CMS Announces New Part D Payment Modernization Model

January 23, 2019


On Friday, January 18, 2019, the Centers for Medicare and Medicaid Services (CMS) Innovation Center released a new Part D Payment Modernization Model.

Last year, the Trump Administration released the President’s Blueprint to Lower Drug Prices and Reduce Out of Pocket Costs. The new Part D model is one more development that flows from that overall plan.  It is a five-year model that CMS expects to begin in 2020 and is intended to create new incentives for plans, patients and providers to choose drugs with lower list prices to address rising costs in Part D.  CMS will encourage plans to take additional risk for spending in the catastrophic phase of Part D.  CMS will establish a spending target for participating plans and plans will share in savings/losses in comparison to that target. CMS will be accepting applications through March 1, 2019; the request for applications has not yet been posted.

More information is available on the demonstration model webpage.


For more information visit the McDermottPlus Payment Innovation Resource Center or contact Sheila Madhani at 202-204-1459 or John Warren 202-204-1451.


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