Medicare Part D, also known as the Medicare prescription drug benefit, is a voluntary program funded by CMS that subsidizes the costs of outpatient prescription drugs and prescription drug insurance premiums for Medicare patients. It was put into action as part of the Medicare Modernization Act (MMA) of 2003 and went into effect on January 1, 2006.
There are two types of Part D plans: Prescription Drug Plan (PDP) and Medicare Advantage Prescription Drug Plan (MA-PD). Medicare Part D plans are administered by private payers, patients’ former employers, and now health care providers. In 2016, nearly 41 million Medicare patients were enrolled in Part D plans; the continued increase in the Part D market will push providers to boost quality and cost containment efforts for their patients.