Most Favored Nation (MFN) Model, 73986-73990 [2021-28225]
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Federal Register / Vol. 86, No. 247 / Wednesday, December 29, 2021 / Rules and Regulations
physical sheets of paper (as set forth in
§ 1.821(c)(3)).
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Andrew Hirshfeld,
Commissioner for Patents, Performing the
Functions and Duties of the Under Secretary
of Commerce for Intellectual Property and
Director of the United States Patent and
Trademark Office.
[FR Doc. 2021–28128 Filed 12–28–21; 8:45 am]
BILLING CODE 3510–16–P
DEPARTMENT OF HEALTH AND
HUMAN SERVICES
Centers for Medicare & Medicaid
Services
42 CFR Part 513
[CMS–5528–F]
RIN 0938–AT91
Most Favored Nation (MFN) Model
Centers for Medicare &
Medicaid Services (CMS), HHS.
ACTION: Final rule.
AGENCY:
This final rule rescinds the
Most Favored Nation Model interim
final rule with comment period that
appeared in the November 27, 2020,
Federal Register.
DATES: This final rule is effective
February 28, 2022.
FOR FURTHER INFORMATION CONTACT: Lara
Strawbridge, (410) 786–7400 or MFN@
cms.hhs.gov.
SUMMARY:
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I. Background
In the August 10, 2021 Federal
Register (86 FR 43620), we published a
proposed rule (86 FR 43618, hereafter,
referred to as ‘‘the August 2021
proposed rule’’) that would rescind the
Most Favored Nation (MFN) Model
interim final rule with comment period
(85 FR 76180) that appeared in the
November 27, 2020 Federal Register
(hereafter, referred to as ‘‘the November
2020 MFN Model interim final rule’’).
The November 2020 MFN Model
interim final rule established a 7-year
nationwide, mandatory MFN Model to
test an alternative way for Medicare to
pay for certain Medicare Part B single
source drugs and biologicals (including
biosimilar biologicals), under section
1115A of the Social Security Act (the
Act), with the model performance
period beginning on January 1, 2021.
The MFN Model was not implemented
on January 1, 2021 as contemplated
following four lawsuits and a
nationwide preliminary injunction. On
December 28, 2020, the U.S. District
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Court for the Northern District of
California issued a nationwide
preliminary injunction in California Life
Sciences Ass’n v. CMS, No. 3:20–cv–
08603, which preliminarily enjoined
HHS from implementing the MFN
Model and the November 2020 interim
final rule. For additional information on
the MFN Model and the related
lawsuits, see the August 2021 proposed
rule, the November 2020 MFN Model
interim final rule, and the MFN Model
website.1
II. Provisions of the Proposed
Regulations and Analysis of and
Responses to Public Comments
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,2 in
the August 2021 proposed rule (86 FR
43620), we proposed to rescind the
November 2020 MFN Model interim
final rule and remove the regulations at
42 CFR part 513 (these actions would
withdraw the MFN Model), and invited
comments on our proposal. We received
34 timely items of correspondence from
health care providers (such as health
systems, hospitals, physician practices,
and infusion centers), physician
specialty groups, drug manufacturers,
pharmaceutical industry groups,
pharmacy benefit managers, patient
advocacy groups, and individuals.
The following is a summary of the
public comments received as well as our
responses.
Comment: In general, the comments
on the August 2021 proposed rule
closely aligned with the comments we
received in response to the November
2020 MFN Model interim final rule.
Several commenters expressed general
support for lowering drug prices.
However, all but one of the commenters
supported our proposal to rescind the
November 2020 MFN Model interim
final rule and remove the associated
regulatory text at 42 CFR part 513. A
1 See the MFN Model website at https://
innovation.cms.gov/innovation-models/mostfavored-nation-model.
2 For example, in response to the November 2020
interim final rule, 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 average sales price (ASP)
reporting.
