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AAMC Urges CMS to Withdraw Most Favored Nation Final Rule

January 29, 2021

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CONTACTS
Mary Mullaney, Director, Hospital Payment Policies

The AAMC submitted comments on Jan. 25 regarding the Most Favored Nation (MFN) Model interim final rule (IFR) with comment. The Centers for Medicare & Medicaid Services (CMS) confirmed by email on Jan. 26 that the MFN Model will not be implemented without further rulemaking.

If the IFR were implemented as originally published, it would have reduced Medicare Part B reimbursement for 50 separately payable prescription drugs to the lowest price paid by a comparable foreign nation. While the AAMC expressed support for efforts to make prescription drugs more affordable for consumers, the letter states that the MFN Model does not achieve that goal, and that it instead would “jeopardize access to medically necessary care for Medicare beneficiaries and negatively impacts the hospitals and providers who care for these patients.”

The AAMC stated that it does not support the MFN model and called on the CMS to withdraw the final rule. In its comment letter, the AAMC outlines its concerns about the potential impact the MFN Model would have on Medicare beneficiaries. The final rule states that Medicare beneficiaries could be forced to forgo access to needed medications under the MFN Model. The AAMC letter stated that it “cannot support a proposal that disregards the needs of Medicare beneficiaries.” 

The letter also notes that “simply decreasing reimbursement to providers for select separately payable drugs under Medicare Part B does nothing to stem skyrocketing drug prices.” As a result of this, the letter continues, “AAMC-member hospitals and their associated faculty practice plans could see payments for the MFN Model drugs almost cut in half once the model is fully implemented.”

Additionally, as currently structured, the AAMC stated that it believes hospitals participating in the 340B Drug Pricing Program (340B Program) would be negatively impacted if the MFN Model were to be implemented. Under the MFN model, 340B participants would be paid the lesser of the 340B amount (non-model payment amount) or the MFN amount, in addition to the new add-on payment. The letter stated that “paying 340B participants less than the 340B price will jeopardize the programs and services the savings achieved under the 340B Program support and is contrary to the intent of the program.”

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