Moving the Needle on Prescription Drug Costs: Using the Innovation Center and Other Demonstration Authority

Appendix Table 1: Examples of Demonstrations Related to Prescription Drugs

Demonstration Name

Year Description Result
Section 402
Demonstration of Improved Quality of Care for Cancer Patients Undergoing Chemotherapy 2005 (modified significantly for 2006) Asks chemotherapy patients questions about how they had responded to treatment and makes additional payment to oncologists for submitting this quality of life and patient care data Concluded
Reimbursement of State Costs for Provision of Part D Drugs 2006 Reimburses States for drug costs and related administrative costs incurred during the transition period for full-benefit dually eligible beneficiaries to Medicare Part D Concluded
Medicare Part D Payment Demonstration (also known as Medicare Part D Reinsurance Demonstration) 2006 Provides alternative methods of receiving reinsurance for drug costs above the “catastrophic” level for Part D plans offering enhanced coverage Concluded
Medicare Demonstration to Transition Enrollment of Low-Income Subsidy (LIS) Beneficiaries 2007 Phase-in the enrollment weights methodology for regional benchmarks to maintain substantial availability of below-benchmark plans and minimize disruption to LIS beneficiaries Concluded
Innovation Center
Medicare Advantage Value-Based Insurance Design (VBID) Model 2017 Tests a variety of payment and delivery approaches, including flexibilities targeted to Medicare beneficiaries based on chronic condition, one of which is reductions in cost sharing for covered Part D drugs Ongoing through 2024
Part D Enhanced Medication Therapy Management Model 2017 Provides basic, stand-alone prescription drug plans with flexibility to implement innovative medication therapy management programs with the goal of optimizing medication use Ongoing through 2021
Part D Payment Modernization Model 2020 Tests the impact of a revised Part D program design and incentive alignment on overall Part D prescription drug spending and beneficiary out-of-pocket costs Ongoing through 2024
Part D Senior Savings Model 2021 Allows Part D sponsors, through enhanced plans, to offer a Part D benefit design that limits out of-pocket costs for insulin to $35 a month Ongoing through 2025
Most Favored Nation Model 2021 Modifies payments for certain Part B drugs that contribute to high Part B spending to align more closely with international prices and also removes incentives for physicians to prescribe high-cost Part B drugs Not yet in effect; HHS enjoined from implementing
NOTE: This table does not include Congressionally mandated models.
Issue Brief

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