Did you see it???
CMS submitted the Final Rule, “Misclassification of Drugs, Program Administration and Program Integrity Updates Under the Medicaid Drug Rebate Program (CMS-2434),” to the OMB on March 22, 2024, with a Final Action date of June 2024, although it could be finalized and released sooner. This is related to the Proposed Rule that included a number of significant changes, including:
• The stacking of discounts for the determination of Best Price,
• A limit on manufacturers’ ability to dispute state rebate claims to 12 quarters,
• Requires all affiliated entities to participate in the MDRP if one entity participates, and
• Would make a physician-administered drug that is included in a bundled payment a Covered Outpatient Drug for purposes of the MDRP if the drug is itemized separately on the claim.
If you have any questions or would like a copy of the Proposed Rule, please let me know. The Final Rule will be released AFTER it has been reviewed and scored by the OMB. And of course, as soon as the Final Rule is released, The Pricing Group will provide updates.
Did you see it???
CMS submitted the Final Rule, “Misclassification of Drugs, Program Administration and Program Integrity Updates Under the Medicaid Drug Rebate Program (CMS-2434),” to the OMB on March 22, 2024, with a Final Action date of June 2024, although it could be finalized and released sooner. This is related to the Proposed Rule that included a number of significant changes, including:
• The stacking of discounts for the determination of Best Price,
• A limit on manufacturers’ ability to dispute state rebate claims to 12 quarters,
• Requires all affiliated entities to participate in the MDRP if one entity participates, and
• Would make a physician-administered drug that is included in a bundled payment a Covered Outpatient Drug for purposes of the MDRP if the drug is itemized separately on the claim.
If you have any questions or would like a copy of the Proposed Rule, please let me know. The Final Rule will be released AFTER it has been reviewed and scored by the OMB. And of course, as soon as the Final Rule is released, The Pricing Group will provide updates.
Professor of Practice, Nationally Recognized Expert in Health Care and Life Sciences, Regulatory Consultant, Patient Access Advocate, Independent Director, and Retired Sidley Austin Partner
Is CMS about to Violate the “Limiting Definition”?
Katie provides a terrific update on the Medicaid Drug Rebate rule, and Deborah makes the point that the “limiting rule” proposal is inconsistent with the statute.
It sure is; the proposal is contrary to the plain language of the law. But CMS probably doesn’t care, and some there actually may WANT the fight.
The Limiting Definition: Sec. 1927k(3) carves out certain covered outpatient drugs from Medicaid rebates. The provision “limits” the drugs subject to rebates. The provision says:
“The term ‘covered outpatient drug’ does not include any drug…provided as part of, or as incident to and in the same setting as, any of the following (and for which payment may be made under this subchapter…and not as direct reimbursement for the drug).” It goes on to then cite a bunch of service types, like inpatient services, physician services, etc.
So, if a drug is bundled in with one of these devices for payment purposes and a payment is not made “directly” for the drug, no rebate is owed.
The Proposal: CMS proposes to “clarify” what “direct reimbursement” means:
“Direct reimbursement for a drug may include both reimbursement for a drug alone, or reimbursement for a drug plus the service, in one inclusive payment if the drug and the itemized cost of the drug are separately identified on the claim”.
Ridiculous: You know you are going to get some sophist gobbledygook when CMS uses the word “clarify”, and the Agency is true to form here.
CMS proposes to “clarify” that a bundled, entirely indirect payment for a drug, is, magically, actually the exact opposite, so long as the “cost” of the bundled claim appears on the claim.
It’s hard to know where to begin. The plain language of the statute states, clearly, that a “payment” is not “direct” when the “payment” includes reimbursement for any of the other non-drug services. CMS’ proposed “clarification” is directly contrary to the statute because it specifically targets where the payment is for a “drug-plus service” and is all “inclusive”—exactly what the statute forbids.
The fact that the “cost” of the drug (not a “payment”) is included on the “claim”, which is a request for payment and not a payment, is irrelevant under the statute.
So Surely CMS Won’t Finalize This? I think it will.
It’s hard to look at the arc of what CMS is doing—and how aggressively it is pursuing its goals—without seeing it as waging “a war on drug price”.
But Aren’t They Afraid of a Lawsuit? They aren’t—as we have seen in the IRA implementation.
Well, the Office of General Counsel is probably not excited about this, but the policy and political folks are, I think, spoiling for fights.
But Why? Three reasons: (1) they are hoping to win the lawsuit, but even if they don’t, they will (2) earn the political points of a fight with “Big Pharma”, and (3) they will have “shown” Congress the statute “needs” to be changed.