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commenter supported advancing the
MFN Model, stating that the model ‘‘is
a guarantee to every American that we
are not overpaying for the life sustaining
medications they need. . . . [G]ive
Americans the same drugs for the same
price as the rest of the world.’’ Several
commenters urged us not to implement
the MFN Model or similar models, such
as any model that would test
international or domestic reference
pricing now or in the future. Many
commenters expressed concerns about
the potential for beneficiaries to lose
access to drugs included in the MFN
Model if manufacturers did not lower
prices to align with the model payment
amount, the potential for an MFN Model
start to exacerbate practice struggles
during the COVID–19 pandemic, and
the potential financial hardship and
administrative burden that hospitals,
physician practices, and 340B covered
entities may experience related to the
MFN Model. Some commenters
described legal concerns that were
raised in the model-related lawsuits.
Response: We appreciate commenters’
support for our proposal to rescind the
November 2020 MFN Model interim
final rule and remove the associated
regulatory text at 42 CFR part 513 (these
actions would withdraw the MFN
Model). We appreciate the commenter’s
concern that Americans are paying more
for drugs than consumers in other
countries pay, although we disagree
with the commenter that the MFN
Model would guarantee that Americans
would pay the exact amount that others
pay for drugs, as the MFN Model was
designed as a 7-year model test that
would phase in the MFN Price over
time, and further, there is no one
international price that others outside
the United States pay. We will continue
to carefully consider this commenter’s
feedback and other stakeholders’
feedback that we received as we explore
all options to incorporate value into
payments for Medicare Part B drugs,
improve beneficiaries’ access to
evidence-based care, and reduce drug
spending for consumers and throughout
the health care system. As stated in the
Department of Health and Human
Services’ (HHS’) Comprehensive Plan
for Addressing High Drug Prices: A
Report in Response to the Executive
Order on Competition in the American
Economy (September 9, 2021), there are
many administrative tools that could be
used to promote competition and reduce
drug pricing, including testing models
in Medicare Part B using value-based
payments, in which payment for drugs
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is directly linked to the clinical value
they provide patients.3
Comment: Some commenters offered
views on potential policies and
alternative payment models that HHS
and CMS could consider.
Response: We thank stakeholders for
their comments. These topics are
outside the scope of this rule, but we
may consider the comments in the
future.
Final Decision: After considering the
comments on our proposal, we are
finalizing our proposal as proposed. In
this final rule, we rescind the November
2020 MFN Model interim final rule and
remove the associated regulatory text at
42 CFR part 513. Thus, as a result of this
final rule, the MFN Model is
withdrawn, effective on the date
specified in the DATES section of this
final rule.
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 MFN
Model interim final rule (85 FR 76221,
76222, and 76244, respectively). We are
finalizing the provisions of the August
2021 proposed rule, which proposed to
rescind requirements related to the
information collection described in the
November 2020 MFN Model interim
final rule. As such, the estimate of the
impact of this final rule in section IV.C.
of this final rule includes the savings
from rescinding the information
collection requirements in the
November 2020 MFN Model interim
final rule. Further, the August 2021
proposed rule and this final rule do 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.).
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3 https://aspe.hhs.gov/sites/default/files/2021-09/
Drug_Pricing_Plan_9-9-2021.pdf.
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We did not receive comments on the
discussion of information collection in
the proposed rule.
IV. Regulatory Impact Analysis
A. Statement of Need
The purpose of this final rule is to
finalize the rescission of the Most
Favored Nation Model interim final rule
with comment period that appeared in
the November 27, 2020 Federal
Register, and remove the associated
regulatory text at 42 CFR part 513 (these
actions will 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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73987
policy issues arising out of legal
mandates, the President’s priorities, or
the principles set forth in the Executive
Order.
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, and
hence also a major rule under Subtitle
E of the Small Business Regulatory
Enforcement Fairness Act of 1996 (also
known as the Congressional Review
Act). Accordingly, we have prepared a
regulatory impact analysis 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 withdraws the
MFN Model, prevents realization of the
annualized/monetized estimates of costs
and transfers presented in the November
2020 MFN Model interim final rule (85
FR 76235 through 76248). The RIA of
the November 2020 MFN Model 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 a
financial hardship exemption.
In the November 2020 MFN Model
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 MFN Model 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
MFN Model interim final rule, such
effects have not occurred.
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Nevertheless and notwithstanding the
nationwide preliminary injunction, this
analysis uses a baseline in which the
November 2020 MFN Model interim
final rule was implemented on January
1, 2021, to calculate the monetized
estimates of the effects of this final rule.
