Centers for Medicare & Medicaid Services: Trump Administration Announces Prescription Drug Payment Model to Put American Patients First
In support of
Starting in January, the model, known as the Most Favored Nation (MFN) Model, will test an innovative way for Medicare to pay no more for high cost, physician-administered Medicare Part B drugs than the lowest price charged in other similar countries. Following the President's recent Executive Orders to lower drug prices and improve access to life-saving medications, the MFN Model will protect current beneficiary access to Medicare Part B drugs, make them more affordable, and address the disparity of drug costs between the
"The way we pay for some of the most costly drugs in Medicare today puts American patients last; the President's Most Favored Nation Model will put American patients first," said HHS Secretary
"
The rule tackles a number of issues identified in the American Patients First drug pricing blueprint, released by
Over the last five years, Medicare Part B percent drug costs have grown at an annual rate of 11.5 percent. The 2020 Medicare Trustees report noted that Medicare Part B drugs have consistently been a major contributor to overall Medicare Part B spending trends, accounting for 37 percent of the change in Medicare Fee-for-Service Part B benefit spending from 2015 to 2019. Medicare Part B drug spending of
Medicare Part B drug spending is growing faster than drug spending in Medicare Part D and the
While state Medicaid programs and Medicare Advantage plans have tools to reduce certain drug costs through price negotiations, current law requires the Medicare Part B program to pay for most drugs administered by physicians at the average sales price in
For example, the top-selling Part B drug--a common eye drug (Eylea)--was approximately two times as expensive in Medicare Part B as in comparison countries. Because many seniors pay their 20 percent coinsurance obligation out of pocket, this difference costs them thousands of dollars in additional medical expenses a year. These high costs have a real impact: Medicare beneficiaries are often on fixed incomes and paying more for these drugs can hurt them financially, prompt them to take fewer doses of their medications, or lead them to abandon treatment altogether.
The Most Favored Nation Model will operate for seven years. Under the model, CMS will test paying based on the MFN Price for 50 Medicare Part B drugs and biologicals with the highest Medicare Part B spending. These 50 drugs and biologicals encompass approximately 73 percent of Medicare Part B drug spending, despite accounting for fewer than 10 percent of Medicare Part B drugs. All Medicare-participating physicians, hospitals and ambulatory surgical centers in
The model also includes protections for beneficiaries to ensure they will see savings compared to what they would pay if the model were not tested. Additionally, the model includes financial hardship protections for certain MFN participants (physicians, hospitals, and other providers) whose revenue is significantly affected by the model.
For a fact sheet on the Most Favored Nation Model, please visit: https://www.cms.gov/newsroom/fact-sheets/fact-sheet-most-favored-nation-model-medicare-part-b-drugs-and-biologicals-interim-final-rule
The Most Favored Nation Model Interim Final Rule with Comment Period (CMS-5528-IFC) can be downloaded here: https://innovation.cms.gov/media/document/mfn-ifc-rule. Public comments on the rule can be submitted through www.regulations.gov and must be received no later than 60 days after publication of the IFC in the
The new ASPE report on rises in Medicare Part B drug spending can be found here: https://aspe.hhs.gov/pdf-report/medicare-part-b-drugs-spending-and-utilization
The ASPE report on Medicare Part B drug spending and international price comparisons can be found here: https://aspe.hhs.gov/pdf-report/medicare-ffs-part-b-and-international-drug-prices
* * *
REPORT: https://www.cms.gov/files/document/2020-medicare-trustees-report.pdf
Centers for Medicare & Medicaid Services Finalizes Policy That Will Increase Number of Available Lifesavings Organs
Sen. Cardin: Federal Delegation Members Call on Trump to Overturn Denial of Maryland Disaster Funding for Tropical Storm Isaias
Advisor News
Annuity News
Health/Employee Benefits News
Life Insurance News