Medicare’s Most Favored Nation Is My Least Favorite Notion!

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.

Pertinent Details
Starting Jan. 1, the reimbursement to providers of 50 of the most expensive drugs administered in clinics will be reduced, according to a blend of the best international price and the current U.S. price. In 2021, the payment amount will start as a blend of 25% of the international price and 75% of the U.S. price; in 2022, the blend will be 50–50 international price and U.S. price; in 2023, it will comprise 75% of the international price and 25% of the U.S. price, and finally, in 2024–27, the reimbursement will be 100% of the international price. The CMS estimates that reimbursement will fall 7% on Jan. 1, and again yearly over the next three years. Ten rheumatology drugs made the list: rituximab, denosumab, non-biosimilar infliximab, abatacept, certolizumab, golimumab IV, tocilizumab, ustekinumab, Orthovisc and pegloticase.

The add-on payment for drugs will also change. Currently, during the public health emergency, providers are paid 6% of the average sales price (i.e., ASP+6; previously, this amount was reduced by sequestration cuts to ASP+4.3%). To “remove or reduce the financial incentive to prescribe higher cost drugs more frequently”—the CMS does not acknowledge all of our drugs are similarly expensive, rendering any incentive moot—providers will be paid a fixed amount for each drug dose: $148.73. This was calculated by averaging the 2019 price of the 50 listed drugs plus 6% and adjusting for inflation in 2020. The add-on price will apparently rise annually for inflation. By my back-of-the-envelope calculation, for a 70 kg patient, the add-on payment for an infusion of Remicade (5 mg/kg) will increase by about $50, the add-on for tocilizumab (8 mg/kg) will reduce by about $30, and the add-on for rituximab (1,000 mg) will drop about $100. (Note: Biosimilar infliximab is not on the list.)

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.