will also be a way to indicate Part B drugs on existing P Codes with a new "program type" field.
- CMS will add further information, like a manufacturer’s Phase-In status, to the monthly update reports.
- Notification of updated 2025 participating labeler code list and NDC list.
- Notification of updated Manufacturer Discount Program FAQ.
Next Steps
As CMS has indicated in previous guidance, they are attempting to link Medicare Part B and Part D rebates together for operational purposes. Manufacturers should begin taking the following steps to prepare for this guidance as well as future guidance:
- Ensure your team has access to the HPMS website, and that your EUA profile is up to date. The HPMS and EUA systems are linked. If your EUA account inactivates, it will prevent you from accessing the HPMS system.
- Make sure you have all points of contact up to date. This is important to ensure receipt of HPMS updates and CMS communications, as well as for internal payment processing and forecasting.
- Review the Medicare Part B Discarded Drug data, Medicare Part B Spend data and the Medicare Part D Spend data to assess the potential impact of your rebates. Keep in mind that this data, specifically the discarded drug data, is new and will ultimately evolve over time. While this data might not be “perfect”, it is a good starting point for developing your assumptions.
- Continue to update your internal models for your current government price points and CPI-U rates. If you do have a buy-and-bill drug, you can use the ASP Drug Pricing files and the Coinsurance Percentage to see if your forecasting models for Medicare Part B align to CMS calculations. There were some errors in the first version of these files so it is always good to have a validation process.
- Align with your Finance team to determine if you need any additional accruals for these new rebates. Most manufacturers have already started to accrue for these rebates when they are applicable. You will need to run your accrual methods as well as the timing by your auditors.
Quick Thoughts
The recent CMS guidance has begun to operationalize the new Medicare rebates. Just a few of the bigger items that we will be keeping an eye out for in future updates:
- How will CMS manage the rebate process? Is CMS going to treat the Medicare Part B rebates separate from the Medicare Part D rebates? Is the Discarded Drug rebate going to be separate from the Inflation rebates? With the different data sources and the differences between pharmacy benefit and medical benefit billing data, I am hoping CMS implements separate rebate and dispute processes for each.
- Will there be a single invoice or multiple invoices? Manufacturers will need to develop processes to validate and process these new rebates. It is expected that those processes will have to account for how CMS invoices the rebates. CMS could take the Medicaid approach around Part D and build the inflation rebates into the standard rebates or they could issue one invoice for the standard rebate and a separate invoice for the Inflation rebate. While we expect the timing to be consistent, how they decide to handle invoicing will dictate how manufacturers account and accrue for the rebates.
- How will the dispute process be handled? Based on my experience with government rebates as well as some of the early rollouts of things like the Coinsurance Percentage adjustments in the ASP files, I am expecting some mistakes. Will CMS make manufacturers "pay and chase" or will they implement a Medicaid-like dispute process? Will the disputes be handled inside of a portal or will they be "flat file" disputes?
We will continue to watch for the on-going developments expected this fall, and after. We're always here to answer questions, discuss the implications of these programs and assist with operationalizing the requirements.
Published on Sept. 12, 2024 by Jenny Bulkin