• CMS Issues Draft Guidance on Medicare Part D Discount Program
  • May 11, 2010 | Authors: Rachel C. Grunberger; Demetrios L. Kouzoukas; Anna D. Kraus
  • Law Firm: Covington & Burling LLP - Washington Office
  • On April 30, 2010, the Centers for Medicare & Medicaid Services (CMS) issued draft guidance to Part D sponsors regarding implementation of the Medicare coverage gap discount program (Discount Program), established under section 3301 of the Patient Protection and Affordable Care Act (PPACA), as amended by section 1101 of the Health Care and Education Affordability Reconciliation Act of 2010 (collectively, the Act). As discussed in a previous alert, beginning in 2011, the Discount Program will phase out the coverage gap, or “donut hole,” under Medicare Part D by gradually reducing the amount of coinsurance for brand name and generic drugs purchased in the donut hole until it reaches 25% by 2020. The Discount Program will be financed through a combination of manufacturer discounts and federal subsidies.