A Christmas Present-Will the MFN rates increase or decrease your drug revenue?

CMS has posted the Most Favored Nation (MFN) Model final payment rates on the Innovation Center website here: January 2021 MFN Model Drug Pricing File (XLS).  

• The drugs will be reimbursed based upon 75% of the applicable ASP and 25% of the MFN price for which MFN pricing was available. Otherwise the payments rates are 100% of ASP.
• Column D contains the MFN Drug Payment Amount Limit. This payment will continue to be subject to Medicare co-pays and deductibles, however the payment rate for M1145 will not as Medicare will reimburse the full amount to providers with no co-pays or deductible requirements from beneficiaries.

• The Innovations Center also contains a slide deck of addition information on the Rule: MFN Model: Billing Information Slides (PDF)
  • We noted that CMS has clarified a statement in the rule and indicated that Hospital Outpatient Departments paid under OPPS may report a token charge for M1145, but will continue to be reimbursed $148.73. The claims processing systems will reimburse the lesser amount of the allowed amount or billed amount to other providers such as physician offices.

Modeling of the new Rule is complex as the ASP Pricing File for January 2021 continues to reflect ASP+6% rates. For the 50 impacted drugs, these rates will need to be adjusted to arrive at the ASP price. In addition excepted and non-excepted departments are reimbursed at different rates for 340B-purchased drugs. It is important to distinguish the type of departmental registration in order to calculate any reimbursement shifts based upon the rule.

We appreciate CMS’ posting of the new files, but we still have questions that we are submitting to the CMS MFN mailbox and will be including in our Rule Comment Letter due January 26, 2021.

Will you help us by reviewing these questions and then submitting any additional questions to us so that we can forward them to CMS for a response?

Drug Payment Issues

1. For pass-through drugs in hospital outpatient departments (status indicator=G) (J0517- Inj., benralizumab, 1 mg, J9311-Inj rituximab, hyaluronidase, Q5111-Injection, udenyca 0.5 mg): Will providers receive ASP+6% until the drugs’ pass-through status expires, or will they be subject to the MFN blended payment as of January 1, 2021?  (The CY2021 OPPS Final Rule (Display Copy-page 539-540) indicates that drugs with pass-through status purchased under 340B will continue to be billed with the “TB” modifier and paid at ASP+6% as currently).
2. Excepted 340B hospitals report a TB modifier for drugs represented by a K or G status indicator. In the CY2021 OPPS Final Rule, states hospitals shall continue to receive ASP+6%. Will providers who report the TB modifier receive the current rate or the MFN blended payment model?
3. Will the 2% hospital sequestration scheduled to be enforced again on January 1, 2021 reduce the MFN Drug payment rates by 2% of will they not be impacted by sequestration?
4. If these Part B drugs are administered under Home Health benefits or in a “Hospital without walls” scenario in the patient’s home, are the payment rates the MFN blended payment rates?

Calculation and billing of M1145 dose “units”

1. In a situation where two National Drug Codes (NDCs) are used to make one dose (e.g. Rituximab 500 mg and 100 mg vials), the two lines are reported separately when NDCs are reported. For M1145 reporting, will this count as “1” or “2” doses since there are two lines?
2. In a situation where a dose is split between two lines because of an MUE with a line edit, does that count as “1” dose or “multiple doses” depending upon the number of lines? Reference Novitas Local Coverage Article: Billing and Coding: Hemophilia FACTOR Products (A56433) which instructs to bill on multiple lines with modifier -76.
3. If we are reporting a HCPCS code for a “NO COST” item based upon CMS Transmittal 4013- Institutional Billing of No Cost Items, should we also report M1145 with a dose of “1” if the no cost item is a HCPCS for an MFN drug?
4. In a scenario where a patient receives the same drug twice in one day, we assume that we should report M1145 with units of “2” for two separate doses. Is there a modifier that we should use to indicate that it is correct and not a billing error?
5. We see the notation about hospital outpatient departments ability to submit a token charge but still be paid at the $148.73 rate. Is this true for ambulatory surgery centers also, or will they be reimbursed like physician offices: the lower of the billed or allowed amount?
6. We assume that for recurring accounts that are only billed once every 30 days, CMS claims processing will recognize multiple claim lines with M1145 for each day that an MFN drug is billed. Is that correct?
7. Since M1145 is an add-on payment for the drug, we assume that it should be reported in revenue code 636. However, there is no NDC number associated with M1145. For dual eligible patients (Medicare primary/Medicaid secondary), will Medicaid programs be instructed to NOT require an NDC number on M1145 when receiving claims electronically from the Medicare system and carve M1145 out of the editing processes for “NDC required for Line Item”? 

Drug Shortage

1. Leuprolide Acetate (J9217) appeared on the FDA Drug Shortage listing as of December 11. Will the posted payment rates for January 1 be updated to reflect that J9217 will be reimbursed at ASP+M1145 add-on payment instead of the MFN rate (a difference of $26.318 per 7.5 mg)? 

Policy

The Outpatient Prospective Payment System is a budget neutral payment methodology. Will the savings from the lower payments for MFN drugs be redistributed to other Part B non-drug services similar to the redistribution with the savings from the lower 340B payment rates?

IF YOU HAVE A QUESTION NOT LISTED ABOVE, PLEASE SUBMIT TO OUR WEBSITE AT: https://www.pharmacyrevenuecycle.com/contact-us.  We’ll respond with an answer, or submit it to CMS and then forward you their response when we receive it.

Happy Holidays!
Agatha & Maxie