Most Favored Nation (MFN) Model, 43618-43623 [2021-16886]
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that complies with the provisions of the
Act and applicable Federal regulations.
42 U.S.C. 7410(k); 40 CFR 52.02(a).
Thus, in reviewing SIP submissions, the
EPA’s role is to approve state choices,
provided that they meet the criteria of
the CAA. Accordingly, this action
merely approves state law as meeting
Federal requirements and does not
impose additional requirements beyond
those imposed by state law. For that
reason, this action:
• Is not a significant regulatory action
subject to review by the Office of
Management and Budget under
Executive Orders 12866 (58 FR 51735,
October 4, 1993) and 13563 (76 FR 3821,
January 21, 2011);
• Does not impose an information
collection burden under the provisions
of the Paperwork Reduction Act (44
U.S.C. 3501 et seq.);
• Is certified as not having a
significant economic impact on a
substantial number of small entities
under the Regulatory Flexibility Act (5
U.S.C. 601 et seq.);
• Does not contain any unfunded
mandate or significantly or uniquely
affect small governments, as described
in the Unfunded Mandates Reform Act
of 1995 (Pub. L. 104–4);
• Does not have Federalism
implications as specified in Executive
Order 13132 (64 FR 43255, August 10,
1999);
• Is not an economically significant
regulatory action based on health or
safety risks subject to Executive Order
13045 (62 FR 19885, April 23, 1997);
• Is not a significant regulatory action
subject to Executive Order 13211 (66 FR
28355, May 22, 2001);
• Is not subject to requirements of the
National Technology Transfer and
Advancement Act (NTTA) because this
rulemaking does not involve technical
standards; and
• Does not provide EPA with the
discretionary authority to address, as
appropriate, disproportionate human
health or environmental effects, using
practicable and legally permissible
methods, under Executive Order 12898
(59 FR 7629, February 16, 1994).
The SIP is not approved to apply on
any Indian reservation land or in any
other area where EPA or an Indian tribe
has demonstrated that a tribe has
jurisdiction. In those areas of Indian
country, the rule does not have tribal
implications and will not impose
substantial direct costs on tribal
governments or preempt tribal law as
specified by Executive Order 13175 (65
FR 67249, November 9, 2000).
List of Subjects in 40 CFR Part 52
Environmental protection, Air
pollution control, Carbon monoxide,
Incorporation by reference, Particulate
matter, Volatile organic compounds.
Dated: July 30, 2021.
Edward H. Chu,
Acting Regional Administrator, Region 7.
For the reasons stated in the
preamble, EPA proposes to amend 40
CFR part 52 as set forth below:
PART 52—APPROVAL AND
PROMULGATION OF
IMPLEMENTATION PLANS
1. The authority citation for part 52
continues to read as follows:
■
Authority: 42 U.S.C. 7401 et seq.
Subpart AA—Missouri
2. In § 52.1320, the table in paragraph
(c) is amended by revising the entry
‘‘10–6.330’’ to read as follows:
■
§ 52.1320
*
Identification of plan.
*
*
(c) * * *
*
*
EPA-APPROVED MISSOURI REGULATIONS
Missouri citation
State
effective
date
Title
EPA approval date
Explanation
Missouri Department of Natural Resources
*
*
*
*
*
*
*
Chapter 6—Air Quality Standards, Definitions, Sampling and Reference Methods, and Air Pollution Control Regulations for the State of
Missouri
*
10–6.330 ...........
*
*
Restriction of Emissions From
7/30/2020
Batch-Type Charcoal Kilns.
*
*
*
*
*
*
*
*
*
[Date of publication of the final rule in the
Federal Register], [Federal Register citation of the final rule].
*
*
[FR Doc. 2021–16846 Filed 8–9–21; 8:45 am]
*
*
Centers for Medicare & Medicaid
Services
42 CFR Part 513
DATES:
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Most Favored Nation (MFN) Model
ADDRESSES:
Centers for Medicare &
Medicaid Services (CMS), HHS.
ACTION: Proposed rule.
AGENCY:
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SUMMARY:
To be assured consideration,
comments must be received at one of
the addresses provided below, by
October 12, 2021.
[CMS–5528–P]
17:27 Aug 09, 2021
*
This proposed rule proposes
to rescind the Most Favored Nation
Model interim final rule with comment
period that appeared in the November
27, 2020, Federal Register.
DEPARTMENT OF HEALTH AND
HUMAN SERVICES
BILLING CODE 6560–50–P
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In commenting, please refer
to file code CMS–5528–P.
Comments, including mass comment
submissions, must be submitted in one
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of the following three ways (please
choose only one of the ways listed):
1. Electronically. You may submit
electronic comments on this regulation
to https://www.regulations.gov. Follow
the ‘‘Submit a comment’’ instructions.
2. By regular mail. You may mail
written comments to the following
address ONLY: Centers for Medicare &
Medicaid Services, Department of
Health and Human Services, Attention:
CMS–5528–P, P.O. Box 8013, Baltimore,
MD 21244–8013.
Please allow sufficient time for mailed
comments to be received before the
close of the comment period.
3. By express or overnight mail. You
may send written comments to the
following address ONLY: Centers for
Medicare & Medicaid Services,
Department of Health and Human
Services, Attention: CMS–5528–P, Mail
Stop C4–26–05, 7500 Security
Boulevard, Baltimore, MD 21244–1850.
For information on viewing public
comments, see the beginning of the
SUPPLEMENTARY INFORMATION section.
FOR FURTHER INFORMATION CONTACT: Lara
Strawbridge, (410) 786–7400 or MFN@
cms.hhs.gov.
Inspection
of Public Comments: All comments
received before the close of the
comment period are available for
viewing by the public, including any
personally identifiable or confidential
business information that is included in
a comment. We post all comments
received before the close of the
comment period on the following
website as soon as possible after they
have been received: https://
www.regulations.gov. Follow the search
instructions on that website to view
public comments. CMS will not post on
Regulations.gov public comments that
make threats to individuals or
institutions or suggest that the
individual will take actions to harm any
individual. CMS continues to encourage
individuals not to submit duplicative
comments. We will post acceptable
comments from multiple unique
commenters even if the content is
identical or nearly identical to other
comments.
SUPPLEMENTARY INFORMATION:
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I. Background
Increases in Part B prescription drug
spending significantly outpace the
growth in spending on other Medicare
Part B services,1 and prices in the
1 Nguyen X. Nguyen and Steve Sheingold.
Medicare Part B Drugs: Trends in Spending and
Utilization, 2006–2017. Washington, DC: Office of
the Assistant Secretary for Planning and Evaluation,
U.S. Department of Health and Human Services.
November 20, 2020 (https://aspe.hhs.gov/pdf-
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United States (U.S.) for most Medicare
Part B drugs with the highest Medicare
spending far exceed prices in other
countries.2 3 Specifically, drugs have
consistently been a major contributor to
the overall Medicare Part B spending
trend. Medicare Part B fee-for-service
(FFS) spending for separately payable
physician-administered drugs and drugs
furnished in a hospital outpatient
department represented about 11
percent of Medicare Part B FFS benefit
spending in 2015, but accounted for
about 37 percent of the change in
Medicare Part B FFS benefit spending
from 2015 to 2020.4 In addition to the
continued growth in spending,
Medicare pays substantially more than
other countries for many of the highestcost Medicare Part B drugs that
beneficiaries receive in an outpatient
setting for which Medicare Part B allows
separate payment.5 In many instances,
Medicare pays more than twice as much
for certain drugs as other countries do.6
report/medicare-part-b-drugs-spending-andutilization).
