Late last week, the Trump administration released new regulations intended to lower rising drug costs and limit payment obligations for governmental payers. Under the new rule, known as the “Most Favored Nation” plan, the Centers for Medicare & Medicaid Services (CMS) will reimburse Medicare Part B drugs at “the lowest price that drug manufacturers receive in other similar countries” for the top 50 most expensive Part B drugs, plus a fixed add-on payment. The intent behind this rule change is to open up Medicare Part B Drug Pricing to the competition of other countries’ health care markets and to remove incentives to use higher-cost Part B drugs while retaining quality care for Medicare beneficiaries.
The new regulations are effective January 1, 2021, with the changes being phased in over several years; however, there is a high likelihood that the Biden Administration will scrap most or all of the plan shortly after the inauguration in early 2021. Additionally, the pharmaceutical industry would almost surely bring lawsuits if the plan is kept in place. Those lawsuits would directly affect implementation of the reimbursement updates.
This contentious change is being implemented through an interim final rule published by CMS. It would be mandatory for all Hospital Outpatient providers participating in Medicare Part B, excepting: cancer centers, critical access hospitals, rural health clinics, federally qualified health centers, children’s hospitals, and Indian Health Service facilities. 340B safety net providers would be subject to these reimbursement changes unless they fall into one of the previously listed excepted categories.
Advis will carefully monitor the situation and will report changes as they arise. Please contact our office at 708-478-7030 should you have any questions regarding this drug pricing update or how it will affect your organization.
Published: November 24, 2020