Most Favored Nation (MFN)
Drug Revenue Integrity

NOTE: The District Court of Northern California has granted a preliminary injunction, which vacates the MFN rule until CMS completes the notice and comment process (generally required for final rules). This will extend the January 1 deadline at least another 60 days before the rule could be implemented. Find out more here: 0050-12-28-2020-ORDER-by-Judge-Vince-Chhabria-granting-27-Motion-for-Preliminary-Injunction.-vclc2-COURT-STAFF.pdf (legislink.com).

Are you ready for CMS MFN reimbursement on January 1?

On November 20, 2020, CMS announced a new innovation payment model, the Most Favored Nation (MFN) Model, which will change the way Part B providers are reimbursed for certain drugs and biologicals. Under the model, instead of paying providers the usual Medicare reimbursement rate of Average Sales Price (ASP) +6%, specific drugs will now be reimbursed at rates that are based on the lowest price drug manufacturers receive for the same product in other developed countries.

The AHA predicts the MFN policy will reduce hospital drug reimbursement by 65% on average when fully phased in.

2021 MFN Drug Reimbursement Model

Per CMS, the MFN Model will operate for seven years, beginning on January 1, 2021 and terminating on December 31, 2027.

Are you ready for CMS MFN reimbursement on January 1?

• How are you handling the new M1145 (manual, automated in EHR etc.)?
• What is your estimated revenue impact from the new rates?
• How will you know whether you are receiving all eligible reimbursement?

How Can Craneware Help Protect Hospitals From Reduced MFN Drug Reimbursement?

• Identifying meds at your organization, with Pharmacy ChargeLink or Chargesmaster Toolkit, that will require EHR and workflow adjustments to get paid
• Estimating the financial impact of this new reimbursement model
• Creating workflows for the new M1145 claim requirements
• Identifying meds at your organization that will require supplier/GPO negotiations, with Pharmacy ChargeLink

Contact us today to get the conversation started.

Interim Final Rule, CMS-5528-IFC, “Most Favored Nation (MFN) Model”:
https://innovation.cms.gov/media/document/mfn-ifc-rule

CMS MFN Model Fact Sheet:
https://www.cms.gov/newsroom/fact-sheets/fact-sheet-most-favored-nation-model-medicare-part-b-drugs-and-biologicals-interim-final-rule

CMS MFN Model homepage:
https://innovation.cms.gov/innovation-models/most-favored-nation-model

American Hospital Association’s statement on the MFN Model:
https://www.aha.org/press-releases/2020-11-20-aha-statement-most-favored-nation-model-interim-final-rule