2 ‘‘Comparison of U.S. and International Prices
for Top Medicare Part B Drugs by Total
Expenditures’’ accessed via https://aspe.hhs.gov/
pdf-report/comparison-us-and-international-pricestop-medicare-part-b-drugs-total-expenditures; ElKilani Z, Finegold K, Mulcahy A, and Bosworth A.
Medicare FFS Part B and International Drug Prices:
A Comparison of the Top 50 Drugs. Washington,
DC: Office of the Assistant Secretary for Planning
and Evaluation, U.S. Department of Health and
Human Services. November 20, 2020 (https://
aspe.hhs.gov/pdf-report/medicare-ffs-part-b-andinternational-drug-prices).
3 Individual countries differ in the regulatory
processes and standards governing approval of
drugs and biologicals. Use of international drug
prices in the MFN Model should not be interpreted
to connote FDA approval or to otherwise describe
any scientific or regulatory relationship between
U.S.-approved and non-U.S.-approved products.
4 2020 Annual Report of the Boards of Trustees
of the Federal Hospital Insurance and Federal
Supplementary Medical Insurance Trust Funds.
Accessed via: https://www.cms.gov/files/document/
2020-medicare-trustees-report.pdf.
5 ‘‘Comparison of U.S. and International Prices
for Top Medicare Part B Drugs by Total
Expenditures’’ accessed via https://aspe.hhs.gov/
pdf-report/comparison-us-and-international-pricestop-medicare-part-b-drugs-total-expenditures; ElKilani Z, Finegold K, Mulcahy A, and Bosworth A.
Medicare FFS Part B and International Drug Prices:
A Comparison of the Top 50 Drugs. Washington,
DC: Office of the Assistant Secretary for Planning
and Evaluation, U.S. Department of Health and
Human Services. November 20, 2020 (https://
aspe.hhs.gov/pdf-report/medicare-ffs-part-b-andinternational-drug-prices).
6 ‘‘Comparison of U.S. and International Prices for
Top Medicare Part B Drugs by Total Expenditures’’
accessed via https://aspe.hhs.gov/pdf-report/
comparison-us-and-international-prices-topmedicare-part-b-drugs-total-expenditures; El-Kilani
Z, Finegold K, Mulcahy A, Bosworth A. Medicare
FFS Part B and International Drug Prices: A
Comparison of the Top 50 Drugs. Washington, DC:
Office of the Assistant Secretary for Planning and
Evaluation, U.S. Department of Health and Human
Services. November 20, 2020 (https://aspe.hhs.gov/
pdf-report/medicare-ffs-part-b-and-internationaldrug-prices).
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This imbalance in payment arises
because Medicare generally establishes
the payment for separately payable
Medicare Part B drugs using the
methodology in section 1847A of the
Social Security Act (the Act). In most
cases, this means payment is based on
the average sales price (ASP) plus a
statutorily mandated 6 percent add-on.
Under this methodology, the Medicare
program does not get the benefit of the
substantial discounts provided in other
countries, because ASP is calculated
using only the prices that manufacturers
charge to certain U.S.-based purchasers.
ASP-based payments may also
encourage the use of more expensive
drugs because the dollar amount of the
6 percent add-on portion is larger for
drugs with higher ASPs.7
The Most Favored Nation (MFN)
Model interim final rule with comment
period (85 FR 76180) 8 (hereafter,
referred to as ‘‘the November 2020
interim final rule’’) was published in the
Federal Register on November 27, 2020,
and was effective the same day, with a
60-day comment period. The 60-day
comment period on the November 2020
interim final rule closed on January 26,
2021. The November 2020 interim final
rule established a 7-year nationwide,
mandatory MFN Model, under section
1115A of the Act, with the model
performance period beginning on
January 1, 2021. The MFN Model would
test an alternative way for Medicare to
pay for certain Medicare Part B single
source drugs and biologicals (including
biosimilar biologicals). For additional
information on the MFN Model, see the
November 2020 interim final rule and
the MFN Model website.9
In the November 2020 interim final
rule, Waiver of Proposed Rulemaking
and Delay in Effective Date, we stated
that we found that there was good cause
to waive the notice and comment
requirements under sections 553(b)(B)
of the Administrative Procedure Act and
section 1871(b)(2)(C) of the Act because
of the particularly acute need for
affordable Medicare Part B drugs in the
midst of the COVID–19 pandemic (85
FR 76249).
In December 2020, while the
comment period was open, four
lawsuits were filed related to CMS’s
waivers of proposed rulemaking and
delay in effective date as well as other
aspects of the MFN Model and the
7 MedPAC, June 2017, ‘‘Medicare Part B Drug
Payment Policy Issues,’’ accessed via https://
medpac.gov/docs/default-source/reports/jun17_
ch2.pdf
8 Available at https://www.govinfo.gov/content/
pkg/FR-2020-11-27/pdf/2020-26037.pdf.
9 Available at https://innovation.cms.gov/
innovation-models/most-favored-nation-model.
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November 2020 interim final rule:
Association of Community Cancer
Centers v. Azar, No. 8:20–cv–03531 (D.
Md.); California Life Sciences Ass’n v.
CMS, No. 3:20–cv–08603 (N.D. Ca);
Regeneron Pharmaceuticals v. HHS, No.
7:20–cv–10488 (S.D.N.Y.); and
Community Oncology Alliance, Inc. v.
HHS, No.1:20–cv–03604 (D.D.C.). On
December 28, 2020, the U.S. District
Court for the Northern District of
California issued a nationwide
preliminary injunction in California Life
Sciences, which preliminarily enjoined
HHS from implementing the MFN
Model and the November 2020 interim
final rule. The lawsuits in the U.S.
District Court for the District of
Maryland and the U.S. District Court for
the District of Columbia were stayed
based on the nationwide preliminary
injunction. On December 30, 2020, the
U.S. District Court for the Southern
District of New York issued a
preliminary injunction in Regeneron
Pharmaceuticals v. HHS, which
preliminarily enjoined HHS from
applying the November 2020 interim
final rule to Regeneron’s drug EYLEA®
(aflibercept).
On January 8, 2021, the Solicitor
General determined not to appeal the
preliminary injunction issued in
California Life Sciences. On January 19,
2021, at the parties’ request, the U.S.
Northern District of California stayed
the case until at least April 23, 2021.
Subsequently, on April 26, 2021,
another stay was granted until July 26,
2021. On July 29, 2021, another stay was
granted until September 27, 2021.
In Regeneron Pharmaceuticals, on
February 2, 2021, the plaintiff filed a
letter seeking leave to file a motion for
summary judgment, and HHS filed a
letter seeking leave to file a motion for
a stay. On February 10, 2021, the U.S.
District Court for the Southern District
of New York granted HHS’s request and
stayed the case for 90 days (that is,
through May 11, 2021). On May 10,
2021, the stay in this case was extended
for an additional 90 days, until August
9, 2021, to give HHS time to consider
how to proceed with the rule in light of
the ‘‘unanimous’’ court decisions to
date. In its order, the court noted that
HHS should ‘‘not assume that another
stay will be granted,’’ as the stays gave
HHS ‘‘a half-year to reach a conclusion
regarding how to proceed[.]’’
As a result of the nationwide
preliminary injunction, the MFN Model
was not implemented on January 1,
2021, as contemplated in the November
2020 interim final rule. While the
nationwide preliminary injunction has
been in place, CMS considered how to
proceed given stakeholders’ concerns
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about potential impacts of the MFN
Model.