We maintain the analytical approach
described in the RIA of the November
2020 MFN Model interim final rule and
August 2021 proposed rule, and for the
purpose of quantifying the effects of this
final rule, assume that the regulations
added by the November 2020 MFN
Model interim final rule would remain
covered shown in Tables 1 and 2 begins
January 2021 in alignment with the
accounting statements and tables
presented in the November 2020 MFN
Model interim final rule and in the
August 2021 proposed rule. This
approach illustrates that this final rule
prevents the realization of the
annualized/monetized estimates of costs
and transfers that were presented in the
November 2020 MFN Model interim
final rule. Because the MFN Model was
not implemented, readers should
understand that this final rule does not
affect conditions in the past.
in full effect if this final rule was not
finalized. By rescinding the regulations
added by the November 2020 MFN
Model interim final rule, this final rule
prevents the occurrence of the estimated
costs and transfers presented in the
November 2020 MFN Model interim
final rule. As presented in the August
2021 proposed rule (86 FR 43621), 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 MFN
Model interim final rule. The period
TABLE 1—ACCOUNTING STATEMENT: ESTIMATED IMPACTS FROM CY 2021 TO CY 2028 AS A RESULT OF PROVISIONS OF
THIS FINAL RULE BASED ON THE OACT ESTIMATE
Units
Category
Estimates
Year dollar
Costs:
Annualized Monetized ($million/year) ......
To Whom ........................................................
¥29.4
¥27.1
Transfers:
Annualized Monetized ($million/year) ......
7
3
January 2021–December 2028.
January 2021–December 2028.
¥0.4
¥0.4
2018
2018
7
3
January 2021–December 2027.
January 2021–December 2027.
11,502.5
11,906.3
2018
2018
7
3
January 2021–December 2027.
January 2021–December 2027.
4,087.2
4,228.3
2018
2018
7
3
January 2021–December 2027.
January 2021–December 2027.
Beneficiaries to hospitals/physicians and MA plans.
Annualized Monetized ($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
(%)
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 FINAL RULE BASED ON THE ASPE ESTIMATE
Units
Category
Estimates
Year dollar
Costs:
Annualized Monetized ($million/year) ......
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To Whom ........................................................
¥29.4
¥27.1
Transfers:
Annualized Monetized ($million/year) ......
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Period covered
2018
2018
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.
Hospital/physicians.
Annualized Monetized ($million/year) ......
From Whom to Whom ....................................
Discount
rate
(%)
Federal Government to hospitals/physicians and MA plans.
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73989
TABLE 2—ACCOUNTING STATEMENT: ESTIMATED IMPACTS FROM CY 2021 TO CY 2028 AS A RESULT OF THE PROVISIONS
OF THIS FINAL RULE BASED ON THE ASPE ESTIMATE—Continued
Units
Category
Estimates
Year dollar
Annualized Monetized ($million/year) ......
From Whom to Whom ....................................
4,504.9
4,638.6
Comment: A few commenters stated
that, based on their own or others’
analyses, the OACT and ASPE estimates
shown in the November 2020 MFN
Model interim final rule underestimate
the negative financial impact that
certain healthcare providers would
likely experience had the MFN Model
been implemented. Many commenters
expressed concern that some of the
estimated savings would be related to
reduced access to care. We did not
receive comments on our approach to
illustrate, inversely, the monetized
estimates contained in Table 17 (85 FR
76247) and Table 18 (85 FR 76248) of
the November 2020 MFN Model interim
final rule in Table 1 and Table 2 of the
August 2021 proposed rule,
respectively.
Response: We thank stakeholders for
their comments. As we noted in the
November 2020 MFN Model interim
final rule and the August 2021 proposed
rule, there is much uncertainty around
the assumptions for both the OACT and
ASPE estimates that were presented in
those rules.
Final Decision: After considering the
comments on the RIA of our proposal,
and because we are finalizing our
proposal as proposed, we are finalizing
the RIA without change; that is, as
presented in the August 2021 proposed
rule.
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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 $41.5 million
in any 1 year. Individuals and States are
not included in the definition of a small
entity. For details, see the Small
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2018
2018
Period covered
7
3
January 2021–December 2027.
