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CMS Announces Drug Program Bidding Results

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WASHINGTON BUREAU — Medicare Part D prescription drug plan bidding cut the 2012 national average monthly bid amount.

The national average monthly bid amount will fall to $84.50 in 2012, from $87.05 this year, according to Paul Spitalnic, an official at the Office of the Actuary at the Centers for Medicare & Medicaid Services (CMS).

CMS officials calculate the monthly amount using standardized bid amounts for stand-alone Part D prescription drug coverage and for Medicare Advantage managed care plan drug coverage.

Another key Part D figure, the Part D base beneficiary premium, will fall to $31.08, from $32.34, Spitalnic says.

The base beneficiary premium is a measure of the amount consumers are likely to pay for coverage.

In addition to cutting the base premium, Part D bidding helped hold down the amounts higher-income consumers will have to pay out of their Social Security checks each month.

Congress created the “monthly adjustment amounts” by adding Section 3308 to the Patient Protection and Affordable Care Act of 2010 (PPACA), to reduce the federal Part D drug coverage subsidy for individuals with annual incomes over $85,000 and couples with annual incomes over $170,000.

For individuals with incomes from $85,000 to $107,000, the monthly adjustment will fall to $11.60, from $12; for individuals with incomes over $214,000, the adjustment will fall to $66.40, from $69.10.

CMS also is starting implement a system for paying more for Medicare Advantage plans with higher quality ratings and less for plans with lower ratings. In Baldwin County, Ala., for example, quality demonstration program rates range from $786.06 for poorly rated 1-star plans up to $864.67 for highly rated 5-star plans.

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