Skip to main content
Sister Publication Links
  • ESG: THE IMPLEMENTATION IMPERATIVE
Subscribe
  • Sign Up Free
  • Login
  • Subscribe
  • News
    • Current News
    • Providers
    • Insurance
    • Digital Health
    • Government
    • Finance
    • Technology
    • Safety & Quality
    • Transformation
    • People
    • Regional News
    • Digital Edition (Web Version)
    • Patients
    • Operations
    • Care Delivery
    • Payment
    • Midwest
    • Northeast
    • South
    • West
  • Unwell in America
  • Opinion
    • Bold Moves
    • Breaking Bias
    • Commentaries
    • Letters
    • Vital Signs Blog
    • From the Editor
  • Events & Awards
    • Awards
    • Conferences
    • Galas
    • Virtual Briefings
    • Webinars
    • Nominate/Eligibility
    • 100 Most Influential People
    • 50 Most Influential Clinical Executives
    • Best Places to Work in Healthcare
    • Excellence in Governance
    • Health Care Hall of Fame
    • Healthcare Marketing Impact Awards
    • Top 25 Emerging Leaders
    • Top 25 Innovators
    • Diversity in Healthcare
      • - Luminaries
      • - Top 25 Diversity Leaders
      • - Leaders to Watch
    • Women in Healthcare
      • - Luminaries
      • - Top 25 Women Leaders
      • - Women to Watch
    • Digital Health Transformation Summit
    • ESG: The Implementation Imperative Summit
    • Leadership Symposium
    • Social Determinants of Health Symposium
    • Women Leaders in Healthcare Conference
    • Best Places to Work Awards Gala
    • Health Care Hall of Fame Gala
    • Top 25 Diversity Leaders Gala
    • Top 25 Women Leaders Gala
    • - Hospital of the Future
    • - Value Based Care
    • - Supply Chain
    • - Hospital at Home
    • - Workplace of the Future
    • - Digital Health
    • - Future of Staffing
    • - Hospital of the Future (Fall)
  • Multimedia
    • Podcast - Beyond the Byline
    • Sponsored Podcast - Healthcare Insider
    • Video Series - The Check Up
    • Sponsored Video Series - One on One
  • Data Center
    • Data Center Home
    • Hospital Financials
    • Staffing & Compensation
    • Quality & Safety
    • Mergers & Acquisitions
    • Data Archive
    • Resource Guide: By the Numbers
    • Surveys
    • Data Points
  • MORE+
    • Contact Us
    • Advertise
    • Media Kit
    • Newsletters
    • Jobs
    • People on the Move
    • Reprints & Licensing
MENU
Breadcrumb
  1. Home
  2. Medicare
January 27, 2021 04:47 PM

Hospitals push CMS to pause 'most favored nation' drug-pricing rule

Michael Brady
  • Tweet
  • Share
  • Share
  • Email
  • More
    Reprints Print
    Modern Healthcare Illustration / Getty Images

    Hospitals want CMS to pull the plug on its contentious "most favored nation" drug-pricing rule, a Trump-era demonstration that would tie Medicare outpatient drug pay to drug prices in other wealthy countries.

    Providers argued the policy is illegal and wouldn't lower drug prices or patients' out-of-pocket costs in comments on the interim final rule due Tuesday. The American Hospital Association said it would "harm patients' access to critical, lifesaving drugs" and create more financial problems for hospitals because "the rule places the entire onus of reducing drug prices on hospitals, rather than on drug companies or on Medicare." Experts have said the Trump administration's last-minute plan depends on providers negotiating drugmakers' prices down to meet reduced payment levels.

    CMS should "withdraw it immediately and replace it with a serious effort at drug pricing reform," AHA wrote.

    The rule would create the CMS Innovation Center's first nationwide, mandatory experiment, marking "sea change in the way … models have been adopted and implemented," according to AHA.

    Hospitals suggested CMS doesn't have the power to carry out such a large experiment, saying the model "is not a test at all" and amounts to "the adoption of a nationwide policy for the highest expenditure drugs," according to the Federation of American Hospitals. FAH noted that the 50 drugs included in the model make up about 80% of Medicare spending for Part B drugs.

    "There is no control group that will be unaffected by the model's impact in order to make any conclusion as to whether the intervention was successful as would occur in a conventional demonstration model," the letter said.

    According to CMS, the model would save taxpayers and beneficiaries more than $85 billion over seven years, mostly due to lower utilization. Nearly 20% of people covered by Medicare would lose access to treatment by the end of the model's second year.