January 2021–December 2027.
Beneficiaries to hospitals/physicians and MA plans.
Annualized Monetized ($million/year) ......
From Whom to Whom ....................................
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.
Business Administration’s ‘‘Table of
Small Business Size Standards’’ at
https://www.sba.gov/document/supporttable-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 final rule affects 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 MFN
Model interim final rule (85 FR 76246)
from being realized. Over 20,000 small
entities would have been included or
affected by the MFN Model if the model
had been implemented. We refer readers
to Table 3 and Table 8 in the November
2020 MFN Model 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
most likely would have been impacted
by the MFN Model had it been
implemented. This final rule withdraws
the MFN Model, and therefore likely
impacts these same entities.
Accordingly, we have determined that a
Regulatory Flexibility Analysis is
required. As its measure of significant
economic impact on a substantial
number of small entities, HHS uses a
change in revenue of more than 3 to 5
percent. We believe that this threshold
will be reached by the requirements in
this final rule. Therefore, the Secretary
has certified that the August 2021
proposed rule and this final rule will
have a significant economic impact on
a substantial number of small entities.
The Regulatory Flexibility Analysis
presented in the November 2020 MFN
Model interim final rule (85 FR 76245)
describes the potential impact of the
MFN Model, if it had been
implemented, on small entities. This
final rule prevents those impacts from
being realized. Specifically, the lower
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drug payments and alternative add-on
payments described in section III.F. of
the November 2020 MFN Model interim
final rule will not occur. Instead,
payment for submitted claims will be
made under the applicable Medicare
payment methodology. This Regulatory
Flexibility Analysis, 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 604
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. We estimate that this final rule
will have a significant impact on small
rural hospitals by preventing the
impacts described in the November
2020 MFN Model interim final rule (85
FR 76246) from being realized.
Specifically, these rural entities will not
experience drug payment reductions
and overall payment reductions.
Instead, payment for submitted claims
will be made under the applicable
Medicare payment methodology. We
estimate that this final rule will have a
parallel significant impact on urban
entities.
We welcomed comments on our
estimate of significantly affected
providers and suppliers and the
magnitude of estimated effects for the
proposed rule.
Comment: Several commenters stated
that our estimate of significantly
affected providers and suppliers and the
magnitude of estimated effects
presented in the November 2020 MFN
Model interim final rule underestimated
the potential financial losses and
operational impacts that health care
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providers, such as hospitals, physicians
and infusion centers, would have
experienced had the MFN Model been
implemented as contemplated.
Response: We thank stakeholders for
their comments. As we noted in the
November 2020 MFN Model interim
final rule and the August 2021 proposed
rule, there is much uncertainty around
the assumptions for both the OACT and
ASPE estimates that were presented in
those rules.
Final Decision: After considering the
comments on the estimate of
significantly affected providers and
suppliers and the magnitude of
estimated effects of our proposal, and
because we are finalizing our proposal
as proposed, we maintain our analysis,
as presented in the August 2021
proposed rule, for this final rule.
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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
the August 2021 proposed rule and
section IV.C. of this final rule, the
financial impacts for States (that is, an
estimated overall reduction in State
spending) presented in the November
2020 MFN Model interim final rule (85
FR 76235 through 76248) will not be
realized. The August 2021 proposed
rule and this final rule did 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 the
August 2021 proposed rule and section
IV.C. of this final rule, the financial
impacts for States (that is, an estimated
overall reduction in State spending)
presented in the November 2020 MFN
Model interim final rule (85 FR 76235
through 76248) will not be realized.
Since this rule does not impose any
costs on State or local governments,
preempt State law, or otherwise have
Federalism implications, the
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requirements of Executive Order 13132
are not applicable.
In accordance with the provisions of
Executive Order 12866, this final 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 December
14, 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 removes 42 CFR part
513.
■
Dated: December 21, 2021.
Xavier Becerra,
Secretary, Department of Health and Human
Services.
