Medicare Prescription Payment Plan

For the first time, beginning in 2025, the prescription drug law, known as the Inflation Reduction Act, requires all Medicare prescription drug plans (Medicare Part D plans) — including both standalone Medicare prescription drug plans and Medicare Advantage plans with prescription drug coverage — to offer enrollees the option to pay out-of-pocket prescription drug costs in the form of capped monthly payments instead of all at once at the pharmacy.

Timeline: Medicare Prescription Payment Plan Implementation (PDF) (February 29, 2024)

Medicare Prescription Payment Plan Part One Guidance

Part one guidance on the Medicare Prescription Payment Plan outlines requirements for Medicare Part D plan sponsors on operational topics such as identifying Medicare Part D enrollees likely to benefit from the program, the opt-in process for Part D enrollees, program participant protections, and the data collection needed to evaluate the program. These requirements apply to the first year of the program, 2025. 

CMS released draft guidance on August 21, 2023, for public comment and published the final guidance on February 29, 2024. 

Fact Sheet: Medicare Prescription Payment Plan Final Part One Guidance (PDF) (February 29, 2024)

Medicare Prescription Payment Plan Final Part One Guidance (PDF) (February 29, 2024)

Medicare Prescription Payment Plan Draft Part One Guidance (PDF) (August 21, 2023)

Summary and Sample Calculations technical memo (PDF) (July 17, 2023)

Medicare Prescription Payment Plan Part Two Guidance

Part two guidance on the Medicare Prescription Payment Plan outlines requirements for Medicare Part D plan sponsors on topics related to outreach and education, pharmacy processes, and operational considerations. These requirements apply to the first year of the program, 2025.

CMS is voluntarily soliciting comment on this draft part two guidance. Please send comments pertaining to this draft guidance to PartDPaymentPolicy@cms.hhs.gov with the subject line “Medicare Prescription Payment Plan Guidance – Part Two.” Comments received by March 16, 2024 will be considered. CMS will issue final part two guidance in summer 2024 after considering the public comments received in response to this draft part two guidance.

Medicare Prescription Payment Plan Draft Part Two Guidance (PDF) (February 15, 2024)

Fact Sheet: Medicare Prescription Payment Plan Draft Part Two Guidance (PDF) (February 15, 2024)

Changes to TrOOP Cost and Calculation of Maximum Monthly Cap Technical Memo (April 25, 2024)

Information Collection Requests (ICRs) for the Medicare Prescription Payment Plan