Medicare Prescription Payment Plan Billing: Essential Questions for Choosing the Right Solution

Navigating the complexities of the Medicare Prescription Payment Plan (M3P) requires a robust billing solution designed for accuracy, flexibility, and efficiency. Gone are the familiar premium billing practices of Medicare Advantage plans. M3P introduces variable billing with accumulating claims throughout the year, potential retroactive adjustments, and prescribed member communications. 

When shopping for a solution, there are essential questions you need to ask vendors to ensure your chosen solution handles M3P complexities with ease. By asking the right questions, you can confidently select a solution that streamlines M3P billing and optimizes your success. Here are 15 questions to get you started:

How do you ensure billing accuracy?

Unlike the premium billing Medicare Advantage health plans perform today, the M3P requires plan sponsors to bill an accumulation of claims. Those claims will occur throughout the year. Plan sponsors may also need to make adjustments – for example, if a member signs up for low-income subsidies. Managing the variable billing M3P introduces requires billing accuracy.

When shopping, ask how a vendor will ensure the accuracy of each monthly M3P invoice. Doing so helps you understand their knowledge of the M3P requirements and how their technology may automate retroactive adjustments. For example, unlike other Medicare Prescription Payment Plan billing systems, Certifi uses an accounting architecture to improve billing accuracy. That architecture can automate retroactive adjustments by adding appropriate debit or credit adjustments, improving billing accuracy.

What payment options are available?

Though the draft regulations recommended payment options – like checks, debit and credit cards, and cash payments – they didn’t mandate multiple payment options. However, the American Cancer Society recommended in its comments about the draft guidance that CMS should require many payment options, including cash payments.

Ask about the payment options available. Can the vendor support a retail cash network, for example, that enables beneficiaries to take an invoice to a local retail store and make a cash payment? Making it easy for members to pay will improve member satisfaction while limiting write-offs.

Do you have an integrated payment portal?

Another way to simplify the payment process is through an integrated payment portal. If your vendor offers payment portal technology, you won’t need to integrate the payment platform into your existing portal technology, an important consideration given the condensed M3P implementation timeframe.

What should a payment portal include? We wrote about that in 7 Characteristics of a Great Premium Billing Payment Portal.

How do you automate delinquency management?

The draft guidance includes late payment notification and termination notice requirements. Look for solutions that integrate rule-based delinquency management that can identify who to send late payment and termination communications. 

What should integrated delinquency management look like? Here are four key delinquency management features to seek in software.

How configurable are delinquency letters?

The M3P draft guidance requires specific language in delinquency letters, including:

  • That the Medicare Prescription Payment Plan balance is delinquent;
  • The plan will terminate participation in the program if the participant doesn’t pay within the grace period;
  • The date on which that termination will occur if the participant doesn’t pay;
  • The payment amount is still due if the participant terminates;
  • An explanation of how to pay the balance due expeditiously;
  • Explain that after termination, the participant will no longer be billed monthly for out-of-pocket prescription costs but will likely need to pay at the point of sale;
  • An explanation that the participant can’t enroll in subsequent years unless they’ve paid their balance;
  • Explain that the termination is only for the Medicare Prescription Payment Plan, not the Part D plan;
  • Describe the dispute process;
  • Provide information about the LIS program and how to enroll;
  • Provide plan sponsor contact information should the participant have any questions.

Termination letters have similar prescribed language.

That required language may change over time. The ability to modify language and layout simplifies incorporating those modifications into delinquency and termination letters. Look for solutions that simplify modifying the content of delinquency communications.

Can we configure invoices?

The same applies to invoices. The M3P draft guidance also describes the data on monthly invoices, including:

  • A statement that the bill is for the Medicare Prescription Payment Program, a description of the program, and where to find additional information about the payment plan;
  • The effective date of program participation;
  • The date, amount, and means of the last payment made;
  • Any previous balance amount;
  • Itemized out-of-pocket costs for each prescription for the billing month;
  • The total amount due for the billing month;
  • The remaining total balance;
  • What happens if the participant doesn’t pay by the due date;
  • Information about the dispute process;
  • How to opt out of the program and what’s due after termination;
  • LIS program information, including how to enroll and an explanation that LIS may be more advantageous than participation in the payment plan alone;
  • Contact information should the participant have questions.

Like delinquency communications, you should seek solutions that simplify invoice design.

What reporting is available? 