[FR Doc. 2021–28225 Filed 12–27–21; 4:15 pm]
BILLING CODE 4120–01–P
DEPARTMENT OF COMMERCE
National Oceanic and Atmospheric
Administration
50 CFR Part 665
[Docket No. 211221–0265]
RTID 0648–XP016
Pacific Island Pelagic Fisheries; 2022
U.S. Territorial Longline Bigeye Tuna
Catch Limits
National Marine Fisheries
Service (NMFS), National Oceanic and
Atmospheric Administration (NOAA),
Commerce.
ACTION: Final specifications.
AGENCY:
NMFS specifies a 2022 limit
of 2,000 metric tons (t) of longlinecaught bigeye tuna for each U.S. Pacific
territory (American Samoa, Guam, and
the Commonwealth of the Northern
Mariana Islands (CNMI), the territories).
NMFS will allow each territory to
allocate up to 1,500 t in 2022 to U.S.
longline fishing vessels through
specified fishing agreements that meet
established criteria. The overall
allocation limit among all territories,
however, may not exceed 3,000 t. As an
accountability measure, NMFS will
monitor, attribute, and restrict (if
necessary) catches of longline-caught
SUMMARY:
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bigeye tuna, including catches made
under a specified fishing agreement.
These catch limits and accountability
measures support the long-term
sustainability of fishery resources of the
U.S. Pacific Islands.
DATES: The final specifications are
effective January 28, 2022, through
December 31, 2022. The deadline to
submit a specified fishing agreement
pursuant to 50 CFR 665.819(b)(3) for
review is June 27, 2022.
ADDRESSES: Copies of the Fishery
Ecosystem Plan for Pelagic Fisheries of
the Western Pacific (FEP) are available
from the Western Pacific Fishery
Management Council (Council), 1164
Bishop St., Suite 1400, Honolulu, HI
96813, tel 808–522–8220, or
www.wpcouncil.org.
Pursuant to the National
Environmental Policy Act, the Council
and NMFS prepared environmental
analyses that support this action and are
available at https://
www.regulations.gov/docket/NOAANMFS-2021-0076.
FOR FURTHER INFORMATION CONTACT:
Lynn Rassel, NMFS PIRO Sustainable
Fisheries, 808–725–5184.
SUPPLEMENTARY INFORMATION: NMFS is
specifying a 2022 catch limit of 2,000 t
of longline-caught bigeye tuna for each
U.S. Pacific territory. NMFS is also
authorizing each territory to allocate up
to 1,500 t of its 2,000 t bigeye tuna limit,
not to exceed a 3,000 t total annual
allocation limit among all the territories,
to U.S. longline fishing vessels
permitted to fish under the FEP. A
specified fishing agreement with the
applicable territory must identify those
vessels.
NMFS will monitor catches of
longline-caught bigeye tuna by the
longline fisheries of each U.S Pacific
territory, including catches made by
U.S. longline vessels operating under
specified fishing agreements. The
criteria that a specified fishing
agreement must meet, and the process
for attributing longline-caught bigeye
tuna, will follow the procedures in 50
CFR 665.819. When NMFS projects that
the fishery will reach a territorial catch
or allocation limit, NMFS will, as an
accountability measure, prohibit the
catch and retention of longline-caught
bigeye tuna by vessels in the applicable
territory (if the territorial catch limit is
projected to be reached), and/or vessels
in a specified fishing agreement (if the
allocation limit is projected to be
reached).
You may find additional background
information on this action in the
preamble to the proposed specifications
published on October 27, 2021 (86 FR
E:\FR\FM\29DER1.SGM
29DER1
]]>Agencies
[Federal Register Volume 86, Number 247 (Wednesday, December 29, 2021)]
[Rules and Regulations]
[Pages 73986-73990]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-28225]
=======================================================================
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
42 CFR Part 513
[CMS-5528-F]
RIN 0938-AT91
Most Favored Nation (MFN) Model
AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.
ACTION: Final rule.
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SUMMARY: This final rule rescinds the Most Favored Nation Model interim
final rule with comment period that appeared in the November 27, 2020,
Federal Register.
DATES: This final rule is effective February 28, 2022.
FOR FURTHER INFORMATION CONTACT: Lara Strawbridge, (410) 786-7400 or
[email protected].
