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January 12, 2021

Courts Halt Most Favored Nation Model That Could Significantly Reduce Medicare Reimbursement to Providers and Require Direct Negotiation with Manufacturers

This Briefing is brought to you by AHLA’s Payers, Plans, and Managed Care Practice Group.
  • January 12, 2021
  • Jeff Davis , Baker Donelson Bearman Caldwell & Berkowitz PC

Two federal district courts have intervened to temporarily prevent the Centers for Medicare and Medicaid Services (CMS) from implementing a payment model, which was scheduled to begin January 1, 2021 that would significantly reduce Medicare reimbursement rates for high-cost drugs to most hospitals, physician offices, and ambulatory surgical centers and require providers to negotiate discounts with drug manufacturers. CMS issued an interim final rule with comment period (IFC) on November 20, 2020, and published in the Federal Register on November 27, 2020, to implement a Most Favored Nation Model (MFN Model), which would phase-in payment rates for 50 high-cost drugs based on international prices.

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