II. Provisions of the Proposed
Regulations
We received approximately 1,166
timely pieces of correspondence in
response to the November 2020 interim
final rule. We appreciate the comments
that we received. We note that many
commenters agreed with HHS about the
urgency of addressing high prescription
drug prices, but nearly all of the
commenters expressed concern about
beginning the model on January 1, 2021,
including starting the model during the
COVID–19 pandemic. Given that the
nationwide preliminary injunction
precluded implementation of the MFN
Model on January 1, 2021, as
contemplated, that multiple courts
found procedural issues with the
November 2020 interim final rule, and
that stakeholders expressed concern
about the model start date,10 we are
proposing to rescind regulations added
by the November 2020 interim final rule
and remove the associated regulatory
text at 42 CFR part 513. We believe this
proposed rule communicates how we
wish to proceed with the November
2020 interim final rule to the courts and
the public. Since the preliminary
injunctions prevented the November
2020 interim final rule from taking
effect, we do not believe there would be
any disruption to reliance interests or
Medicare program administration if this
proposed rule were to take effect. If
finalized, our proposal would allow us
to take time to further consider the
issues identified by commenters and
would address the November 2020
interim final rule’s procedural
deficiencies by rescinding it. We note
that this proposed rule (that is, our
proposal to effectively withdraw an
interim final rule with comment period)
is limited to the codification of the
November 2020 interim final rule, and
does not reflect any judgment by HHS
regarding future policy.
On July 9, 2021, President Biden
signed an Executive Order on Promoting
Competition in the American Economy
that, in part, directs the Secretary of
HHS to take steps to lower the prices of
and improve access to prescription
drugs and biologicals. HHS is exploring
10 For example, commenters stated that the MFN
Model should not start during the COVID–19
pandemic, and in addition that the model should
not begin on January 1, 2021, while the public
comment period for the November 2020 interim
final rule was ongoing (until January 26, 2021).
Further, commenters stated that CMS failed to
allow MFN participants sufficient time to prepare
for model start and to develop and deploy new
systems with distributors and customers to exclude
model sales from ASP reporting.
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opportunities to promote value-based
care for our beneficiaries; to address the
high cost of Medicare Part B drugs,
manufacturers’ pricing, and the
resulting growth in Medicare Part B
drug spending; and to modernize the
Medicare program to improve the
quality and cost of care for beneficiaries.
We will continue to carefully consider
the comments we received on the
November 2020 interim final rule as we
explore all options to incorporate value
into payments for Medicare Part B drugs
and improve beneficiaries’ access to
evidence-based care.
We invite comments on our proposal
to rescind and remove the regulations at
42 CFR part 513, which also would
withdraw the MFN Model.
III. Collection of Information
Requirements
As stated in section 1115A(d)(3) of the
Act, Chapter 35 of title 44, United States
Code, shall not apply to the testing and
evaluation of CMS Innovation Center
Models. However, costs incurred
through information collections were
described in sections III.H., III.I.b., and
VI.C.5. of the November 2020 interim
final rule (85 FR 76221, 76222, and
76244, respectively) . If this proposed
rule is finalized, requirements related to
the information collection described in
the November 2020 interim final rule
would not continue. As such, resulting
savings are included in the estimate of
the impact of our proposal to withdraw
the MFN Model in section V.C. of this
proposed rule. Further, this proposed
rule does not impose information
collection requirements, that is,
reporting, recordkeeping or third-party
disclosure requirements. Consequently,
there is no need for review by the Office
of Management and Budget under the
authority of the Paperwork Reduction
Act of 1995 (44 U.S.C. 3501 et seq.).
IV. Response to Comments
Because of the large number of public
comments we normally receive on
Federal Register documents, we are not
able to acknowledge or respond to them
individually. We will consider all
comments we receive by the date and
time specified in the DATES section of
this preamble, and, when we proceed
with a subsequent document, we will
respond to the comments in the
preamble to that document.
V. Regulatory Impact Analysis
A. Statement of Need
The purpose of this proposed rule is
to propose the rescission of the Most
Favored Nation Model, codified by an
interim final rule with comment period
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that appeared in the November 27, 2020
Federal Register, and remove the
associated regulatory text at 42 CFR part
513, which also would withdraw the
MFN Model.
B. Overall Impact
We have examined the impact of this
rule as required by Executive Order
12866 on Regulatory Planning and
Review (September 30, 1993), Executive
Order 13563 on Improving Regulation
and Regulatory Review (January 18,
2011), the Regulatory Flexibility Act
(RFA) (September 19, 1980, Pub. L. 96–
354), section 1102(b) of the Act, section
202 of the Unfunded Mandates Reform
Act of 1995 (March 22, 1995; Pub. L.
104–4), Executive Order 13132 on
Federalism (August 4, 1999), and the
Congressional Review Act (5 U.S.C.
804(2)).
Executive Orders 12866 and 13563
direct agencies to assess all costs and
benefits of available regulatory
alternatives and, if regulation is
necessary, to select regulatory
approaches that maximize net benefits
(including potential economic,
environmental, public health and safety
effects, distributive impacts, and
equity). Section 3(f) of Executive Order
12866 defines a ‘‘significant regulatory
action’’ as an action that is likely to
result in a rule: (1) Having an annual
effect on the economy of $100 million
or more in any one year, or adversely
and materially affecting a sector of the
economy, productivity, competition,
jobs, the environment, public health or
safety, or state, local or tribal
governments or communities (also
referred to as ‘‘economically
significant’’); (2) creating a serious
inconsistency or otherwise interfering
with an action taken or planned by
another agency; (3) materially altering
the budgetary impacts of entitlement
grants, user fees, or loan programs or the
rights and obligations of recipients
thereof; or (4) raising novel legal or
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potential impacts were estimated to
occur beginning January 2021 through
December 2028, in alignment with a
January 1, 2021 model start. However,
because the MFN Model was not
implemented on January 1, 2021, as
contemplated in the November 2020
interim final rule, such effects have not
occurred.
Nevertheless and notwithstanding the
nationwide preliminary injunction, this
analysis uses a baseline in which the
November 2020 interim final rule was
implemented on January 1, 2021, to
calculate the monetized estimates of the
effects of this proposed rule. We
maintain the analytical approach
described in the regulatory impact
analysis of the November 2020 interim
final rule, and for the purpose of
quantifying the effects of this proposed
rule, assume that the regulations added
by the November 2020 interim final rule
will be in full effect if this proposed rule
is not finalized. As a result of the
rescission of the regulations added by
the November 2020 interim final rule,
this proposed rule would, if finalized,
prevent the occurrence of the estimated
costs and transfers presented in the
November 2020 interim final rule. We
summarize this result in Tables 1 and 2,
which illustrate, inversely, the
monetized estimates contained in Table
17 (85 FR 76247) and Table 18 (85 FR
76248) of the November 2020 interim
final rule. The period covered shown in
Tables 1 and 2 begins January 2021 in
alignment with the accounting
statements and tables presented in the
November 2020 interim final rule. This
approach illustrates that this proposed
rule, if finalized, would prevent the
realization of the annualized/
monetarized estimates of costs and
transfers that were presented in the
November 2020 interim final rule.
Because the MFN Model was not
implemented, readers should
understand that this proposed rule does
not affect conditions in the past.
policy issues arising out of legal
mandates, the President’s priorities, or
the principles set forth in the Executive
Order.
A regulatory impact analysis (RIA)
must be prepared for major rules with
significant regulatory actions or with
economically significant effects ($100
million or more in any 1 year). Based on
our estimates, OMB’s Office of
Information and Regulatory Affairs has
determined this rulemaking is
‘‘economically significant’’ as measured
by the $100 million threshold.
Accordingly, we have prepared an RIA
that to the best of our ability presents
the costs and benefits of the rulemaking.