I. Background
In the August 10, 2021 Federal Register (86 FR 43620), we published
a proposed rule (86 FR 43618, hereafter, referred to as ``the August
2021 proposed rule'') that would rescind the Most Favored Nation (MFN)
Model interim final rule with comment period (85 FR 76180) that
appeared in the November 27, 2020 Federal Register (hereafter, referred
to as ``the November 2020 MFN Model interim final rule''). The November
2020 MFN Model interim final rule established a 7-year nationwide,
mandatory MFN Model to test an alternative way for Medicare to pay for
certain Medicare Part B single source drugs and biologicals (including
biosimilar biologicals), under section 1115A of the Social Security Act
(the Act), with the model performance period beginning on January 1,
2021. The MFN Model was not implemented on January 1, 2021 as
contemplated following four lawsuits and a nationwide preliminary
injunction. On December 28, 2020, the U.S. District Court for the
Northern District of California issued a nationwide preliminary
injunction in California Life Sciences Ass'n v. CMS, No. 3:20-cv-08603,
which preliminarily enjoined HHS from implementing the MFN Model and
the November 2020 interim final rule. For additional information on the
MFN Model and the related lawsuits, see the August 2021 proposed rule,
the November 2020 MFN Model interim final rule, and the MFN Model
website.\1\
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\1\ See the MFN Model website at https://innovation.cms.gov/innovation-models/most-favored-nation-model.
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II. Provisions of the Proposed Regulations and Analysis of and
Responses to Public Comments
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,\2\ in the August 2021 proposed rule (86 FR 43620), we
proposed to rescind the November 2020 MFN Model interim final rule and
remove the regulations at 42 CFR part 513 (these actions would withdraw
the MFN Model), and invited comments on our proposal. We received 34
timely items of correspondence from health care providers (such as
health systems, hospitals, physician practices, and infusion centers),
physician specialty groups, drug manufacturers, pharmaceutical industry
groups, pharmacy benefit managers, patient advocacy groups, and
individuals.
---------------------------------------------------------------------------
\2\ For example, in response to the November 2020 interim final
rule, 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 average sales price (ASP) reporting.
---------------------------------------------------------------------------
The following is a summary of the public comments received as well
as our responses.
Comment: In general, the comments on the August 2021 proposed rule
closely aligned with the comments we received in response to the
November 2020 MFN Model interim final rule. Several commenters
expressed general support for lowering drug prices. However, all but
one of the commenters supported our proposal to rescind the November
2020 MFN Model interim final rule and remove the associated regulatory
text at 42 CFR part 513. A commenter supported advancing the MFN Model,
stating that the model ``is a guarantee to every American that we are
not overpaying for the life sustaining medications they need. . . .
[G]ive Americans the same drugs for the same price as the rest of the
world.'' Several commenters urged us not to implement the MFN Model or
similar models, such as any model that would test international or
domestic reference pricing now or in the future. Many commenters
expressed concerns about the potential for beneficiaries to lose access
to drugs included in the MFN Model if manufacturers did not lower
prices to align with the model payment amount, the potential for an MFN
Model start to exacerbate practice struggles during the COVID-19
pandemic, and the potential financial hardship and administrative
burden that hospitals, physician practices, and 340B covered entities
may experience related to the MFN Model. Some commenters described
legal concerns that were raised in the model-related lawsuits.
Response: We appreciate commenters' support for our proposal to
rescind the November 2020 MFN Model interim final rule and remove the
associated regulatory text at 42 CFR part 513 (these actions would
withdraw the MFN Model). We appreciate the commenter's concern that
Americans are paying more for drugs than consumers in other countries
pay, although we disagree with the commenter that the MFN Model would
guarantee that Americans would pay the exact amount that others pay for
drugs, as the MFN Model was designed as a 7-year model test that would
phase in the MFN Price over time, and further, there is no one
international price that others outside the United States pay. We will
continue to carefully consider this commenter's feedback and other
stakeholders' feedback that we received as we explore all options to
incorporate value into payments for Medicare Part B drugs, improve
beneficiaries' access to evidence-based care, and reduce drug spending
for consumers and throughout the health care system. As stated in the
Department of Health and Human Services' (HHS') Comprehensive Plan for
Addressing High Drug Prices: A Report in Response to the Executive
Order on Competition in the American Economy (September 9, 2021), there
are many administrative tools that could be used to promote competition
and reduce drug pricing, including testing models in Medicare Part B
using value-based payments, in which payment for drugs
[[Page 73987]]
is directly linked to the clinical value they provide patients.\3\
---------------------------------------------------------------------------
\3\ https://aspe.hhs.gov/sites/default/files/2021-09/Drug_Pricing_Plan_9-9-2021.pdf.
