Medicare Prescription Payment Plan: Member Communication Provisions of the M3P Part 2 Draft Guidance

Starting in 2025, all Medicare Part D enrollees can choose to spread their out-of-pocket prescription drug costs over monthly payments instead of paying the amount upfront. As a result, enrollees may pay $0 at the pharmacy and receive monthly bills from their Part D plan.

The program targets individuals with high early-year costs, but anyone with Part D can participate.

CMS released the draft guidance explaining the program in two parts. The organization released Part 1 of the Medicare Prescription Payment Plan (M3P) in August 2023, which focused in part on M3P billing and delinquency management. CMS expects to finalize that guidance in early 2024.

CMS released Part 2 of the Medicare Prescription Payment Plan Guidance on February 15, 2024. It focuses on plan sponsors’ role in enrollee education, outreach and communications, pharmacy processes, and operational guidance around bidding, MLR ratios, compliance monitoring, audits, and reporting.

Here’s an overview of the member communication provisions of Part 2 of the M3P draft guidance.

An Overview of Member Communication Provisions of the M3P Part 2 Draft Guidance

Outreach, Education, and Communications Requirements

CMS aims to integrate Medicare Prescription Payment Plan member communications into the existing Medicare communication process as much as possible. As a result, the organization will enhance the following communications with Medicare Prescription Payment Plan information:

Membership ID Card Issuance

Plan sponsors must issue new Medicare Part D enrollees a hard copy member ID card within ten days of enrollment. Beginning in 2025, plan sponsors must include information about the Medicare Prescription Payment Plan and an M3P election request form with the Membership ID card. CMS recommends plan sponsors use the model educational product that CMS will release.

Evidence of Coverage (EOC)

Plan sponsors must provide Evidence of Coverage annually to enrollees and also deliver it to new enrollees after enrollment. In addition to the detailed description of plan benefits, covered services, and rights, the 2025 EOC will include educational information about the M3P. CMS will update the model EOC in spring 2024.

Annual Notice of Change (ANOC)

Plan sponsors typically send the Annual Notice of Change to enrollees annually by September 30th. It outlines changes in costs, coverage, and benefits for the upcoming year. CMS will release an updated model ANOC in spring 2024 and include M3P educational language.

Explanation of Benefits (EOB)

CMS advises plan sponsors to include information about the Medicare Prescription Payment Plan language in the EOB. It published a model EOB in December with a 30-day comment period. CMS expects to publish a final EOB in the spring of 2024. Below is the draft model EOB with the M3P language.

Sponsor Websites

Part D plan sponsors must have a publicly available website with plan coverage, benefits, premiums, cost-sharing, conditions and limitations, and other information. CMS is also requiring plan sponsors to include the following information on their websites:

• An overview of the program; 
• Examples of how the program calculation works with easy-to-understand explanations. CMS encourages Part D sponsors to include a few examples of cost-sharing scenarios that demonstrate when the program would and would not benefit a Part D enrollee; 
• A description of who is likely to benefit; 
• The financial implications for the enrollee of participating in the program, including that the program is free to join, there are no fees or interest charged under the program, and the program does not reduce the amount of cost-sharing a participant owes for their Part D prescriptions. CMS encourages Part D sponsors to include information about the $2,000 Medicare Part D out-of-pocket cap in 2025; 
• The importance of paying monthly bills, including the implications of not paying monthly bills; 
• A description of how to opt into and out of the program, including timing requirements around election effectuation; 
• A description of the standards for urgent Medicare Prescription Payment Plan Election, as described in the draft part one guidance; 
• A description of how Part D enrollees can file complaints and grievances related to the program; 
• Contact information that Part D enrollees can use to obtain further information; and 
• General information about the Low-Income Subsidy (LIS) program, including information on recent LIS expansion of eligibility, and how to apply and enroll in the LIS program (as an additional or alternative avenue for addressing prescription drug costs), noting that LIS enrollment, for those who qualify, is likely to be more advantageous than participation in the Medicare Prescription Payment Plan. 

