(1) https://oig.hhs.gov/oei/reports/OEI-01-21-00401.asp. We propose to continue to publish the top 20 high dollar volume list of multiple source physician-administered drugs, as statutorily required, to provide a means of prohibiting Federal matching funds, as necessary, if States are not requiring the use of NDC codes, and invoicing for rebates on these drugs. To derive average costs, we used data from the U.S. Bureau of Labor Statistics' (BLS') May 2021 National Occupational Employment and Wage Estimates for all salary estimates ( Through a series of new announcements from the U.S. Announcement of the Advisory Panel on Outreach and Education (APOE on Appendix 2), which sets forth standards for the formation and use of federal advisory committees. 22. We also explained that if a manufacturer offers multiple price concessions to two entities for the same drug transaction, such as rebates to a PBM where the rebates are designed to adjust prices at the retail or provider level, in addition to discounts to a retail community pharmacy's final drug price, all discounts related to that transaction which adjust the price available from the manufacturer should be considered in the final price of that drug when determining best price (81 FR 5252 through 5253). documents in the last year, 9 notices. On May 17, 2022, the United States District Court for the District of Columbia vacated and set aside the accumulator adjustment rule of 2020 in response to a complaint filed against the Secretary regarding the accumulator provisions within the December 31, 2020 final rule. Manufacturer Payment of Unpaid Rebates Due to Misclassification (447.509(d)(3)), c. Agency Authority To Correct Misclassifications and Additional Penalties for Drug Misclassification (447.509(d)(4)), d. Transparency of Manufacturer Misclassification (447.509(d)(5)), 2. documents in the last year, 84 Since States may choose their preferred method of notification of beneficiaries including through email, form letters, list serves, or Medicaid portals, we are requesting comments on how to develop a cost estimate. Users with the CMS Administrator role should have access to the following backend tabs by default: CMS Administrator is the only system role that gives complete access to all objects and features within dotCMS. [5354] to the courts under 44 U.S.C. The President of the United States issues other types of documents, including but not limited to; memoranda, notices, determinations, letters, messages, and orders. Section VIII.a, provides that the agreement is subject to any changes in the Medicaid statute or regulations that affect the rebate agreement. Under that authority, the Secretary issued Federal regulations at 447.502, 447.512, and 447.518 that further elaborate that generally, payments to pharmacies for drugs that they dispense, and are paid for under the State Plan, are to be based on a two-part formula which consists of: (1) the ingredient cost of the drug that is dispensed based on the actual acquisition cost (AAC); and, (2) a professional dispensing fee (PDF) for the drug based on the pharmacy's cost of dispensing, that is, the cost of the pharmacist's professional services for ensuring that the appropriate COD is dispensed or transferred to a Medicaid beneficiary. One specific element of drug product information that is required to be submitted by manufacturers includes drug category or drug classification information. To satisfy the requirement that a manufacturer have entered into and have in effect an agreement with the Secretary, we are specifying at proposed 447.510(h) that manufacturers must provide CMS with all labeler codes for all the manufacturer's applicable drugs. 1731 King Street Alexandria, Virginia 22314. previously certified by the prior manufacturers without making findings that the prior manufacturer violated any law. States do not have access to invoice data of manufacturers or purchasers, or information as to how manufacturers have arrived at the prices they charge wholesalers or direct distributers. https://www.cms.gov/Medicare/E-Health/Eprescribing?msclkid=27a13cf3b44e11ecb30d5dd85675d203. The 340B Drug Pricing Program uses the AMP and the Unit Rebate Amount (which is the amount calculated to determine the Medicaid rebate for each dosage form and strength of a COD, and is based in part on AMP) to calculate the 340B ceiling price. In the introductory text, adding (COD) Jina Ragland, Associate State Director of Advocacy and Outreach, AARP Nebraska. fraternal groups, unions, or State workers' compensation commissions; and medical support provided by a parent under a court or administrative order. When initially reporting drug product data upon the execution of an NDRA, manufacturers have 30 days after the date on which they enter into an NDRA to report drug product data for their existing CODs under section 1927(b)(3)(A) of the Act. https://www.medicaid.gov/prescription-drugs/downloads/mfr-rel-113.pdf. Proposal To Modify the Definition of Covered Outpatient Drug, 2. propose to do by estimating whether or not the covered outpatient drug's cost would be in the top 5th percentile of Medicaid spending by comparing a manufacturer's published launch