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CMS Issues Proposed Rule Allowing Part D Drug Plans to Reduce Premiums for Low Income Enrollees

 

Email Alert

January 9, 2008
By Lena Robins*

On January 3, 2008, the Centers for Medicare & Medicaid Services (CMS) released a proposed rule that will allow Part D drug plan sponsors that bid above the premium subsidy benchmark to offer zero-premium coverage to low-income beneficiaries already enrolled in their plans. The proposed rule was published in the Federal Register on January 8. 73 Fed. Reg. 1301. CMS will accept comments on the proposed rule through March 10, 2008, and the final rule is expected to be issued so that the final policy can be included in the Part D rate announcement scheduled for April 7, 2008. This will provide Part D sponsors with time to account for this policy as they calculate their Part D bids, which are due on June 2, 2008.

The CMS press release accompanying the proposed rule explained that CMS is "seeking comment on a means of reducing the number of beneficiaries subject to random reassignment while maintaining the integrity of the annual bid process. We expect changes adopted in the final rule to be effective in the 2009 benefit year."

The proposed rule will allow Part D prescription drug plans (PDPs) to offer separate premium amounts for low-income beneficiaries in an effort to assure each Part D region has at least five PDP sponsors with premiums at or below the premium subsidy amount. The proposed rule applies only to PDPs and only to beneficiaries eligible for the full low-income subsidy (LIS). In addition, the proposed rule would minimize the number of LIS eligible beneficiaries reassigned to new plans each year because of plan bids that exceed the benchmark.

CMS said in the proposed rule that it would retain the current reassignment policy but would allow some PDP sponsors to reduce premiums to the subsidy amount for LIS eligible beneficiaries. However, plan sponsors would be limited to the amount premiums could be reduced to reach the benchmark amount.

To be eligible to offer the lower premiums, PDP sponsors would be required to notify CMS at the time of their bid submissions that they were electing the option.

Access the proposed Rule.

Access the CMS press release accompanying the proposed rule.

*We would like thank Lena Robins, Esquire (Foley & Lardner LLP, Washington, DC) for writing this email alert.

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