CMS has issued a proposed rule to rescind the Most Favored Nation (MFN) interim final rule that appeared in the Federal Register on November 27, 2020. There will be a 60 day comment period regarding this proposal to rescind the MFN interim final rule with comments due to CMS by October 12, 2021.
The MFN was a 7-year nationwide mandatory model that would phase out the ASP methodology to determine Part B drug payment for a select number of high cost drugs. Rather, it was designed to align payment for Part B drugs to that of the lowest purchase cost from other countries. Additionally, it required operational changes to bill an add on payment code to cover pharmacy overhead replacing the statutory 6% add on payment. The MFN interim model underwent four lawsuits that delayed the implementation date of the Rule.
CMS received approximately 1,166 comments including our detailed list of concerns with the implementation of this model. Most commenters agreed on the need of addressing high cost of prescription drugs; however, almost all were concerned with the implementation date and the change to put all the responsibility on the hospital sector to lower drug prices. At a high level the MFN interim model was rescinded on the basis of the following:
Regulatory impact analysis (RIA) determined “economically significant” effects more than $100 million or more in 1 year.
Regulatory Flexibility Act (RFA) determines impact on small entities as defined by a change of 3% to 5% or more of total annual revenues. If the MFN model is implemented, more than 20,000 small entities would be impacted.
1. Organizations should work together to submit comments to the proposed rule to rescind the MFN model interim final rule by October 12, 2021.
2. Revenue Integrity and pharmacy teams should keep the details of the MFN interim final rule in the back of their mind. This rule, or a variation, may raise its red hair in the future.