price (available as a published WAC or published by the manufacturer) to Medicaid per claim spending or if treatment costs are greater than $500,000 (indexed for inflation using the CPIU). Amend 433.139 by revising paragraphs (b)(3)(i) and (b)(3)(ii)(B) to read as follows: (i) The claim is for preventive pediatric services, including early and periodic screening, diagnosis and treatment services provided for under part 441, subpart B, of this chapter, that are covered under the State Plan that requires a State to make payments without regard to third party liability for pediatric preventive services except that the State may, if the State determines doing so is cost-effective and will not adversely affect access to care, only make such payment if a third party so liable has not made payment within 90 days after the date the provider of such services has initially submitted a claim to such third party for payment for such services; or. Now everytime a new user is added through the Admin Console, the user gets the login info sent (of course only if you also filled in the e-mail address in the user data). This includes information reported by manufacturers to CMS in combination with publicly available information in making determinations of whether a drug is misclassified in the MDRP. Start Printed Page 34273 We expect application of the measures proposed at 447.510(k)(2)(i) through (iv) would capture an initial set of high-cost CODs that could significantly impact Medicaid covered outpatient drug spending. While the NDRA addresses rebate disputes, the lack of policy on audit and dispute-initiation timeframes has been interpreted as there being no timeline on initiation of disputes on drug utilization data, unreasonably burdening State rebate programs. For Non-Group Health Plan (NGHP) Recovery: Medicare Secondary Payer Recovery Portal (MSPRP), https://www.cob.cms.hhs.gov/MSPRP/ (Beneficiaries will access via Medicare.gov), For Group Health Plan (GHP) Recovery: Commercial Repayment Center Portal (CRCP), To electronically submit and track submission and status for Workers Compensation Medicare Set-Aside Arrangements (WCMSAs) use the Workers Compensation Medicare Set-Aside Portal (WCMSAP), https://www.cob.cms.hhs.gov/WCMSA/login (Beneficiaries will access via Medicare.gov). consistent with the MSIAA. This provision is a direct result of a statutory change to remove the cap on Medicaid drug rebates (the maximum rebate amount). We propose that a misclassification in the MDRP occurs when a manufacturer reports and certifies its covered outpatient drug under a drug category or other drug product data related to a COD that is not supported by the statutory and regulatory definitions of S, I, or N. We also propose to define as a misclassification a situation in which the manufacturer accurately reports and certifies its COD under a drug category or other related drug product data for a COD, but is paying a different rebate amount than that required by the statute and regulations. This would mean that the manufacturers would have to determine which prices to use to calculate the past due rebates, and for which units rebates are owed, and pay the States for these rebates. Letter to CMS Administration on Implementation of No Surprises Act This directly affects Medicaid payments and rebates. Disability Determination for Social Security Administration Certain eligible entities and hospitals are permitted to purchase drugs under the 340B Drug Pricing Program and dispense these drugs to Medicaid beneficiaries. We may consider issuing additional guidance on the nature and scope of the other information we may request. Given the absence of a definition of internal investigation or specificity as to when this exception applies, some manufacturers have broadly interpreted the internal investigation exception to the 12-quarter rule. Contact Us - illinois.jobs2web.com 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. . documents in the last year, by the Coast Guard that we are equipped to handle your needs. Additionally, if the payment to the provider is solely for the drug (and no other services), and the drug is separately identified, it is also a direct reimbursement. Section 6002 of the DRA added sections 1903(i)(10)(C) and 1927(a)(7) to the Act to require the States to collect and submit certain utilization data on certain physician-administered drugs in order for FFP to be available for these drugs, and for States to secure rebates. That audit authority encompasses many processes for seeking adjustments in utilization data, including disputes, assessments, reviews and hearings, and may involve paper procedures, informal phone calls, and emails or other mechanisms. This unique system role gives a user access to all system portlets, and all dotCMS objects regardless of the role permissions on those objects. lock This list will identify drugs that have: (i) The highest Medicaid drug spend per claim, which is when the claim is in the top 5th percentile of Medicaid spending per claim; (ii) The highest total Medicaid drug spend, which is when the annual Medicaid drug spend, net of Federal Medicaid drug rebates, is greater than 0.5 percent of total annual