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CMS Issues Advance Notice of CY 2009 Part D Payment Policies

 

Email Alert

March 21, 2008
By Tricia Asaro and Erin Kate Calicchia*

On February 22, 2008, the Centers for Medicare & Medicaid Services (CMS) issued an advance notice (Advance Notice) of methodological changes for calendar year (CY) 2009 relating to Part D payment policies and changes to the Medicare Advantage (MA) capitation rates.

The Advance Notice contains five attachments: Attachment I shows the preliminary estimates for the national per capita MA growth percentage component of the minimum percentage increase; Attachment II sets forth the changes in payment methodology for CY 2009 for original Medicare benefits; Attachment III contains the changes in payment methodology for CY 2009 for Part D benefits; Attachment IV presents the preliminary CMS-HCC risk adjustment factors; and Attachment V has the annual adjustment for 2009 to the Medicare Part D benefit parameters for the defined standard benefits. CMS will announce the MA capitation rates on Monday, April 7, 2008.

The following is a summary of the Part D changes in the Advance Notice.

Part D Benefit Parameters

In accordance with the Part D statute, CMS must update annually the statutory parameters for the defined standard Part D prescription drug benefit. For CY 2009, the following Part D benefit parameters will increase by 7.54%:

  • The deductible, initial coverage limit, and out-of-pocket threshold for the defined standard benefit;
  • Minimum copayments for costs above the annual out-of-pocket threshold;
  • Maximum copayments below the out-of-pocket threshold for certain low-income full subsidy eligible enrollees;
  • The deductible for partial low-income subsidy (LIS) eligible enrollees; and
  • Maximum copayments above the out-of-pocket threshold for partial LIS eligible enrollees.

Because the cost threshold and cost limit for qualified retiree prescription drug plans are updated after 2006 in the same manner as the deductible and out-of-pocket threshold for the defined standard benefit, the cost threshold and cost limit for qualified retiree prescription drug plans will also increase by 7.54% from their 2008 values.

Dual Eligible Enrollees

The Part D statute also requires an update on the maximum copayments below the out-of-pocket threshold for full benefit dual eligible enrollees with incomes that do not exceed 100% of the Federal poverty line. For CY 2009, these maximum copayments will increase by 3.18% from their 2008 values.

Read the Advance Notice.

*We would like thank Tricia Asaro, Esquire, and Erin Kate Calicchia, Esquire (Greenberg Traurig LLP, Albany, NY) for writing this email alert.

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