C. Detailed Economic Analysis
Removing the regulatory text at 42
CFR part 513, which also would
withdraw the MFN Model, would mean
that the annualized/monetarized
estimates of costs and transfers
presented in the November 2020 interim
final rule (85 FR 76235 through 76248)
would not be realized. The regulatory
impact analysis of the November 2020
interim final rule estimated that the
MFN Model would result in substantial
overall savings for the Medicare
program, the Medicaid program, and
beneficiaries, and that model
participants would experience costs
associated with complying with the
regulations, survey completion, and
potential requests for financial hardship
exemption.
In the November 2020 interim final
rule, we presented estimates from the
CMS Office of the Actuary (OACT) (85
FR 76236) and the HHS Office of the
Assistant Secretary for Planning and
Evaluation (ASPE) (85 FR 76240). We
noted that there is much uncertainty
around the assumptions for both the
OACT and ASPE estimates, and refer
readers to section VI.C. of the November
2020 interim final rule for a more
complete discussion of the estimated
impacts of the MFN Model. These
TABLE 1—ACCOUNTING STATEMENT: ESTIMATED IMPACTS FROM CY 2021 TO CY 2028 AS A RESULT OF PROVISIONS OF
THIS PROPOSED RULE BASED ON THE OACT ESTIMATE
Units
Category
Estimates
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Year dollar
Costs:
Annualized Monetized ($million/year) ......
To Whom ........................................................
¥29.4
¥27.1
Discount rate
(%)
Period covered
2018
2018
7
3
January 2021—December 2028.
January 2021—December 2028.
2018
2018
7
3
January 2021—December 2027.
January 2021—December 2027.
Hospital/physicians.
Annualized Monetized ($million/year) ......
¥0.4
¥0.4
Transfers:
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TABLE 1—ACCOUNTING STATEMENT: ESTIMATED IMPACTS FROM CY 2021 TO CY 2028 AS A RESULT OF PROVISIONS OF
THIS PROPOSED RULE BASED ON THE OACT ESTIMATE—Continued
Units
Category
Estimates
Year dollar
Annualized Monetized ($million/year) ......
From Whom to Whom ....................................
11,502.5
11,906.3
4,087.2
4,228.3
7
3
January 2021—December 2027.
January 2021—December 2027.
2018
2018
7
3
January 2021—December 2027.
January 2021—December 2027.
Beneficiaries to hospitals/physicians and MA plans.
Annualized Monetized ($million/year) ......
From Whom to Whom ....................................
2018
2018
Period covered
Federal Government to hospitals/physicians and MA plans.
Annualized Monetized ($million/year) ......
From Whom to Whom ....................................
Discount rate
(%)
577.5
596.5
2018
2018
7
3
January 2021—December 2027.
January 2021—December 2027.
States to hospitals/physicians and MA plans.
TABLE 2—ACCOUNTING STATEMENT: ESTIMATED IMPACTS FROM CY 2021 TO CY 2028 AS A RESULT OF THE PROVISIONS
OF THIS PROPOSED RULE BASED ON THE ASPE ESTIMATE
Units
Category
Estimates
Year dollar
Costs:
Annualized Monetized ($million/year) ......
To Whom ........................................................
¥29.4
¥27.1
Transfers:
Annualized Monetized ($million/year) ......
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D. Regulatory Flexibility Act (RFA)
The RFA requires agencies to analyze
options for regulatory relief of small
entities. For purposes of the RFA, small
entities include small businesses,
nonprofit organizations, and small
governmental jurisdictions. Most
hospitals and most other providers and
suppliers are small entities, either by
nonprofit status or by having revenues
of less than $8 million to $41.5 million
in any 1 year. Individuals and states are
not included in the definition of a small
entity. For details, see the Small
Business Administration’s ‘‘Table of
Small Business Size Standards’’ at
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16:29 Aug 09, 2021
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7
3
January 2021—December 2028.
January 2021—December 2028.
¥0.4
¥0.4
2018
2018
7
3
January 2021—December 2027.
January 2021—December 2027.
7,058.3
7,276.5
2018
2018
7
3
January 2021—December 2027.
January 2021—December 2027.
4,504.9
4,638.6
2018
2018
7
3
January 2021—December 2027.
January 2021—December 2027.
Beneficiaries to hospitals/physicians and MA plans
Annualized Monetized ($million/year) ......
From Whom to Whom ....................................
2018
2018
Federal Government to hospitals/physicians and MA plans
Annualized Monetized ($million/year) ......
From Whom to Whom ....................................
Period covered
Hospital/physicians
Annualized Monetized ($million/year) ......
From Whom to Whom ....................................
Discount rate
(%)
342.4
351.6
2018
2018
7
3
January 2021—December 2027.
January 2021—December 2027.
States to hospitals/physicians and MA plans
https://www.sba.gov/document/support-table-size-standards. The rule of thumb
used by HHS for determining whether
an impact is ‘‘significant’’ is an adverse
effect equal to 3 percent or more of total
annual revenues.
This proposed rule, if finalized,
would impact the vast majority of
Medicare-participating providers and
suppliers that submit claims for
separately payable Medicare Part B
drugs by preventing the impacts
described in the November 2020 interim
final rule (85 FR 76246) from being
realized. There are over 20,000 small
entities that would be included or
PO 00000
Frm 00024
Fmt 4702
Sfmt 4702
affected by the MFN Model if the model
was implemented. We refer readers to
Table 3 and Table 8 in the November
2020 interim final rule (85 FR 76195
and 76219, respectively) to see the
number of entities, as well as the types
of providers and suppliers, that would
be most likely impacted by the MFN
Model. This proposed rule proposes to
withdraw the MFN Model, and therefore
would likely impact these same entities.
Accordingly, we have determined that a
Regulatory Flexibility Analysis (RFA) is
required. As its measure of significant
economic impact on a substantial
number of small entities, HHS uses a
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change in revenue of more than 3 to 5
percent. We do believe that this
threshold will be reached by the
requirements in this proposed rule.
Therefore, the Secretary has certified
that this proposed will have a
significant economic impact on a
substantial number of small entities.
The RFA presented in the November
2020 interim final rule (85 FR 76245)
describes the potential impact of the
MFN Model, if it was implemented, on
small entities. If finalized, this proposed
rule would prevent those impacts from
being realized. Specifically, the lower
drug payments and alternative add-on
payments described in section III.F. of
the November 2020 interim final rule
would not occur. Instead, payment for
submitted claims would be made under
the applicable Medicare payment
methodology. This RFA, together with
the preamble, constitutes the required
analysis.
In addition, section 1102(b) of the Act
requires us to prepare an RIA if a rule
may have a significant impact on the
operations of a substantial number of
small rural hospitals. This analysis must
conform to the provisions of section 603
of the RFA. For purposes of section
1102(b) of the Act, we define a small
rural hospital as a hospital that is
located outside of a Metropolitan
Statistical Area for Medicare payment
regulations and has fewer than 100
beds. Similar to urban entities, we
estimate that this proposed rule, if
finalized, would have a significant
impact on small rural hospitals by
preventing the impacts described in the
November 2020 interim final rule (85 FR
76246) from being realized. Specifically,
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if the MFN Model was implemented,
these rural entities would experience
drug payment reductions and overall
payment reductions similar to urban
entities. Instead, if this proposed rule is
finalized, payment for submitted claims
would be made under the applicable
Medicare payment methodology.
We welcome comments on our
estimate of significantly affected
providers and suppliers and the
magnitude of estimated effects for this
proposed rule.