Medicaid drug spend, net of Federal Medicaid drug rebates; (iii) The highest 1-year price increase among single source covered outpatient drugs, which is when the covered outpatient drug falls in the top 1 percent of covered outpatient drugs with the highest median Wholesale Acquisition Cost (WAC) increase over 12 months; or. 6. Even if a therapeutic vaccine product is required coverage under other Medicaid benefits, this proposal would help to ensure that manufacturers report product and pricing data accurately and pay rebates to States, as applicable. Start Printed Page 34255. For example, a drug is misclassified by the manufacturer if it is reported as a noninnovator multiple source drug when the correct classification for the COD, as determined by the agency, is a single source drug or an innovator multiple source drug, based on application of relevant statutes and regulations. PDF Region 6 - Dallas - Centers for Medicare & Medicaid Services All but one State, are currently in compliance with the PDF requirements. Manufacturers should assure that those drugs that are classified as N in the MDP system are drugs other than S or I drugs.[26]. Secretary information. Medicaid savings would be generated by the increased rebates due to the removal of the cap on rebates with an estimate of an average of $14.21 billion over 10 years. In the definition of Covered outpatient drug: i. It would not apply under any title XIX statutory provisions other than section 1927(k)(2), or to separate CHIPs operating pursuant to 42 CFR 457.70(a)(1) and (d), or for purposes of the Vaccines for Children Program. of this proposed rule, we estimate that these requirements would affect 282 managed care plans and their subcontractors (mainly PBMs) in the country and 40 States. . This means the market date of a drug is the date that the drug was first marketed, regardless of the entity that marketed the drug. We also propose 447.510(k)(3)(iii)(A) that if after application of 447.510(k)(3)(i) and (ii), more than 10 CODs still remain, CMS would proceed to the third step and consider soliciting State-specific Medicaid program information as to the manufacturer's level of effort to lower drug price for the Medicaid program, such as a manufacturer offering other programs to lower the cost of the drug to the State such as subscription models, VBP arrangements under the multiple best price approach, or other special arrangements. Specifically, we propose to add to the regulatory definition of covered outpatient drug at 447.502 that the direct reimbursement for a drug may include both reimbursement for a drug alone, or reimbursement for a drug plus the service, in one inclusive payment, if the drug and the itemized cost of the drug are separately identified on the claim. At this time, we cannot determine cost estimates for this item. 15. Proposals Implementing Section 1927(a)(7) of the Act and Federal Financial Participation (FFP): Conditions Relating to Physician-Administered Drugs, 12. Section 1927(c)(3) of the Act, titled Rebate for other drugs, describes in subsections (c)(3)(A) and (B) the basic rebate calculation for covered outpatient drugs other than single source drugs and innovator multiple source drugs. Request for InformationComments on Issues Relating to Requiring a Diagnosis on Medicaid Prescriptions as a Condition for Claims Payment, 17. assigned by the FDA, and one manufacturer may be assigned multiple labeler codes by FDA. This repetition of headings to form internal navigation links The total rebate amount for a drug other than a single source drug or innovator multiple source drug is equal to the basic rebate amount plus the additional rebate amount, if any. We, therefore, estimate a one-time decreased burden reduction of $6,037,012.80 (45 disputes $644.98 hr/dispute 52 States 4 quarters (1 year)). 7500 Security Boulevard, Baltimore, MD 21244, An official website of the United States government, Office of Burden Reduction and Health Informatics, Office of Strategy, Performance, and Results, Office of Acquisition and Grants Management, Office of Equal Opportunity and Civil Rights, Office of Program Operations and Local Engagement, Office of Strategic Operations and Regulatory Affairs, Office of Security, Facilities and Logistics Operations, Center for Clinical Standards and Quality, Center for Consumer Information and Insurance Oversight, Center for Medicare and Medicaid Innovation. Thus, this suspension authority would serve as an incentive for manufacturers to report their product and pricing information timely so that drugs of the manufacturer would continue to be covered under Medicaid and the drug rebate program. Join the global network of dotCMS partners. New highly individualized gene and cell therapy drug treatments have resulted in manufacturer launch prices that have increased dramatically, impacting the manufacturers' prices reported to CMS. We have also seen pricing-related issues relating to the production methods for these drugs, and query whether and how such methods should factor into the prices that are reported to us under section 1927(b)(3)(A) of the Act. codes (commonly referred to as J-codes), which group together different manufacturers