Technical Memorandum on the Calculation of the Maximum Monthly Cap on Cost-Sharing Payments Under Prescription Drug Plans

Relevant to: Part D

This memorandum provides a high-level summary of statutory provisions and examples of monthly cap calculations for the Maximum Monthly Cap on Cost-Sharing Payments Program that was established by section 11202 of the IRA (P.L. 117-169), signed into law on August 16, 2022. Section 1860D-2(b)(2)(E) of the Social Security Act (the Act), as added by section 11202 of the IRA, requires all Medicare prescription drug plans to offer their enrollees the option to pay their out-of-pocket Part D drug costs through monthly payments over the course of the plan year instead of at the pharmacy point of sale, beginning January 1, 2025. This provision is applicable to all Part D sponsors, including both stand-alone Medicare prescription drug plans (PDPs) and Medicare Advantage (MA) plans with prescription drug coverage (MA-PDs), as well as Cost plans and demonstration plans.

See the full guidance for more information.