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Comment: Some commenters offered views on potential policies and
alternative payment models that HHS and CMS could consider.
Response: We thank stakeholders for their comments. These topics
are outside the scope of this rule, but we may consider the comments in
the future.
Final Decision: After considering the comments on our proposal, we
are finalizing our proposal as proposed. In this final rule, we rescind
the November 2020 MFN Model interim final rule and remove the
associated regulatory text at 42 CFR part 513. Thus, as a result of
this final rule, the MFN Model is withdrawn, effective on the date
specified in the DATES section of this final rule.
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 MFN Model interim final rule (85 FR
76221, 76222, and 76244, respectively). We are finalizing the
provisions of the August 2021 proposed rule, which proposed to rescind
requirements related to the information collection described in the
November 2020 MFN Model interim final rule. As such, the estimate of
the impact of this final rule in section IV.C. of this final rule
includes the savings from rescinding the information collection
requirements in the November 2020 MFN Model interim final rule.
Further, the August 2021 proposed rule and this final rule do 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.).
We did not receive comments on the discussion of information
collection in the proposed rule.
IV. Regulatory Impact Analysis
A. Statement of Need
The purpose of this final rule is to finalize the rescission of the
Most Favored Nation Model interim final rule with comment period that
appeared in the November 27, 2020 Federal Register, and remove the
associated regulatory text at 42 CFR part 513 (these actions will
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.
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, and hence also a major rule
under Subtitle E of the Small Business Regulatory Enforcement Fairness
Act of 1996 (also known as the Congressional Review Act). Accordingly,
we have prepared a regulatory impact analysis 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 withdraws
the MFN Model, prevents realization of the annualized/monetized
estimates of costs and transfers presented in the November 2020 MFN
Model interim final rule (85 FR 76235 through 76248). The RIA of the
November 2020 MFN Model 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 a financial hardship
exemption.
In the November 2020 MFN Model 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 MFN Model 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 MFN Model interim final rule, such
effects have not occurred.
[[Page 73988]]
Nevertheless and notwithstanding the nationwide preliminary
injunction, this analysis uses a baseline in which the November 2020
MFN Model interim final rule was implemented on January 1, 2021, to
calculate the monetized estimates of the effects of this final rule. We
maintain the analytical approach described in the RIA of the November
2020 MFN Model interim final rule and August 2021 proposed rule, and
for the purpose of quantifying the effects of this final rule, assume
that the regulations added by the November 2020 MFN Model interim final
rule would remain in full effect if this final rule was not finalized.
By rescinding the regulations added by the November 2020 MFN Model
interim final rule, this final rule prevents the occurrence of the
estimated costs and transfers presented in the November 2020 MFN Model
interim final rule. As presented in the August 2021 proposed rule (86
FR 43621), 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 MFN Model
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 MFN Model interim final rule and in the
August 2021 proposed rule. This approach illustrates that this final
rule prevents the realization of the annualized/monetized estimates of
costs and transfers that were presented in the November 2020 MFN Model
interim final rule. Because the MFN Model was not implemented, readers
should understand that this final 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 Final
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.
-------------------------------------------------------------------------
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/ 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
Final 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 ($million/ 7,058.3 2018 7 January 2021-December
year). 2027.
7,276.5 2018 3 January 2021-December
2027.
-------------------------------------------------------------------------
From Whom to Whom..................... Federal Government to hospitals/physicians and MA plans.
-------------------------------------------------------------------------
[[Page 73989]]
Annualized Monetized ($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.
----------------------------------------------------------------------------------------------------------------
Comment: A few commenters stated that, based on their own or
others' analyses, the OACT and ASPE estimates shown in the November
2020 MFN Model interim final rule underestimate the negative financial
impact that certain healthcare providers would likely experience had
the MFN Model been implemented. Many commenters expressed concern that
some of the estimated savings would be related to reduced access to
care. We did not receive comments on our approach to illustrate,
inversely, the monetized estimates contained in Table 17 (85 FR 76247)
and Table 18 (85 FR 76248) of the November 2020 MFN Model interim final
rule in Table 1 and Table 2 of the August 2021 proposed rule,
respectively.