of the same drug in the same code. Due to the uncertainty involved with accurately quantifying the number of entities that will be directly impacted and will review this proposed rule, we assume that the total number of unique commenters are based on the current 792 manufacturers participating in the MDRP. Requirement and penalties for manufacturers. Coverage of certain vaccinations recommended by the Advisory Committee on Immunization Practices (ACIP) is required for children and youth under age 21 who are eligible for the Early and Periodic Screening, Diagnostic, and Treatment (EPSDT) benefit and for beneficiaries receiving Medicaid coverage through an Alternative Benefit Plan. a. Revising the section heading and paragraph (b)(1)(v); The additions and revision read as follows: (v) The change is to address specific rebate adjustments to States by manufacturers, as required by CMS or court order, or under an internal investigation as defined at 447.502 or an Office of Inspector General (OIG) or Department of Justice investigation. On May 17, 2022, the United States District Court for the District of Columbia ruled in favor of the plaintiff and ordered that the accumulator adjustment rule of 2020 be vacated and set aside. Jean-Venable Robertson Goode, Professor, Department of Pharmacotherapy and Outcomes Science, School of Pharmacy, Virginia Commonwealth University. After contacting several States, we estimate that per State, between 10 and 80 disputes are initiated routinely in a quarter on rebate claims greater than 3 years old, and those disputes on average take an Operations Research Analyst between 30 minutes to 4 months to resolve, depending on the complexity of the dispute and how long ago the claim was paid. publication in the future. In such cases, a manufacturer may still need to use reasonable assumptions to report an AMP for that quarter. https://www.medicaid.gov/medicaid/prescription-drugs/medicaid-drug-rebate-program/medicaid-drug-rebate-program-change-request/index.html) to correct drug product and pricing information. The provision allows us to also pursue penalties against manufacturers that will not change their classification as a result of the denial of their narrow exception request, and would also allow us to impose penalties on manufacturers that pay a different amount in rebates to States than is supported by the product and pricing data that they are reporting to MDP. The Administrator directs the planning, coordination, and implementation of the programs under Titles XI, XVIII, XIX, and XXI of the Social Security Act and related statutes, as amended, and directs the development of effective relationships between these programs and private and federally supported health-related programs. That is, all the labelers of the manufacturer have to be in the program, or none of the labelers can be in the program. The regulatory definition of vaccine that is proposed to be added to 447.502 would be established solely for the purposes of the MDRP, and be applicable only to that program. 2. In addition to other standards outlined in 438.4 through 438.7, these requirements for capitation rates related to the MLR are key to ensuring that Medicaid managed care capitation rates are actuarially sound. Deliver performance, scalability and flexibility so you can focus on driving revenue. (2) In that release, we specified that the manufacturer should notify a State of the disputed data no later than 38 days after the State utilization data is sent. 23, 2018). There have been reports of new disputes being initiated on claims dating back several decades to paper claims, which is placing unnecessary burden on many State rebate programs. For proposed measure 447.510(k)(2)(iii), we would look at published WACs to determine when a COD's price increase falls in the top 1 percent of CODs with the highest median WAC increase over a 12-month period. Thank you for taking the time to create a comment. We are proposing a definition of drug product information for the purposes of the MDRP. . Manufacturer Release 95,[30] on the FDA web page at electronic version on GPOs govinfo.gov. Gene and cell therapy drugs especially, while transformative in terms of therapeutic benefits, are being priced in the millions of dollars. In accordance with section 1927(c)(3)(C)(i) of the Act and the special rules for application of provision in section 1927(c)(3)(C)(ii)(IV) and (V) of the Act, this sunset provision also applies to the limit on maximum rebate amounts for CODs other than single source or innovator multiple source drugs. Base Date AMP is defined in the National Drug Rebate Agreement (NDRA) at I. Consistent with the proposed clarification to the definition of manufacturer, the proposed suspension of the manufacturer's NDRA would be applied to all the associated labeler rebate agreements of the manufacturer. The PBMs may also use a Maximum Allowable Cost (MAC) benchmark for generic drugs, which is a PBM proprietary benchmark that reimburses pharmacy providers for generics. However, if continued suspension results in termination, such termination could affect Medicare Part B and 340B Drug Pricing Program participation. It also includes a drug product