E. Unfunded Mandates Reform Act
(UMRA)
Section 202 of the Unfunded
Mandates Reform Act of 1995 (UMRA)
also requires that agencies assess
anticipated costs and benefits before
issuing any rule whose mandates
require spending in any 1 year of $100
million in 1995 dollars, updated
annually for inflation. In 2021, that
threshold is approximately $158
million. As discussed in section V.C. of
this proposed rule, the financial impacts
for States (that is, an estimated overall
reduction in State spending) presented
in the November 2020 interim final rule
(85 FR 76235 through 76248) would not
be realized. This proposed rule does not
mandate any spending by State, local, or
tribal governments, or by the private
sector, and hence an UMRA analysis is
not required.
F. Federalism
Executive Order 13132 establishes
certain requirements that an agency
must meet when it promulgates a
proposed rule (and subsequent final
rule) that imposes substantial direct
requirement costs on State and local
PO 00000
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Fmt 4702
Sfmt 9990
43623
governments, preempts State law, or
otherwise has Federalism implications.
As discussed in section V.C. of this
proposed rule, the financial impacts for
States (that is, an estimated overall
reduction in State spending) presented
in the November 2020 interim final rule
(85 FR 76235 through 76248) would not
be realized. Since this regulation does
not impose any costs on State or local
governments, preempt State law, or
otherwise have Federalism implications,
the requirements of Executive Order
13132 are not applicable.
In accordance with the provisions of
Executive Order 12866, this proposed
rule was reviewed by the Office of
Management and Budget.
Chiquita Brooks-LaSure,
Administrator of the Centers for
Medicare & Medicaid Services,
approved this document on July 21,
2021.
List of Subjects for 42 CFR 513
Administrative practice and
procedure, Health facilities, Medicare,
Reporting and recordkeeping
requirements.
PART 513—[REMOVED]
For the reasons set forth in the
preamble and under the authority at 5
U.S.C. 301, the Centers for Medicare &
Medicaid Services proposes to remove
42 CFR part 513.
■
Dated: August 3, 2021.
Xavier Becerra,
Secretary, Department of Health and Human
Services.
[FR Doc. 2021–16886 Filed 8–6–21; 4:15 pm]
BILLING CODE 4120–01–P
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]]>Agencies
[Federal Register Volume 86, Number 151 (Tuesday, August 10, 2021)]
[Proposed Rules]
[Pages 43618-43623]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-16886]
=======================================================================
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
42 CFR Part 513
[CMS-5528-P]
RIN 0938-AT91
Most Favored Nation (MFN) Model
AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.
ACTION: Proposed rule.
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SUMMARY: This proposed rule proposes to rescind the Most Favored Nation
Model interim final rule with comment period that appeared in the
November 27, 2020, Federal Register.
DATES: To be assured consideration, comments must be received at one of
the addresses provided below, by October 12, 2021.
ADDRESSES: In commenting, please refer to file code CMS-5528-P.
Comments, including mass comment submissions, must be submitted in
one
[[Page 43619]]
of the following three ways (please choose only one of the ways
listed):
1. Electronically. You may submit electronic comments on this
regulation to https://www.regulations.gov. Follow the ``Submit a
comment'' instructions.
2. By regular mail. You may mail written comments to the following
address ONLY: Centers for Medicare & Medicaid Services, Department of
Health and Human Services, Attention: CMS-5528-P, P.O. Box 8013,
Baltimore, MD 21244-8013.
Please allow sufficient time for mailed comments to be received
before the close of the comment period.
3. By express or overnight mail. You may send written comments to
the following address ONLY: Centers for Medicare & Medicaid Services,
Department of Health and Human Services, Attention: CMS-5528-P, Mail
Stop C4-26-05, 7500 Security Boulevard, Baltimore, MD 21244-1850.
For information on viewing public comments, see the beginning of
the SUPPLEMENTARY INFORMATION section.
FOR FURTHER INFORMATION CONTACT: Lara Strawbridge, (410) 786-7400 or
[email protected].
SUPPLEMENTARY INFORMATION: Inspection of Public Comments: All comments
received before the close of the comment period are available for
viewing by the public, including any personally identifiable or
confidential business information that is included in a comment. We
post all comments received before the close of the comment period on
the following website as soon as possible after they have been
received: https://www.regulations.gov. Follow the search instructions on
that website to view public comments. CMS will not post on
Regulations.gov public comments that make threats to individuals or
institutions or suggest that the individual will take actions to harm
any individual. CMS continues to encourage individuals not to submit
duplicative comments. We will post acceptable comments from multiple
unique commenters even if the content is identical or nearly identical
to other comments.
I. Background
Increases in Part B prescription drug spending significantly
outpace the growth in spending on other Medicare Part B services,\1\
and prices in the United States (U.S.) for most Medicare Part B drugs
with the highest Medicare spending far exceed prices in other
countries.2 3 Specifically, drugs have consistently been a
major contributor to the overall Medicare Part B spending trend.
Medicare Part B fee-for-service (FFS) spending for separately payable
physician-administered drugs and drugs furnished in a hospital
outpatient department represented about 11 percent of Medicare Part B
FFS benefit spending in 2015, but accounted for about 37 percent of the
change in Medicare Part B FFS benefit spending from 2015 to 2020.\4\ In
addition to the continued growth in spending, Medicare pays
substantially more than other countries for many of the highest-cost
Medicare Part B drugs that beneficiaries receive in an outpatient
setting for which Medicare Part B allows separate payment.\5\ In many
instances, Medicare pays more than twice as much for certain drugs as
other countries do.\6\
---------------------------------------------------------------------------
\1\ Nguyen X. Nguyen and Steve Sheingold. Medicare Part B Drugs:
Trends in Spending and Utilization, 2006-2017. Washington, DC:
Office of the Assistant Secretary for Planning and Evaluation, U.S.
Department of Health and Human Services. November 20, 2020 (https://aspe.hhs.gov/pdf-report/medicare-part-b-drugs-spending-and-utilization).
\2\ ``Comparison of U.S. and International Prices for Top
Medicare Part B Drugs by Total Expenditures'' accessed via https://aspe.hhs.gov/pdf-report/comparison-us-and-international-prices-top-medicare-part-b-drugs-total-expenditures; El-Kilani Z, Finegold K,
Mulcahy A, and Bosworth A. Medicare FFS Part B and International
Drug Prices: A Comparison of the Top 50 Drugs. Washington, DC:
Office of the Assistant Secretary for Planning and Evaluation, U.S.
Department of Health and Human Services. November 20, 2020 (https://aspe.hhs.gov/pdf-report/medicare-ffs-part-b-and-international-drug-prices).
\3\ Individual countries differ in the regulatory processes and
standards governing approval of drugs and biologicals. Use of
international drug prices in the MFN Model should not be interpreted
to connote FDA approval or to otherwise describe any scientific or
regulatory relationship between U.S.-approved and non-U.S.-approved
products.
\4\ 2020 Annual Report of the Boards of Trustees of the Federal
Hospital Insurance and Federal Supplementary Medical Insurance Trust
Funds. Accessed via: https://www.cms.gov/files/document/2020-medicare-trustees-report.pdf.
\5\ ``Comparison of U.S. and International Prices for Top
Medicare Part B Drugs by Total Expenditures'' accessed via https://aspe.hhs.gov/pdf-report/comparison-us-and-international-prices-top-medicare-part-b-drugs-total-expenditures; El-Kilani Z, Finegold K,
Mulcahy A, and Bosworth A. Medicare FFS Part B and International
Drug Prices: A Comparison of the Top 50 Drugs. Washington, DC:
Office of the Assistant Secretary for Planning and Evaluation, U.S.
