AHA: CMS should reconsider MFN model

The Most Favored Nation (MFN) model interim final rule should be withdrawn immediately, the American Hospital Association (AHA) said in a January 25 letter to CMS.

The MFN model reduces Medicare Part B payments for certain drugs and biologicals to no more than the lowest price the drug manufacturers receive in countries with a similar level of economic development. The AHA contends that the rule is not a serious attempt at drug pricing reform because it does not directly address the cost of drugs. Instead, the rule places financial burden on provider organizations and forces them to divert resources to purchase drugs necessary for patient care, the AHA said.

CMS said in the rule that it expects the policy will impede patients’ access to drugs. The agency notes that the policy may reduce the availability of drugs covered under the MFN model and that it does not know what impact the rule will have:

If MFN participants choose not to provide MFN Model drugs or prescribe alternative therapies instead, beneficiaries may experience access to care impacts by having to find alternative care providers locally, having to travel to seek care from an excluded provider, receiving an alternative therapy that may have lower efficacy or greater risks, or postponing or forgoing treatment. There is significant uncertainty with these potential effects of the MFN Model. CMS will carefully monitor for evidence of these potential effects and conduct beneficiary surveys to assess impacts of the MFN Model on beneficiaries.

Given the uncertainty of these impacts, we are unable to quantify these potential effects of the MFN Model.

Although the MFN model was slated to go into effect January 1, there are multiple stays on the rule. U.S. District Courts in California and New York issued preliminary injunctions preventing the rule from being implemented. In December 2020, the U.S District Court for the District of Maryland issued a 14-day restraining order on the rule. On January 6, the court extended the restraining order through January 20.

Organizations should carefully monitor information from CMS on the status of the MFN model. It may be prudent to calculate the potential financial impact and its affect on patients.