What practices need to know about the most favored nation rule


Brad Tallamy, Senior Director, Government Affairs, AmerisourceBergen

The Trump administration recently finalized an Interim Final rule implementing the Most Favored Nation (MFN) payment system for Medicare Part B drugs beginning on January 1, 2021. Instead of the current reimbursement system of ASP+6, the MFN model caps reimbursement for the top 50 Part B drugs at the lowest price in 22 OECD nations with gross domestic products of at least 60 percent of the United States’ GDP.

CMS will also set a flat provider add-on payment of $148.73 per administration. There will be no beneficiary cost-sharing for this add-on payment.

The new Medicare reimbursement system applies to community physicians; group practices; hospital outpatient departments; ambulatory surgical centers, and other providers who bill under Part B for the included drugs.

Because the MFN methodology is set up to determine reimbursement to community physicians & other Medicare providers, the rate they are reimbursed may not be the price they paid for a drug. As a result, many practices—particularly smaller, rural providers—may be underwater under the MFN formula, losing money each time they administer the drug to a patient.

This is unsustainable, likely resulting in serious patient access issues. In fact, the rule states, “While there are significant savings as a result of this model, a portion of the savings is attributable to beneficiaries not accessing their drugs through the Medicare benefit, along with the associated lost utilization.”

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Visit the Take Action page to join our campaign to advocate for corrective action on Most Favored Nation (MFN) Model for Medicare Part B drugs.

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