Department of Health and Human Services. November 20, 2020 (https://aspe.hhs.gov/pdf-report/medicare-ffs-part-b-and-international-drug-prices).
\6\ ``Comparison of U.S. and International Prices for Top
Medicare Part B Drugs by Total Expenditures'' accessed via https://aspe.hhs.gov/pdf-report/comparison-us-and-international-prices-top-medicare-part-b-drugs-total-expenditures; El-Kilani Z, Finegold K,
Mulcahy A, Bosworth A. Medicare FFS Part B and International Drug
Prices: A Comparison of the Top 50 Drugs. Washington, DC: Office of
the Assistant Secretary for Planning and Evaluation, U.S. Department
of Health and Human Services. November 20, 2020 (https://aspe.hhs.gov/pdf-report/medicare-ffs-part-b-and-international-drug-prices).
---------------------------------------------------------------------------
This imbalance in payment arises because Medicare generally
establishes the payment for separately payable Medicare Part B drugs
using the methodology in section 1847A of the Social Security Act (the
Act). In most cases, this means payment is based on the average sales
price (ASP) plus a statutorily mandated 6 percent add-on. Under this
methodology, the Medicare program does not get the benefit of the
substantial discounts provided in other countries, because ASP is
calculated using only the prices that manufacturers charge to certain
U.S.-based purchasers. ASP-based payments may also encourage the use of
more expensive drugs because the dollar amount of the 6 percent add-on
portion is larger for drugs with higher ASPs.\7\
---------------------------------------------------------------------------
\7\ MedPAC, June 2017, ``Medicare Part B Drug Payment Policy
Issues,'' accessed via https://medpac.gov/docs/default-source/reports/jun17_ch2.pdf
---------------------------------------------------------------------------
The Most Favored Nation (MFN) Model interim final rule with comment
period (85 FR 76180) \8\ (hereafter, referred to as ``the November 2020
interim final rule'') was published in the Federal Register on November
27, 2020, and was effective the same day, with a 60-day comment period.
The 60-day comment period on the November 2020 interim final rule
closed on January 26, 2021. The November 2020 interim final rule
established a 7-year nationwide, mandatory MFN Model, under section
1115A of the Act, with the model performance period beginning on
January 1, 2021. The MFN Model would test an alternative way for
Medicare to pay for certain Medicare Part B single source drugs and
biologicals (including biosimilar biologicals). For additional
information on the MFN Model, see the November 2020 interim final rule
and the MFN Model website.\9\
---------------------------------------------------------------------------
\8\ Available at https://www.govinfo.gov/content/pkg/FR-2020-11-27/pdf/2020-26037.pdf.
\9\ Available at https://innovation.cms.gov/innovation-models/most-favored-nation-model.
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In the November 2020 interim final rule, Waiver of Proposed
Rulemaking and Delay in Effective Date, we stated that we found that
there was good cause to waive the notice and comment requirements under
sections 553(b)(B) of the Administrative Procedure Act and section
1871(b)(2)(C) of the Act because of the particularly acute need for
affordable Medicare Part B drugs in the midst of the COVID-19 pandemic
(85 FR 76249).
In December 2020, while the comment period was open, four lawsuits
were filed related to CMS's waivers of proposed rulemaking and delay in
effective date as well as other aspects of the MFN Model and the
[[Page 43620]]
November 2020 interim final rule: Association of Community Cancer
Centers v. Azar, No. 8:20-cv-03531 (D. Md.); California Life Sciences
Ass'n v. CMS, No. 3:20-cv-08603 (N.D. Ca); Regeneron Pharmaceuticals v.
HHS, No. 7:20-cv-10488 (S.D.N.Y.); and Community Oncology Alliance,
Inc. v. HHS, No.1:20-cv-03604 (D.D.C.). On December 28, 2020, the U.S.
District Court for the Northern District of California issued a
nationwide preliminary injunction in California Life Sciences, which
preliminarily enjoined HHS from implementing the MFN Model and the
November 2020 interim final rule. The lawsuits in the U.S. District
Court for the District of Maryland and the U.S. District Court for the
District of Columbia were stayed based on the nationwide preliminary
injunction. On December 30, 2020, the U.S. District Court for the
Southern District of New York issued a preliminary injunction in
Regeneron Pharmaceuticals v. HHS, which preliminarily enjoined HHS from
applying the November 2020 interim final rule to Regeneron's drug
EYLEA[supreg] (aflibercept).
On January 8, 2021, the Solicitor General determined not to appeal
the preliminary injunction issued in California Life Sciences. On
January 19, 2021, at the parties' request, the U.S. Northern District
of California stayed the case until at least April 23, 2021.
Subsequently, on April 26, 2021, another stay was granted until July
26, 2021. On July 29, 2021, another stay was granted until September
27, 2021.
In Regeneron Pharmaceuticals, on February 2, 2021, the plaintiff
filed a letter seeking leave to file a motion for summary judgment, and
HHS filed a letter seeking leave to file a motion for a stay. On
February 10, 2021, the U.S. District Court for the Southern District of
New York granted HHS's request and stayed the case for 90 days (that
is, through May 11, 2021). On May 10, 2021, the stay in this case was
extended for an additional 90 days, until August 9, 2021, to give HHS
time to consider how to proceed with the rule in light of the
``unanimous'' court decisions to date. In its order, the court noted
that HHS should ``not assume that another stay will be granted,'' as
the stays gave HHS ``a half-year to reach a conclusion regarding how to
proceed[.]''
As a result of the nationwide preliminary injunction, the MFN Model
was not implemented on January 1, 2021, as contemplated in the November
2020 interim final rule. While the nationwide preliminary injunction
has been in place, CMS considered how to proceed given stakeholders'
concerns about potential impacts of the MFN Model.
II. Provisions of the Proposed Regulations
We received approximately 1,166 timely pieces of correspondence in
response to the November 2020 interim final rule. We appreciate the
comments that we received. We note that many commenters agreed with HHS
about the urgency of addressing high prescription drug prices, but
nearly all of the commenters expressed concern about beginning the
model on January 1, 2021, including starting the model during the
COVID-19 pandemic. Given that the nationwide preliminary injunction
precluded implementation of the MFN Model on January 1, 2021, as
contemplated, that multiple courts found procedural issues with the
November 2020 interim final rule, and that stakeholders expressed
concern about the model start date,\10\ we are proposing to rescind
regulations added by the November 2020 interim final rule and remove
the associated regulatory text at 42 CFR part 513. We believe this
proposed rule communicates how we wish to proceed with the November
2020 interim final rule to the courts and the public. Since the
preliminary injunctions prevented the November 2020 interim final rule
from taking effect, we do not believe there would be any disruption to
reliance interests or Medicare program administration if this proposed
rule were to take effect. If finalized, our proposal would allow us to
take time to further consider the issues identified by commenters and
would address the November 2020 interim final rule's procedural
deficiencies by rescinding it. We note that this proposed rule (that
is, our proposal to effectively withdraw an interim final rule with
comment period) is limited to the codification of the November 2020
interim final rule, and does not reflect any judgment by HHS regarding
future policy.
---------------------------------------------------------------------------
\10\ For example, commenters stated that the MFN Model should
not start during the COVID-19 pandemic, and in addition that the
model should not begin on January 1, 2021, while the public comment
period for the November 2020 interim final rule was ongoing (until
January 26, 2021). Further, commenters stated that CMS failed to
allow MFN participants sufficient time to prepare for model start
and to develop and deploy new systems with distributors and
customers to exclude model sales from ASP reporting.