To manage the M3P program, you’ll need common billing reports, like payment reports, aging reports, and suspense reports. Look for solutions with out-of-the-box reporting capabilities and the ability to create reports unique to your needs. 

Also, look for solutions that can integrate with your general ledger. You may need individual transactions or aggregated data, but whatever the case, be sure your Medicare Prescription Payment Plan billing solution can send a data feed to your general ledger.

What’s your single sign-on capability?

Whether your members need to access the billing solution’s payment portal or your staff accesses the administrative application, ensuring the solution supports single sign-on (SSO) not only streamlines the user experience but also simplifies credentials management, limiting potential attack vectors.

How do payments get applied?

Applying payments to accounts, especially with multiple payment methods, can be time-consuming. Throw in that beneficiaries may make payments for more than one account with a single check – like a husband and wife – and applying those payments can be difficult. So, learn how the vendor applies payments.

At Certifi, we leverage integrations that support and automate different payment methods. Typically, we use the PCI-compliant data store managed by the payment processor to vault payment account information. Transactions are then initiated by the Certifi system for one-time or recurring batch payments, with two-way API and file-based integration to reconcile all payment transactions. Check payments are sent to the Certifi system from a commercial lockbox processor, typically a bank. A partner facilitates cash payments through a national network of retailers who accept cash payments from consumers. Records of those payments are provided electronically on a nightly basis. We can also incorporate payment application rules, further automating the payment application process. 

Can my team set up recurring payments on behalf of members?

Some Medicare Part D members may not be the most computer-savvy users. They often like to rely on your member services team for tasks like making payments or setting up recurring payments.

So, ensure that your billing solution delivers tools that enable your team to make payments and set up recurring payments on behalf of M3P enrollees. 

How do you ingest new RX claims data from enrollees?

As mentioned, the M3P differs from premium billing because it includes prescription claims data, creating a variable billing experience. As a result, health plans need to incorporate prescription data into the billing calculation while including specific data on invoices.

So, understand how your billing solution ingests that prescription data. It will likely be a file-based data exchange, though your vendor may also be able to leverage APIs to ingest data. Learn how to exchange prescription data, how frequently, and what data.

Can you identify members that are “likely to benefit?”

The M3P requires plan sponsors to send information to members likely to benefit from the plan. Though the draft guidance didn’t define who those members will be or what the communication may look like, plans need a solution that ingests claims data and determines – based potentially on single-day costs – who would likely benefit from the program.

Ask if your billing solution can ingest claims data, identify who is likely to benefit from the M3P plan based on the guidance CMS releases, and distribute that information to you.

How scalable is your technology?

Though the number of beneficiaries that will enroll in the M3P program is unknown, some requirements mean pairing Medicare Prescription Payment Plan billing with Medicare Advantage billing can be advantageous. For example, unidentified payments must be applied to premiums first. Using two distinct billing solutions and processes for M3P and premium billing may muddy that process.

Scalability may not be vital for M3P billing, but is if you choose to use the solution for premium billing. Look for solutions that can prove they scale. For example, Certifi’s solution leverages AWS auto-scaling technology to add compute resources during busy times – like generating billing transactions – and then scales down during less process-intensive times. Not only does it enable your billing processes to scale to complete faster, but it also limits costs.

How quickly can you implement a solution?

Many health plans are waiting for CMS’ finalized guidance before determining a solution. If the timeline doesn’t change, health plans will have limited time – potentially as little as four to six months – to implement a billing solution. 

Understand vendor’s timelines for features necessary to enable M3P billing. For example, if a vendor lacks delinquency management or requires development to design invoices, it’s possible that development may not finish in time. It’s likely billing solutions missing key features or custom-developed solutions are not an option given the timeframe.

How do you manage adjustments?

Finally, determine how the system manages adjustments. Whether a member’s eligibility changed or they signed up for low-income subsidies, changing the out-of-pocket cost of recently purchased prescriptions may be required.

Ask how the vendor manages adjustments. At Certifi, we’ve found that our accounting architecture that automatically balances debits and credits simplifies managing adjustments while ensuring billing accuracy. 

While the M3P presents unique billing challenges, the right solution can streamline operations and optimize success. By prioritizing accuracy, flexibility, and efficiency, you can better navigate M3P’s complexities. With careful planning and the right technology partner, you can confidently embrace M3P and meet the demanding timeline.

Certifi’s health insurance billing and payment solutions help Medicare Advantage payers improve member satisfaction while reducing administrative costs.

Navigating the Medicare Prescription Payment Plan

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