Plans may use language from the CMS educational product and other resources to drive the language displayed on the website. Plan sponsors can also link to CMS information.

Targeted Communications

CMS also aims to increase enrollment in the M3P by targeting those who are most likely to benefit from the program. That targeted outreach includes:

Likely to Benefit Notice in Advance of Plan Year

In advance of a new plan year, plan sponsors must communicate with enrollees who meet the criteria to be likely to benefit from the M3P program. How it will work:

• In the fourth quarter, plan sponsors must review claims history from the first three quarters to determine which enrollees are likely to benefit.
• Plan sponsors must send enrollees likely to benefit from the M3P program the Likely to Benefit Notice no later than the end of open enrollment, Dec. 7. 
• Plans can send the notice electronically or by mail, depending on the enrollee’s preference and authorization.
• CMS recommends plan sponsors include the CMS educational product

Likely to Benefit Notice During the Plan Year

Plan sponsors must notify enrollees during the plan year if they incur an out-of-pocket cost above the point-of-sale notification threshold. For example, if the plan uses prior authorization processes for drugs that cost above the point-of-sale notification requirements, then the plan must perform outreach to the enrollee about the Medicare Prescription Payment Plan. This applies only if the enrollee is not already enrolled in the M3P program and if it’s not the last month of the year, in which the enrollee would see no benefit from the program.

CMS has not set the specific out-of-pocket threshold but expects to publish it with the final part one guidance.

Likely to Benefit at Point of Sale (POS)

Part D Sponsors must notify the pharmacy when an enrollee’s out-of-pocket costs exceed the M3P out-of-pocket threshold. CMS requires the pharmacy to provide the Likely to Benefit Notice. The organization encourages plans to provide additional educational information, like the CMS-developed educational information, to pharmacies. CMS likewise advises pharmacies to deliver educational information, but it is not required.

Election and Termination Communication Requirements

In addition to outreach, communication, and education requirements, plans must send election and termination-related communication to enrollees. Those requirements include: 

Medicare Prescription Payment Plan Participation Request Form

As previously mentioned, CMS is creating a Medicare Prescription Payment Plan Participation Request Form that can be used to enroll members in the plan. CMS is currently developing that form.

Notice of Acceptance of Election

Enrollees can enroll using paper forms, by telephone, and through a website. After the Part D sponsor has accepted that request, it must communicate to the enrollee that their enrollment has been effectuated. If the enrollee enrolls before the plan year, the plan must send a written notice. If they enroll during the plan year, plans must call the member and send a written notice within three days of completing the telephone notice.

To help with these required communications, CMS is creating a sample Notice to Acknowledge the Acceptance of Election. CMS will finalize the notice this summer.

Failure to Pay Notice

CMS is also developing a model Notice of Failure to Pay to be sent after an M3P participant has failed to pay a monthly billed amount. This notice is sent within 15 days of the payment due date.

Termination Notice

If the enrollee fails to pay the monthly bill after the conclusion of the grace period, plans must send a Notice of Termination of election. Plans should send this notification within 3 days of the payment failure. CMS plans to release a sample of this communication in the summer of 2024.

Voluntary Termination Notice

Plan sponsors must allow M3P enrollees to voluntarily exit the program at any time. Plan sponsors cannot demand payment of the entire balance, though the enrollee may choose to pay the full amount. 

CMS requires plan sponsors to send a notification – called the Notice of Voluntary Termination – within 10 days of receipt of the voluntary termination. Like other communications, CMS expects to release a sample of this notification in the summer of 2024.

CMS encourages plans to leverage language from this notification when an M3P enrollee disenrolls from a Part D plan – and thus voluntarily terminates from the M3P program.

Language Requirements

CMS also noted in the M3P Part 2 draft guidance that Medicare Advantage requires plans to offer translated materials in any language that is the primary language of at least 5% of individuals in a plan benefit package service area. That applies to the communications spotlighted earlier in this post.

Certifi’s Medicare Prescription Payment Plan billing and payment solutions help Part D plan sponsors and PBMs save time and improve M3P billing accuracy.