---------------------------------------------------------------------------
On July 9, 2021, President Biden signed an Executive Order on
Promoting Competition in the American Economy that, in part, directs
the Secretary of HHS to take steps to lower the prices of and improve
access to prescription drugs and biologicals. HHS is exploring
opportunities to promote value-based care for our beneficiaries; to
address the high cost of Medicare Part B drugs, manufacturers' pricing,
and the resulting growth in Medicare Part B drug spending; and to
modernize the Medicare program to improve the quality and cost of care
for beneficiaries. We will continue to carefully consider the comments
we received on the November 2020 interim final rule as we explore all
options to incorporate value into payments for Medicare Part B drugs
and improve beneficiaries' access to evidence-based care.
We invite comments on our proposal to rescind and remove the
regulations at 42 CFR part 513, which also would withdraw the MFN
Model.
III. Collection of Information Requirements
As stated in section 1115A(d)(3) of the Act, Chapter 35 of title
44, United States Code, shall not apply to the testing and evaluation
of CMS Innovation Center Models. However, costs incurred through
information collections were described in sections III.H., III.I.b.,
and VI.C.5. of the November 2020 interim final rule (85 FR 76221,
76222, and 76244, respectively) . If this proposed rule is finalized,
requirements related to the information collection described in the
November 2020 interim final rule would not continue. As such, resulting
savings are included in the estimate of the impact of our proposal to
withdraw the MFN Model in section V.C. of this proposed rule. Further,
this proposed rule does not impose information collection requirements,
that is, reporting, recordkeeping or third-party disclosure
requirements. Consequently, there is no need for review by the Office
of Management and Budget under the authority of the Paperwork Reduction
Act of 1995 (44 U.S.C. 3501 et seq.).
IV. Response to Comments
Because of the large number of public comments we normally receive
on Federal Register documents, we are not able to acknowledge or
respond to them individually. We will consider all comments we receive
by the date and time specified in the DATES section of this preamble,
and, when we proceed with a subsequent document, we will respond to the
comments in the preamble to that document.
V. Regulatory Impact Analysis
A. Statement of Need
The purpose of this proposed rule is to propose the rescission of
the Most Favored Nation Model, codified by an interim final rule with
comment period
[[Page 43621]]
that appeared in the November 27, 2020 Federal Register, and remove the
associated regulatory text at 42 CFR part 513, which also would
withdraw the MFN Model.
B. Overall Impact
We have examined the impact of this rule as required by Executive
Order 12866 on Regulatory Planning and Review (September 30, 1993),
Executive Order 13563 on Improving Regulation and Regulatory Review
(January 18, 2011), the Regulatory Flexibility Act (RFA) (September 19,
1980, Pub. L. 96-354), section 1102(b) of the Act, section 202 of the
Unfunded Mandates Reform Act of 1995 (March 22, 1995; Pub. L. 104-4),
Executive Order 13132 on Federalism (August 4, 1999), and the
Congressional Review Act (5 U.S.C. 804(2)).
Executive Orders 12866 and 13563 direct agencies to assess all
costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits (including potential economic, environmental, public
health and safety effects, distributive impacts, and equity). Section
3(f) of Executive Order 12866 defines a ``significant regulatory
action'' as an action that is likely to result in a rule: (1) Having an
annual effect on the economy of $100 million or more in any one year,
or adversely and materially affecting a sector of the economy,
productivity, competition, jobs, the environment, public health or
safety, or state, local or tribal governments or communities (also
referred to as ``economically significant''); (2) creating a serious
inconsistency or otherwise interfering with an action taken or planned
by another agency; (3) materially altering the budgetary impacts of
entitlement grants, user fees, or loan programs or the rights and
obligations of recipients thereof; or (4) raising novel legal or policy
issues arising out of legal mandates, the President's priorities, or
the principles set forth in the Executive Order.
A regulatory impact analysis (RIA) must be prepared for major rules
with significant regulatory actions or with economically significant
effects ($100 million or more in any 1 year). Based on our estimates,
OMB's Office of Information and Regulatory Affairs has determined this
rulemaking is ``economically significant'' as measured by the $100
million threshold. Accordingly, we have prepared an RIA that to the
best of our ability presents the costs and benefits of the rulemaking.
C. Detailed Economic Analysis
Removing the regulatory text at 42 CFR part 513, which also would
withdraw the MFN Model, would mean that the annualized/monetarized
estimates of costs and transfers presented in the November 2020 interim
final rule (85 FR 76235 through 76248) would not be realized. The
regulatory impact analysis of the November 2020 interim final rule
estimated that the MFN Model would result in substantial overall
savings for the Medicare program, the Medicaid program, and
beneficiaries, and that model participants would experience costs
associated with complying with the regulations, survey completion, and
potential requests for financial hardship exemption.
In the November 2020 interim final rule, we presented estimates
from the CMS Office of the Actuary (OACT) (85 FR 76236) and the HHS
Office of the Assistant Secretary for Planning and Evaluation (ASPE)
(85 FR 76240). We noted that there is much uncertainty around the
assumptions for both the OACT and ASPE estimates, and refer readers to
section VI.C. of the November 2020 interim final rule for a more
complete discussion of the estimated impacts of the MFN Model. These
potential impacts were estimated to occur beginning January 2021
through December 2028, in alignment with a January 1, 2021 model start.
However, because the MFN Model was not implemented on January 1, 2021,
as contemplated in the November 2020 interim final rule, such effects
have not occurred.
Nevertheless and notwithstanding the nationwide preliminary
injunction, this analysis uses a baseline in which the November 2020
interim final rule was implemented on January 1, 2021, to calculate the
monetized estimates of the effects of this proposed rule. We maintain
the analytical approach described in the regulatory impact analysis of
the November 2020 interim final rule, and for the purpose of
quantifying the effects of this proposed rule, assume that the
regulations added by the November 2020 interim final rule will be in
full effect if this proposed rule is not finalized. As a result of the
rescission of the regulations added by the November 2020 interim final
rule, this proposed rule would, if finalized, prevent the occurrence of
the estimated costs and transfers presented in the November 2020
interim final rule. We summarize this result in Tables 1 and 2, which
illustrate, inversely, the monetized estimates contained in Table 17
(85 FR 76247) and Table 18 (85 FR 76248) of the November 2020 interim
final rule. The period covered shown in Tables 1 and 2 begins January
2021 in alignment with the accounting statements and tables presented
in the November 2020 interim final rule. This approach illustrates that
this proposed rule, if finalized, would prevent the realization of the
annualized/monetarized estimates of costs and transfers that were
presented in the November 2020 interim final rule. Because the MFN
Model was not implemented, readers should understand that this proposed
rule does not affect conditions in the past.
Table 1--Accounting Statement: Estimated Impacts From CY 2021 to CY 2028 as a Result of Provisions of This
Proposed Rule Based on the OACT Estimate
----------------------------------------------------------------------------------------------------------------
Units
---------------------------------------------------------
Category Estimates Discount rate
Year dollar (%) Period covered
----------------------------------------------------------------------------------------------------------------
Costs:
Annualized Monetized ($million/ -29.4 2018 7 January 2021--December
year). 2028.
-27.1 2018 3 January 2021--December
2028.
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To Whom............................... Hospital/physicians.
-------------------------------------------------------------------------
Annualized Monetized ($million/ -0.4 2018 7 January 2021--December
year). 2027.
-0.4 2018 3 January 2021--December
2027.
-------------------------------------------------------------------------
Transfers:
[[Page 43622]]
Annualized Monetized ($million/ 11,502.5 2018 7 January 2021--December
year). 2027.
11,906.3 2018 3 January 2021--December
2027.
