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.