In case you missed it, on Nov. 20, the Centers for Medicare & Medicaid Services (CMS), a department within the U.S. Department of Health and Human Services, announced that it will overhaul the payment system for Medicare Part B (i.e., infusion) drugs on Jan. 1, 2021. The plan is called the Most Favored Nation (MFN) Model.1 What is it, and why is it a potential blow to the rheumatology community? And what can you do, in a few minutes, to help stop it?
Long story short: The model will cut reimbursement for 50 expensive drugs, change billing practices and cause 9% of patients to lose access to their medicines—all with just a few weeks’ notice. As always, the ACR has made it easy for you to raise your voice and advocate for change. Read on.
9% of patients will lose access to their medications. … Is there a worse time in modern history to put 10,000 elderly rheumatology patients on steroids or admit them to hospitals?
Meanwhile, the MFN will cause new administrative burdens. Billers will spend more time editing Medicare claims: They will need to identify Medicare Part B beneficiaries who receive MFN drugs (the list changes over time), and comply with new billing instructions to add a separate line item and a correct charge amount. Practices may be asked by manufacturers to provide price information on drug inventory provided through the MFN model (as distinct from other drug inventory). Finally, practices will need to purchase drugs parsimoniously, especially this month, anticipating that a drug bought on Dec. 31 will be reimbursed 7% less if it is administered to a patient on Jan. 1.
The MFN has safeguards for practices that go into the red, but in my estimation they are too little, too late. The process of applying for a financial hardship exemption starts in 2022 after a practice may have gone deep into debt over the entire first year. Applications require burdensome new accounting, and gaining an exemption is too restrictive:
“MFN participant must have experienced a reduction in Medicare FFS allowed charges for separately payable Medicare Part B drugs on a per beneficiary basis during the performance year as compared to the prior year (that is, the four calendar quarters immediately preceding the performance year) that is greater than 25% of the MFN participant’s total Medicare Part A and Medicare Part B FFS allowed charges on a per beneficiary basis during the prior year.”1
Plus, if an applicant is successful, reconciliation payments would be provided through contractors without any apparent accountability—no appeals are allowed.
The model will be rolled out across the entire country in all settings, with few exceptions (e.g., children’s hospitals, certain cancer hospitals, Indian Health Service, Rural Health Clinics, Federally Qualified Health Centers).
As providers receive less reimbursement for drugs they administer and add-on payments level the margin across drugs, the CMS estimates that it will save $87 billion over seven years. And although the CMS hopes drug manufacturers will reduce their prices to keep providers from going underwater as reimbursement falls, the agency realizes that won’t always happen, and it estimates that 9% of patients will lose access to their medications.
That’s the gut punch. Consider that about 117,000 Medicare beneficiaries received anti-rheumatic biologic disease-modifying anti-rheumatic drugs (DMARDs) in 2016.2 If 9% of those beneficiaries stop taking their medicines, as the CMS estimates, almost all of them with rheumatoid arthritis will flare. That means about 10,000 Americans with systemic rheumatic disease will flare in 2021. Many will require immunosuppressive steroids or hospitalization to treat the flare. Ask yourself: Is there a worse time in modern history to put 10,000 elderly rheumatology patients on steroids or admit them to hospitals? Not to mention the adverse effects on people with cancer, inflammatory bowel disease, multiple sclerosis, etc.
The Upside
Admittedly, there is some good news. Drug prices will likely be reduced. Premiums will likely fall. Also, patients won’t be responsible for any share of the add-on payment (although insurance usually covers this anyway).
And there is a possible benefit to rheumatology practices: The CMS estimates the add-on payments for the average drug dose given by rheumatologists will increase 9% compared to the ASP+6 add-on payment. However, this may not raise clinics’ bottom lines if drug companies and distributors don’t reduce prices as the model payments fall.
With large price points and small margins, any fluctuation could cause severe financial ramifications—especially for small practices. Meanwhile, of course, patients’ access to treatments will be at risk.
Take Action
What is being done to stop the MFN? All three branches of government are starting to hear from stakeholders. Industry has engaged the judiciary by predictably filing lawsuits to stop the model from going into effect. They rightly claim the scope is too large for a pilot demonstration project (the CMS claims authority to implement the MFN as an experimental pilot project), because covering the entire country leaves no control group for comparison. They also allege the plan is an illegal regulation, because it skipped the usual process of publishing a draft for comment and went straight to an Interim Final Rule.3 In the decade I’ve been doing advocacy work, I hadn’t yet heard of an Interim Final Rule.
The ACR makes it easy to raise your voice to the executive branch. The ACR website has pre-written comment language in its Legislative Action Center. It only takes a few minutes to add in your own details and concerns and send an email to the CMS with a few clicks. Comments are due by Jan. 26, 2021.
A little advice about sending comments to the CMS: Be polite, describe the consequences of the regulation from patients’ perspectives (e.g., if practices go underwater, the patients they serve lose access), and please note that comments are published publicly. (Note: Your address and email will not be made public when you submit comments through the ACR website.)
Lastly, if neither the courts nor President Trump’s CMS stop this plan, we’ll need Congress to step in. Tell your representative and senator to block the MFN from going into effect by emailing them through the ACR’s Legislative Action Center or by publicly tagging on Twitter. Tell them your concerns about the rapid timeline for implementation, administrative burdens that take you and your team away from patients and pandemic preparation, and, most importantly, the harmful consequences of the MFN on their constituents, whom you serve.
Angus Worthing, MD, FACP, FACR, is a practicing rheumatologist with Arthritis & Rheumatism Associates PC, Washington, D.C., and a clinical assistant professor of medicine at Georgetown University.
References
1. Most favored nation (MFN) model. A rule by the Centers for Medicare & Medicaid Services. 42 CFR 513. Federal Register. 2020 Nov 27;85 FR 76180:76180–76259.
2. McCormick N, Wallace ZS, Sacks CA, et al. Decomposition analysis of spending and price trends for biologic antirheumatic drugs in Medicare and Medicaid. Arthritis Rheumatol. 2020 Feb;72(2):234–241.
3. Morse S. American Hospital Association and PhRMA question legality of Most Favored National Model. Healthcare Finance. 2020 Nov 23.