-------------------------------------------------------------------------
From Whom to Whom..................... Federal Government to hospitals/physicians and MA plans.
-------------------------------------------------------------------------
Annualized Monetized ($million/ 4,087.2 2018 7 January 2021--December
year). 2027.
4,228.3 2018 3 January 2021--December
2027.
-------------------------------------------------------------------------
From Whom to Whom..................... Beneficiaries to hospitals/physicians and MA plans.
-------------------------------------------------------------------------
Annualized Monetized ($million/ 577.5 2018 7 January 2021--December
year). 2027.
596.5 2018 3 January 2021--December
2027.
-------------------------------------------------------------------------
From Whom to Whom..................... States to hospitals/physicians and MA plans.
----------------------------------------------------------------------------------------------------------------
Table 2--Accounting Statement: Estimated Impacts From CY 2021 to CY 2028 as a Result of the Provisions of This
Proposed Rule Based on the ASPE Estimate
----------------------------------------------------------------------------------------------------------------
Units
---------------------------------------------------------
Category Estimates Discount rate
Year dollar (%) Period covered
----------------------------------------------------------------------------------------------------------------
Costs:
Annualized Monetized ($million/ -29.4 2018 7 January 2021--December
year). 2028.
-27.1 2018 3 January 2021--December
2028.
-------------------------------------------------------------------------
To Whom............................... Hospital/physicians
-------------------------------------------------------------------------
Annualized Monetized ($million/ -0.4 2018 7 January 2021--December
year). 2027.
-0.4 2018 3 January 2021--December
2027.
-------------------------------------------------------------------------
Transfers:
Annualized Monetized ($million/ 7,058.3 2018 7 January 2021--December
year). 2027.
7,276.5 2018 3 January 2021--December
2027.
-------------------------------------------------------------------------
From Whom to Whom..................... Federal Government to hospitals/physicians and MA plans
-------------------------------------------------------------------------
Annualized Monetized ($million/ 4,504.9 2018 7 January 2021--December
year). 2027.
4,638.6 2018 3 January 2021--December
2027.
-------------------------------------------------------------------------
From Whom to Whom..................... Beneficiaries to hospitals/physicians and MA plans
-------------------------------------------------------------------------
Annualized Monetized ($million/ 342.4 2018 7 January 2021--December
year). 2027.
351.6 2018 3 January 2021--December
2027.
-------------------------------------------------------------------------
From Whom to Whom..................... States to hospitals/physicians and MA plans
----------------------------------------------------------------------------------------------------------------
D. Regulatory Flexibility Act (RFA)
The RFA requires agencies to analyze options for regulatory relief
of small entities. For purposes of the RFA, small entities include
small businesses, nonprofit organizations, and small governmental
jurisdictions. Most hospitals and most other providers and suppliers
are small entities, either by nonprofit status or by having revenues of
less than $8 million to $41.5 million in any 1 year. Individuals and
states are not included in the definition of a small entity. For
details, see the Small Business Administration's ``Table of Small
Business Size Standards'' at https://www.sba.gov/document/support--table-size-standards. The rule of thumb used by HHS for determining
whether an impact is ``significant'' is an adverse effect equal to 3
percent or more of total annual revenues.
This proposed rule, if finalized, would impact the vast majority of
Medicare-participating providers and suppliers that submit claims for
separately payable Medicare Part B drugs by preventing the impacts
described in the November 2020 interim final rule (85 FR 76246) from
being realized. There are over 20,000 small entities that would be
included or affected by the MFN Model if the model was implemented. We
refer readers to Table 3 and Table 8 in the November 2020 interim final
rule (85 FR 76195 and 76219, respectively) to see the number of
entities, as well as the types of providers and suppliers, that would
be most likely impacted by the MFN Model. This proposed rule proposes
to withdraw the MFN Model, and therefore would likely impact these same
entities. Accordingly, we have determined that a Regulatory Flexibility
Analysis (RFA) is required. As its measure of significant economic
impact on a substantial number of small entities, HHS uses a
[[Page 43623]]
change in revenue of more than 3 to 5 percent. We do believe that this
threshold will be reached by the requirements in this proposed rule.
Therefore, the Secretary has certified that this proposed will have a
significant economic impact on a substantial number of small entities.
The RFA presented in the November 2020 interim final rule (85 FR 76245)
describes the potential impact of the MFN Model, if it was implemented,
on small entities. If finalized, this proposed rule would prevent those
impacts from being realized. Specifically, the lower drug payments and
alternative add-on payments described in section III.F. of the November
2020 interim final rule would not occur. Instead, payment for submitted
claims would be made under the applicable Medicare payment methodology.
This RFA, together with the preamble, constitutes the required
analysis.
In addition, section 1102(b) of the Act requires us to prepare an
RIA if a rule may have a significant impact on the operations of a
substantial number of small rural hospitals. This analysis must conform
to the provisions of section 603 of the RFA. For purposes of section
1102(b) of the Act, we define a small rural hospital as a hospital that
is located outside of a Metropolitan Statistical Area for Medicare
payment regulations and has fewer than 100 beds. Similar to urban
entities, we estimate that this proposed rule, if finalized, would have
a significant impact on small rural hospitals by preventing the impacts
described in the November 2020 interim final rule (85 FR 76246) from
being realized. Specifically, if the MFN Model was implemented, these
rural entities would experience drug payment reductions and overall
payment reductions similar to urban entities. Instead, if this proposed
rule is finalized, payment for submitted claims would be made under the
applicable Medicare payment methodology.
We welcome comments on our estimate of significantly affected
providers and suppliers and the magnitude of estimated effects for this
proposed rule.
E. Unfunded Mandates Reform Act (UMRA)
Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA) also
requires that agencies assess anticipated costs and benefits before
issuing any rule whose mandates require spending in any 1 year of $100
million in 1995 dollars, updated annually for inflation. In 2021, that
threshold is approximately $158 million. As discussed in section V.C.
of this proposed rule, the financial impacts for States (that is, an
estimated overall reduction in State spending) presented in the
November 2020 interim final rule (85 FR 76235 through 76248) would not
be realized. This proposed rule does not mandate any spending by State,
local, or tribal governments, or by the private sector, and hence an
UMRA analysis is not required.
F. Federalism
Executive Order 13132 establishes certain requirements that an
agency must meet when it promulgates a proposed rule (and subsequent
final rule) that imposes substantial direct requirement costs on State
and local governments, preempts State law, or otherwise has Federalism
implications. As discussed in section V.C. of this proposed rule, the
financial impacts for States (that is, an estimated overall reduction
in State spending) presented in the November 2020 interim final rule
(85 FR 76235 through 76248) would not be realized. Since this
regulation does not impose any costs on State or local governments,
preempt State law, or otherwise have Federalism implications, the
requirements of Executive Order 13132 are not applicable.
In accordance with the provisions of Executive Order 12866, this
proposed rule was reviewed by the Office of Management and Budget.
Chiquita Brooks-LaSure, Administrator of the Centers for Medicare &
Medicaid Services, approved this document on July 21, 2021.
List of Subjects for 42 CFR 513
Administrative practice and procedure, Health facilities, Medicare,
Reporting and recordkeeping requirements.
PART 513--[REMOVED]
0
For the reasons set forth in the preamble and under the authority at 5
U.S.C. 301, the Centers for Medicare & Medicaid Services proposes to
remove 42 CFR part 513.
Dated: August 3, 2021.
Xavier Becerra,
Secretary, Department of Health and Human Services.
[FR Doc. 2021-16886 Filed 8-6-21; 4:15 pm]
BILLING CODE 4120-01-P
