This brief provides a detailed look at the improvements in Medicare benefits, changes to payments for providers and Medicare Advantage plans, various demonstration projects and other Medicare provisions in the law. It includes a timeline of key dates for implementing the Medicare-related provisions in the law.
2010 Medicare Part D Program Compared to 2009, 2008 and 2007
Reference-Based Pricing – Under these programs, sponsors may require enrollees to pay a defined cost-sharing amount plus supplemental cost-sharing based on the differential in cost between the drug being dispensed and a lower-cost preferred alternative such as a generic equivalent. In contract year 2009, fewer than 10% of Part D contracts used reference-based pricing. Given the complexity of reference-based pricing formulas, it is very difficult to accurately convey the extent of expected out-of-pocket spending for formulary drugs subject to reference-based pricing. For this reason, CMS has been unable to have the Medicare Prescription Drug Plan Finder (MPDPF) calculate correct pricing for drugs subject to reference-based pricing, which may distort projections of out-of-pocket expenditures for some beneficiaries and significantly affect their ability to compare cost-sharing obligations under different plans and choose the plan that best meets their needs. Based on CMS’ experience and the increased complexity, CMS has observed with these programs, CMS will eliminate the option of reference-based pricing in the Part D Prescription Benefit Program (PBP) beginning in CY 2010. The basis for this decision is CMS’ belief that reference-based pricing may be inherently misleading to beneficiaries and inconsistent with their goal of improving transparency with regard to expected beneficiary cost-sharing under the Part D program.
Medicare.gov: the official U.S. government site for Medicare