Medicare Savings: Medication Adherence

Third Way asked Avalere Health to estimate the cost or savings on the Federal budget of a proposal to increase medication adherence among Medicare beneficiaries. The proposal would strengthen and expand Medication Therapy Management (MTM) programs in Part D to require Part D plans to target adherence improvements for specific conditions where improved medication adherence is shown to decrease medical spending. The proposal would require all Part D plans to participate and allow plans to share in medical spending savings.

Avalere estimated this proposal would reduce federal spending by $4.7 billion over the 2015-2024 federal budget window. This amount reflects a combination of an estimated $1.8 billion in new Part D costs and an estimated $1 billion in shared savings with Part D plans. This spending is offset by an estimated $7.5 billion in Medicare Parts A and B spending for medical services.

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