#medicaid#drugpricing#bundledpayments
Did you see it???
CMS submitted the Final Rule, “Misclassification of Drugs, Program Administration and Program Integrity Updates Under the Medicaid Drug Rebate Program (CMS-2434),” to the OMB on March 22, 2024, with a Final Action date of June 2024, although it could be finalized and released sooner. This is related to the Proposed Rule that included a number of significant changes, including:
• The stacking of discounts for the determination of Best Price,
• A limit on manufacturers’ ability to dispute state rebate claims to 12 quarters,
• Requires all affiliated entities to participate in the MDRP if one entity participates, and
• Would make a physician-administered drug that is included in a bundled payment a Covered Outpatient Drug for purposes of the MDRP if the drug is itemized separately on the claim.
If you have any questions or would like a copy of the Proposed Rule, please let me know. The Final Rule will be released AFTER it has been reviewed and scored by the OMB. And of course, as soon as the Final Rule is released, The Pricing Group will provide updates.
CMS System To Verify Negotiated Drug Prices Reach Patients Sparks Compliance, Operational Concerns
Bloomberg Law (5/29, Phengsitthy, Subscription Publication) reports, “The Medicare system proposed by the Biden administration to verify negotiated drug prices reach eligible individuals is generating concerns about compliance and operational challenges for manufacturers and dispensing entities.” CMS “continues to swiftly roll out its drug price negotiation program after publishing a draft guidance earlier this month for the next cycle of its price-setting scheme.” Public comments on the draft guidance are “underscoring the slew of responsibilities handed to drugmakers and dispensing entities, such as pharmacies, to carry out the drug’s maximum fair price.”
https://lnkd.in/gtv5hYYh
As those in healthcare know, "PBMs have enormous power over the price of drugs, and patients’ access to them. Almost a third of patients report rationing medicines and skipping doses due to high costs. Due to decades of mergers and acquisitions, the three largest PBMs now manage nearly 80 percent of all prescriptions filled in the United States. They are also vertically integrated, serving as health plans and pharmacists, and playing other roles in the drug supply chain as well. As a result, they wield enormous power and influence over patients’ access to drugs and the prices they pay with no accountability to the public."
It will be interesting to see how this plays out in Congress since cutting out the middleman seems like a logical way to lower drug costs.
https://lnkd.in/gTHxyv7D
The RxDC report isn't only about prescription drugs. It also collections information about spending on health care services and premium paid by members and employers.
CMS will publish findings about prescription drug pricing trends and the impact of prescription drug rebates on patient out-of-pocket costs.
You should check with your carrier, TPA, PBM, and other vendors to determine if they are filing on behalf of the plan, what additional information is needed to make a complete filing, and if they will charge a fee to do so. In the event the TPA, PBM, or other vendors do not file on the client’s behalf (employerbased plan, multi-employer plan, etc.), then the plan sponsor is required to file the RxDC reporting.
For more information, visit the CMS RxDC webpage...
https://go.cms.gov/3Vs2Wsw
Reach out to the Complete Benefits team for all your insurance questions and needs!
Johnson & Johnson has reversed course on their plan to delay discounts for 340B medications, following significant pressure from federal regulators. This decision marks a critical win for patients and healthcare providers who depend on fair pricing to access essential treatments. As we move forward, it's crucial to continue holding pharmaceutical companies accountable and advocating for greater transparency in drug pricing. #340B#AffordablePrescriptions#PrescriptionDrugReform#HealthcareAdvocacy#OCAP
“CVS and other pharmacy actors’ moves towards transparency and simplicity could be a welcome change to the pharmacy industry… [however,] it is unclear how additional transparency into pharmacy reimbursement practices will lead to lower drug costs for patients. These moves may also just be in response to pressure from policymakers and competitors, and they may not even be intended to lower drug prices. However, they are interesting steps towards transparency and clarity and a potential shift from the outdated to the new that should be reviewed in an industry that has been increasingly scrutinized.” Learn more about how these changes may impact healthcare in this article from the February issue of eSource.
A recent draft proposal introduced a voluntary Medicare program aimed at reducing drug shortages by providing monetary incentives to doctors and hospitals for securing a more sustainable supply of essential medicines. The framework lays out several key requirements including three year minimum contracts and performance against stated supply chain standards. Senator Mike Crapo notes, “Our bipartisan discussion draft would take meaningful strides toward mitigating and preventing prescription drug shortages, ensuring that patients can receive the care they need, when they need it."
What are your thoughts on the proposed program?
#Medicare#pharma#supplychain
Katie, thank you for all of our analysis. Could you email me the proposed rule? Thanking you in advance