Special Bulletin: CMS Issues Interim Final Rule Implementing Most Favored Nation Model for Part B Drugs

November 23, 2020

The Centers for Medicare & Medicaid Services (CMS) Nov. 20 released an interim final rule implementing the Most Favored Nation (MFN) Model, a new payment model through the Center for Medicare and Medicaid Innovation (CMMI) that will cut Medicare Part B payments for certain drugs to the lowest price available in similar countries.

Starting Jan. 1, the MFN Model will no longer pay an average sales price (ASP)-based rate for certain high-cost, separately payable Medicare Part B drugs. Instead, it will pay no more than the lowest price charged in other similar countries for these drugs. The model also will pay providers a flat add-on amount for each dose of an MFN drug, instead of a percentage of each drug’s ASP as is currently the case. Medicare beneficiaries will not pay coinsurance on the add-on payment.

The scope of the MFN Model is nationwide – that is, participation is required by all Medicare providers and suppliers that receive separate Medicare Part B fee-for-service payment for the model’s included drugs, with certain exceptions.

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