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Medicare Prescription Drug Rebate Rule

Summary: The Medicare prescription drug rebate rule is a recent policy that comes from the Inflation Reduction Act of 2022. It’s designed to lower the costs of prescription drugs under Medicare Part B. Learn more about how this rule affects you if you’re prescribed one of the drugs listed here. Estimated Read Time: 3 mins

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Table of Contents:

    1. What is the Medicare Prescription Drug Rebate Rule?
    2. Which Drugs Are Eligible for the Drug Rebate Penalty?
    3. Adjustments to Drug Coinsurance
    4. How to Get Help With Medicare Prescription Drug Rebates

The Inflation Reduction Act of 2022 is a comprehensive legislative package encompassing healthcare, tax, and climate change provisions. The law introduces measures to decrease drug spending by the federal government and lower prescription drug costs for individuals enrolled in Medicare.

On September 13, 2023, the Department of Health and Human Services (HHS) announced the latest set of Medicare Part B covered prescription drugs to be impacted by provisions made within this legislation. This list will be updated each quarter to add or remove drugs based on the manufacturer’s compliance with the pricing standards. These provisions allow for lower drug coinsurance on these specific drugs due to high manufacturer price increases over the allotted limit.

Below we review the implications of the Inflation Reduction Act and how you may be affected if prescribed one of the qualifying drugs.

What is the Medicare Prescription Drug Rebate Rule?

The Medicare prescription drug rebate rule requires drug manufacturers to pay rebates (or penalties) to Medicare if they increase the cost of drugs used by Medicare beneficiaries at a higher rate than inflation. This rebate will lessen the coinsurance amount required by the Medicare enrollee when receiving a drug covered by Medicare Part B.

The first Medicare inflation rebate provision used 2021 as the baseline year for determining price changes relative to inflation. From there, the average inflation rate will determine which drugs are eligible for the penalty.

If prescribed an eligible drug, your typical 20% Medicare Part B copayment amount will be reduced.

Which Drugs Are Eligible for the Drug Rebate Penalty?

The latest set of adjusted drugs is comprised of 34 medications from several manufacturers. If you receive any of these 34 prescription drugs, your out-of-pocket costs will reduce beginning October 1, 2023. On average, seniors prescribed a medication eligible for a rebate will save anywhere from $1 to as much as $499 per dose.

In addition to imposing a penalty on companies for raising their prices more quickly than inflation, this Medicare drug rebate rule steers other companies from doing the same to curb excessive drug price increases year after year.

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According to a recent HHS study, 1,200 prescription drugs increased their prices more quickly than inflation in 2021. The goal of the rebate rule is to reduce this number significantly and reduce spending on drugs for Medicare enrollees.

The 34 drugs impacted include:

  • Adcetris
  • Aggrastat
  • Akynzeo
  • Atgam
  • Bicillin CR
  • Bilillin L-A
  • Blincyto
  • Chirhostim
  • Cresemba
  • Crysvita
  • Fragmin
  • Humira
  • Hypertet
  • Imlygic
  • Infugem
  • Leukine
  • Lupron Depot-PED
  • Minocin
  • Nipent
  • Nplate
  • Oncaspar
  • Padcev
  • Panhematin
  • Pemetrexed
  • Romidepsin
  • Rybrevant
  • Signifor LAR
  • Sotalol
  • Sylvant
  • Synribo
  • Vabomere
  • Vectibix
  • Xiaflex
  • Zemdri

Adjustments to Drug Coinsurance

Traditionally, Medicare Part B coinsurance is 20% of the total bill once the Part B deductible has been met. This means you must pay 20% of the costs out-of-pocket. The Medicare prescription drug rebate rule lessens this coinsurance amount for anyone receiving a qualifying drug.

Coinsurance amounts for these 34 drugs range from as low as 11.892% to 19.990%. Depending on the amount of inflation, the drug price was increased. The chart below reveals each drug and its coinsurance amount for 2023.

Drug Name (Manufacturer) Adjusted Coinsurance Amount (Typically 20%)
Adcetris 19.8%
Aggrastat 19.7%
Akynzeo 17.9%
Atgam 16.8%
Bicillin CR 17.7%
Bilillin L-A 17.5%
Blincyto 19.5%
Chirhostim 19.3%
Cresemba 19.9%
Crysvita 19.7%
Fragmin 13.2%
Humira 19.9%
Hypertet 19.2%
Imlygic 19.8%
Infugem 19.7%
Leukine 19.7%
Lupron Depot-PED 19.9%
Minocin 18.8%
Nipent 19.6%
Nplate 19.9%
Oncaspar 19.4%
Padcev 19.2%
Panhematin 19.5%
Pemetrexed 13.6%
Romidepsin 19.5%
Rybrevant 19.9%
Signifor LAR 17.9%
Sotalol 19.7%
Sylvant 19.1%
Synribo 19.4%
Vabomere 19.6%
Vectibix 19.8%
Xiaflex 19.9%
Zemdri 19.7%

How to Get Help With Medicare Prescription Drug Rebates

If you receive any of the drugs listed above in an outpatient setting, you will notice a decrease in your out-of-pocket spending in the coming months. For beneficiaries looking to cut out-of-pocket costs, additional coverage options are available to help cover the cost of Medicare Part B coinsurance.

For individuals who wish to reduce their healthcare spending, Medicare Supplement plans and Medicare Part D prescription drug plans may be able to help reduce costs. Complete our online rate form or contact us at the number above to review plan options in your area, check your eligibility, and compare your options today.

Sources

MedicareFAQ is dedicated to providing you with authentic and trustworthy Medicare information. We have strict sourcing guidelines and work diligently to serve our readers with accurate and up-to-date content.

  1. 34 Medicare Drugs With Price Increases Above Inflation Face Penalties. Accessed September 2023.
    https://www.aarp.org/politics-society/advocacy/info-2023/medicare-drugs-price-hikes-inflation.html
  2. How Will the Prescription Drug Provisions in the Inflation Reduction Act Affect Medicare Beneficiaries?, KFF. Accessed September 2023.
    https://www.kff.org/medicare/issue-brief/how-will-the-prescription-drug-provisions-in-the-inflation-reduction-act-affect-medicare-beneficiaries/
  3. Fact Sheet: Medicare Prescription Drug Inflation Rebate Program Part B Rebatable Drug Coinsurance Reduction. Accessed September 2023.
    https://www.cms.gov/files/document/fact-sheet-part-b-rebatable-drug-coinsurance-reduction.pdf
  4. Reduced Coinsurance for Certain Part B Rebatable Drugs under the Medicare Prescription Drug Inflation Rebate Program. Accessed September 2023.
    https://www.cms.gov/files/document/reduced-coinsurance-part-b-rebatable-drugs-oct-dec-2023.pdf
Kayla Hopkins

Kayla Hopkins

Content Editor
Kayla Hopkins is an accomplished writer and Medicare educator serving as the Editor of MedicareFAQ.com. Upon completing her Communications degree from Ohio University, Kayla dedicated her time to understanding the ever-evolving landscape of healthcare. With her extensive background as a Licensed Insurance Agent, she brings a wealth of knowledge and expertise to her writing.
Ashlee Zareczny

Ashlee Zareczny

Compliance Manager
Ashlee Zareczny is the Compliance Manager for MedicareFAQ. As a licensed Medicare agent in all 50 states, she is dedicated to educating those eligible for Medicare by providing the necessary resources and tools. Additionally, Ashlee trains new and tenured Medicare agents on CMS compliance guidelines. Ashlee is a Medicare expert who specializes in Medicare Supplement, Medicare Advantage, and Medicare Part D education.

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