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  • Writer's pictureCan Aydinova

Inflation Reduction Act & Operational Implications for Health Plans – Are You Ready?




Medicare Advantage Plan Members

  • As of 2025, MA plan members’ out of pocket cost will be limited to $2,000 MOOP who can also elect to pay for their costs through monthly installments throughout the year under the new Medicare Prescription Payment Plan (M3P).  

  • This is expected to improve drug affordability for members. Improved changes to prescription drug coverage, costs, and access to medications and is expected to increase members’ drug adherence.  

  • Members may need to adjust their pharmacy preferences or medication choices to align with the program requirements. Members will have much better insights into and informed of any changes to their plan's prescription drug coverage and how it may impact their out-of-pocket costs as a result of strict rules around member communication and outreach.


For Health Plans 

  • The operational impact of the Medicare prescription payment plan program will include changes to reimbursement structures, reporting requirements, and compliance measures.

  • Plan sponsors will need to update their systems and processes to accurately track and report prescription drug utilization and costs, as well as ensure they are in compliance with program requirements.

  • MA plans may also need to adjust their provider and pharmacy networks to ensure they are able to meet the needs of their members under the new program.

  • Plan liability under the IRA in the catastrophic benefit phase increases significantly on brand drugs due to the reduction in federal reinsurance.

  • Changes in plan benefit plan designs will be necessary to be compliant with new rules and minimize plans liabilities.

  • To minimize the impact on new liabilities, MA health plans may need to implement additional drug utilization management programs or renegotiate contracts with manufacturers and pharmacies to reduce drug costs.

  • Insurers with both Medicare Advantage Part D (MAPD) plans and Prescription Drug Plans (PDPs) may entertain merging and consolidating these plans into MAPD plans as this may enable better financial stability and ability to manage risk across benefits.

     

Some examples of key Health Plan Processes impacted are as follows: 

  • Enrollment/Opt-in/ Disenrollment

  • Fulfillment (member materials, ANOC, EEOB, etc.)

  • Billing

  • Plan benefit design and configuration (such as out-of-pocket payment plans/payment smoothing)

  • Member Outreach

  • Provider Outreach

  • Contracted Pharmacy Outreach

  • Member Management

  • Pre-Plan Year Member Identification

  • During Plan Year Member Identification including Pharmacy POS notification

  • 3rd Party Partners / Integrations

  • IRA specific Data collection and reporting


Retail Pharmacies

  • Pharmacies will need to update their systems and processes to ensure they are able to accurately report prescription drug utilization and costs to Medicare Advantage plan sponsors. They may also need to adjust their inventory and pricing to align with the program requirements and ensure they are able to continue serving members under the new program.


Healthcare Providers

  • Increased pressure to control costs: Healthcare providers will face increased pressure to control costs related to prescription drugs, as the act aims to reduce inflation in the prices of these medications. This may require providers to negotiate lower prices with drug manufacturers or seek out alternative, more affordable treatment options for patients.

  • Potential changes in reimbursement: The act may lead to changes in reimbursement rates for prescription drugs, as payers seek to lower costs and comply with the provisions of the act. Providers may need to adjust their billing practices and payment models to adapt to these changes.

  • Impact on patient care: The act could potentially impact patient care, as providers may need to make changes to treatment plans based on cost considerations. This could lead to concerns about access to necessary medications and potential disruptions in care for some patients.

  • Increased focus on value-based care: In response to the challenges posed by the act, healthcare providers may increasingly focus on value-based care approaches that prioritize the most cost-effective and clinically effective treatment options. This could lead to greater collaboration with payers and other stakeholders to improve patient outcomes while controlling costs.


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  • Deep operational experience across all Medicare Advantage business domains, processes and operations including eligibility, enrollment, benefit plan configuration, claims/appeals, provider management and provider networks, and member services.

  • Unique and field-tested services designed for rapid operational efficiency assessment, improvement, and optimization. 

  • Extensive health plan program and project delivery experiences with both commercial and government funded programs (Medicare/Medicaid)

  • Team of health plan specialists with extensive industry knowledge, operational and delivery experiences that enable us to hit the ground running and help our clients address their business problems and deliver impactful initiatives successfully, with speed and quality.


Let us help with your operational planning and delivery of critical projects in support of IRA requirements for 2025. 

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