Mass General Brigham Issues Public Comment on Centers for Medicare & Medicaid Services Rule

WASHINGTON, Feb. 2 -- Gregg S. Meyer, president of the Community Division and executive vice president of value based care at Mass General Brigham, Boston, Massachusetts, has issued a public comment on behalf of 4 340B hospitals on the Centers for Medicare and Medicaid Services rule entitled "Most Favored Nation Model". The comment was written on Jan. 26, 2021, and posted on Feb. 1, 2021:

The hospitals are Mass General Hospital, Brigham and Women's Hospital, Brigham and Women's Faulkner Hospital and North Shore Medical Center.

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On behalf of Mass General Brigham (MGB) and our 340B hospitals (i.e., Mass General Hospital, Brigham and Women's Hospital, Brigham and Women's Faulkner Hospital, and North Shore Medical Center) I am writing to provide comments in response to the Centers for Medicare and Medicaid Services' (CMS) Interim Final Rule with comment period (IFR) regarding the Most Favored Nation (MFN) Model for setting Medicare Part B payment for selected drugs based on international prices./1

MGB is an integrated academic health care system, uniting great minds to solve the hardest problems in medicine for our communities and the world. MGB connects a full continuum of care across a system of academic medical centers, community and specialty hospitals, a health insurance plan, physician networks, community health centers, home care, and long-term care services. MGB is a non-profit organization that is committed to patient care, research, teaching, and service to the community. In addition, Mass General Brigham is one of the nation's leading biomedical research organizations and a principal teaching affiliate of Harvard Medical School.

Our hospitals participate in the 340B program by virtue of treating a high volume of Medicaid and low-income Medicare patients. Under 340B, Congress requires drug manufacturers to discount drugs for safety net hospitals to help them fund care for patients with low incomes. While we support efforts to address the issue of high drug prices in the United States, we are concerned that drastic payment cuts under the MFN Model would have disastrous consequences for safety net hospitals and patient access to treatment.

I. Underpayment of 340B Hospitals Will Significantly Harm the Safety Net and Their Patients

The MFN Model does not directly address the high drug prices set by manufacturers, but instead reduces reimbursement to Medicare providers in the hope that manufacturers will reduce domestic drug prices in response, an outcome that is far from guaranteed. As a result, CMS acknowledges that average payment to 340B hospitals under the MFN Model could be as low as Average Sales Price (ASP) - 65%, which would pay us far below our costs for drugs subject to the Model. For example, drug acquisition cost reimbursement for Lucentis, which is used to treat macular degeneration and has no generic equivalent, will be cut by 83 percent for 340B hospitals by the fourth year of the Model.

Reimbursement for Elyea, an alternative drug for this condition, will be cut by 44%. Reimbursement for Opdivo, an immune checkpoint inhibiter that is used to treat different cancers will be cut by 64% by year four.

These cuts would be on top of the drastic payment cuts for 340B drugs that CMS began imposing in 2018, which have already negatively impacted the care we are able to provide to low-income patients.

Significantly deeper cuts under the MFN Model jeopardize our hospital's ability to maintain access to these Part B drugs to treat our patients.

In addition to unsustainable reimbursement reductions, the MFN Model would impose additional contracting costs by requiring us to take on the role of trying to negotiate significantly lower drug prices from manufacturers to ensure that reimbursement under the MFN Model covers drug acquisition costs.

Our hospitals cannot absorb additional Medicare payment cuts, particularly ones of this size. The significant underpayment to hospitals like ours for drugs under the Model has the potential to devastate the safety net's ability to provide critical medications for Medicare beneficiaries.

I. 340B Drugs Should Receive an Add-On Payment

We note that the MFN Model would shift current Medicare policy and allow 340B hospitals to receive an add-on payment per dose to cover storage, handling, and other pharmacy-related overhead costs for Model drugs. Unlike 340B hospitals, non-340B hospitals currently receive an add-on payment of 6% of a drug's ASP for outpatient drugs under the Medicare Outpatient Prospective Payment System (OPPS). Though we do not support the current MFN Model, we strongly support CMS' recognition that 340B and non-340B hospitals should receive the same add-on payment and urge CMS to adopt this policy for current OPPS payments.

Thank you for the opportunity to provide comments. We urge CMS to protect the healthcare safety net and withdraw the MFN Model. Should you have any questions, please feel free contact me or Christopher Philbin, Vice President of Government Affairs, at [email protected] or 857-282-5151.

Sincerely,

Gregg S. Meyer, MD, MSc

President of the Community Division & EVP of Value Based Care

Professor of Medicine, Massachusetts General Hospital and Harvard Medical School

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Footnote:

1/ Most Favored Nation (MFN) Model, 85 Fed. Reg. 76180 (Nov. 27, 2020).

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The rule can be viewed at: https://www.regulations.gov/document?D=CMS-2018-0132-2750

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