marketed by any cross-licensed producers, labelers, or distributors operating under the NDA and a covered outpatient drug approved under a BLA, ELA, or ADA. Secure .gov websites use HTTPSA (E) If the drug is approved using FDA's accelerated approval pathway in section 506(c) of the FFDCA, any additional post-market studies required by FDA. In addition, we are proposing that Medicaid managed care plans that subcontract with a pharmacy benefit administrator or pharmacy benefit manager require the subcontractor to provide specific details to the Medicaid managed care plans about the various pharmacy and non-pharmacy (administrative) costs associated with providing the pharmacy benefit, so the managed care plan can appropriately calculate its Medicaid managed care MLR. Section 1927(k)(2)(B) of the Act specifically excludes vaccines from the definition of COD for purposes of the MDRP. Consistent with section 1927(k)(3) of the Act, the regulatory definition includes a limiting definition in paragraph (2) of the definition of covered outpatient drug at 447.502 that excludes from the definition of COD any drug, biological product, or insulin provided as part of or incident to and in the same setting as any one in a list of services, and for which payment may be made as part of that service instead of as a direct reimbursement for the drug. * * *. Medicaid managed care plans often contract with a subcontractor PBM to operate the pharmacy benefit provided to Medicaid beneficiaries. Moreover, we are also proposing additional program integrity and administration policies including: amending the regulatory definition of noninnovator multiple source drug; adding regulatory definitions of a manufacturer's internal investigation; drug product information; market date; and, modifying the definition of COD. (81 FR 5280). You can change the message subject to your liking. As can be seen in Tables 9 and 10, the economic impacts are disproportionate for small firms. The intent of this proposed rule is to implement several new legislative requirements relating to the operation of the MDRP and other program integrity, and program administration proposals. Furthermore, incorrectly attributing administrative service costs as medical expenditures, may increase the MLR numerator, and thus increase the per-member-per-month (PMPM) revenue a managed care entity can receive while appearing to meet MLR requirements. We are proposing to require that States must be invoicing for rebates for all physician-administered drugs that are CODs. * * *. Our proposal would prevent manufacturers from manipulating the system as to select drugs by assigning separate labeler codes, without consequence to all of their CODs, and codify a longstanding policy that has faced scrutiny more recently. Michael Minor, National Director, H.O.P.E. (ii) Suspend the misclassified drug and the drug's status as a covered outpatient drug under the manufacturer's rebate agreement from the MDRP, and exclude the misclassified drug from FFP in accordance with section 1903(i)(10)(E) of the Act. [36] Executive Order 13132 establishes certain requirements that an agency The agency does not as a routine matter review or verify the drug category classifications and related drug product information reported and certified by the manufacturer. See 81 FR 5191. As stated previously in this proposed rule, States would realize some savings because of the increase in rebates; however, it is not known if manufacturer drug prices to Medicaid would decrease because of the removal of the cap as manufacturers adjust pricing to reflect the increase in Medicaid drug rebates. 60 FR 48447 through 48448. CMS may request that a manufacturer address the non-proprietary information specified in paragraph (k)(6) of this section in a public forum. (28) Manufacturer-sponsored patient refund/rebate programs, to the extent that the manufacturer provides a full or partial refund or rebate to the patient for out-of-pocket costs and the pharmacy, agent, or other AMP eligible entity does not receive any price concessions. For the same contract changes between the MCOs and the subcontractors (mainly PBMs), we also estimate a one-time private sector burden of 7,050 hours (282 managed care plans 25 hr/response) at a cost of $649,587 (7,050 hr $92.14/hr). With respect to the reporting burden, we estimate that 282 PBMs of those 282 managed care plans to separately report incurred claims expenses described in 438.8(e)(2) from fees paid for administrative activities would take approximately 2 hours to identify these costs separately and report separately to the managed care plans. Yet, notwithstanding our interpretation of the statute, many manufacturers have disregarded our reasonable interpretation of the statute and have continued to misreport drugs marketed under an NDA as noninnovator multiple source drugs for periods prior to April 1, 2016 (Manufacturer Release #113- We propose that the managed care contracts, and thus MCOs, PIHPs and PAHPs, must comply with this new requirement no later than the next rating period for Medicaid managed care contracts, following the effective date of the final rule adopting this new regulatory provision.