Response: We thank stakeholders for their comments. As we noted in
the November 2020 MFN Model interim final rule and the August 2021
proposed rule, there is much uncertainty around the assumptions for
both the OACT and ASPE estimates that were presented in those rules.
Final Decision: After considering the comments on the RIA of our
proposal, and because we are finalizing our proposal as proposed, we
are finalizing the RIA without change; that is, as presented in the
August 2021 proposed rule.
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 final rule affects 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 MFN Model interim final rule (85 FR 76246) from being
realized. Over 20,000 small entities would have been included or
affected by the MFN Model if the model had been implemented. We refer
readers to Table 3 and Table 8 in the November 2020 MFN Model 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 most
likely would have been impacted by the MFN Model had it been
implemented. This final rule withdraws the MFN Model, and therefore
likely impacts these same entities. Accordingly, we have determined
that a Regulatory Flexibility Analysis is required. As its measure of
significant economic impact on a substantial number of small entities,
HHS uses a change in revenue of more than 3 to 5 percent. We believe
that this threshold will be reached by the requirements in this final
rule. Therefore, the Secretary has certified that the August 2021
proposed rule and this final rule will have a significant economic
impact on a substantial number of small entities. The Regulatory
Flexibility Analysis presented in the November 2020 MFN Model interim
final rule (85 FR 76245) describes the potential impact of the MFN
Model, if it had been implemented, on small entities. This final rule
prevents those impacts from being realized. Specifically, the lower
drug payments and alternative add-on payments described in section
III.F. of the November 2020 MFN Model interim final rule will not
occur. Instead, payment for submitted claims will be made under the
applicable Medicare payment methodology. This Regulatory Flexibility
Analysis, 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 604 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. We estimate that this
final rule will have a significant impact on small rural hospitals by
preventing the impacts described in the November 2020 MFN Model interim
final rule (85 FR 76246) from being realized. Specifically, these rural
entities will not experience drug payment reductions and overall
payment reductions. Instead, payment for submitted claims will be made
under the applicable Medicare payment methodology. We estimate that
this final rule will have a parallel significant impact on urban
entities.
We welcomed comments on our estimate of significantly affected
providers and suppliers and the magnitude of estimated effects for the
proposed rule.
Comment: Several commenters stated that our estimate of
significantly affected providers and suppliers and the magnitude of
estimated effects presented in the November 2020 MFN Model interim
final rule underestimated the potential financial losses and
operational impacts that health care
[[Page 73990]]
providers, such as hospitals, physicians and infusion centers, would
have experienced had the MFN Model been implemented as contemplated.
Response: We thank stakeholders for their comments. As we noted in
the November 2020 MFN Model interim final rule and the August 2021
proposed rule, there is much uncertainty around the assumptions for
both the OACT and ASPE estimates that were presented in those rules.
Final Decision: After considering the comments on the estimate of
significantly affected providers and suppliers and the magnitude of
estimated effects of our proposal, and because we are finalizing our
proposal as proposed, we maintain our analysis, as presented in the
August 2021 proposed rule, for this final 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 the August 2021 proposed rule and section IV.C. of this final rule,
the financial impacts for States (that is, an estimated overall
reduction in State spending) presented in the November 2020 MFN Model
interim final rule (85 FR 76235 through 76248) will not be realized.
The August 2021 proposed rule and this final rule did 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 the August 2021 proposed
rule and section IV.C. of this final rule, the financial impacts for
States (that is, an estimated overall reduction in State spending)
presented in the November 2020 MFN Model interim final rule (85 FR
76235 through 76248) will not be realized. Since this rule 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
final 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 December 14, 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 removes 42 CFR
part 513.
Dated: December 21, 2021.
Xavier Becerra,
Secretary, Department of Health and Human Services.
[FR Doc. 2021-28225 Filed 12-27-21; 4:15 pm]
BILLING CODE 4120-01-P