    "Savings to the Medicare program should not be on the backs of beneficiaries, many of whom live on fixed incomes and already struggle with access to care. Further, this rule would codify a system of health inequities. Beneficiaries with sufficient personal resources to pay for drugs will continue to have access, while other beneficiaries will not," the Association of American Medical Colleges wrote.

    AAMC blamed other CMS policy changes for increased outpatient spending on separately payable drugs, saying that changes to the inpatient-only list and 2-midnight requirements have driven "a shift from the inpatient to outpatient setting."

    "Hospital outpatient departments and off-campus provider-based departments (PBDs) are seeing a spike in referrals of patients requiring treatment for advanced stages of disease," the group said.

    AARP didn't comment on the rule, but conservative advocacy groups like Americans for Tax Reform aligned themselves with drugmakers, taking aim at the plan for relying on price controls to lower drug spending. ATR argued the plan would reduce access to new cures, limit pharmaceutical innovation and employment, and "move America one step closer to a government-run healthcare system."

    Groups representing drugmakers, including the Pharmaceutical Research and Manufacturers Association—PhRMA—did not comment on the rule. Drugmakers successfully sued to block the model from taking effect on Jan. 1. The Biden administration is unlikely to move forward with the plan following a memo last week from White House Chief of Staff Ron Klain directing agencies to freeze new regulations that haven't taken effect.

    Letter
    to the
    Editor

    Send us a letter

    Have an opinion about this story? Click here to submit a Letter to the Editor, and we may publish it in print.

    Recommended for You
    older people - Medicare - insurance
    Medicare Advantage marketing was different in 2023. That's no accident.
    Most Popular
    1
    More healthcare organizations at risk of credit default, Moody's says
    2
    Centene fills out senior executive team with new president, COO
    3
    SCAN, CareOregon plan to merge into the HealthRight Group
    4
    Blue Cross Blue Shield of Michigan unveils big push that lets physicians take on risk, reap rewards
    5
    Bright Health weighs reverse stock split as delisting looms
    Sponsored Content
    Daily Dose Newsletter: Sign up to receive a late afternoon weekday roundup of that day’s breaking news and developments in healthcare.
    Get Newsletters

    Sign up for enewsletters and alerts to receive breaking news and in-depth coverage of healthcare events and trends, as they happen, right to your inbox.

    Subscribe Today
    MH Magazine Cover

    MH magazine offers content that sheds light on healthcare leaders’ complex choices and touch points—from strategy, governance, leadership development and finance to operations, clinical care, and marketing.

    Subscribe
    Connect with Us
    • LinkedIn
    • Twitter
    • Facebook
    • RSS

    Our Mission

    Modern Healthcare empowers industry leaders to succeed by providing unbiased reporting of the news, insights, analysis and data.

    Contact Us

    (877) 812-1581

    Email us

     

    Resources
    • Contact Us
    • Advertise with Us
    • Ad Choices Ad Choices
    • Sitemap
    Editorial Dept
    • Submission Guidelines
    • Code of Ethics
    • Awards
    • About Us
    Legal
    • Terms and Conditions
    • Privacy Policy
    • Privacy Request
    Modern Healthcare
    Copyright © 1996-2023. Crain Communications, Inc. All Rights Reserved.
    • News
      • Current News
      • Providers
      • Insurance
      • Digital Health
      • Government
      • Finance
      • Technology
      • Safety & Quality
      • Transformation
        • Patients
        • Operations
        • Care Delivery
        • Payment
      • People
      • Regional News
        • Midwest
        • Northeast
        • South
        • West
      • Digital Edition (Web Version)
    • Unwell in America
    • Opinion
      • Bold Moves
      • Breaking Bias
      • Commentaries
      • Letters
      • Vital Signs Blog
      • From the Editor
    • Events & Awards
      • Awards
        • Nominate/Eligibility
        • 100 Most Influential People
        • 50 Most Influential Clinical Executives
        • Best Places to Work in Healthcare
        • Excellence in Governance
        • Health Care Hall of Fame
        • Healthcare Marketing Impact Awards
        • Top 25 Emerging Leaders
        • Top 25 Innovators
        • Diversity in Healthcare
          • - Luminaries
          • - Top 25 Diversity Leaders
          • - Leaders to Watch
        • Women in Healthcare
          • - Luminaries
          • - Top 25 Women Leaders
          • - Women to Watch
      • Conferences
        • Digital Health Transformation Summit
        • ESG: The Implementation Imperative Summit
        • Leadership Symposium
        • Social Determinants of Health Symposium
        • Women Leaders in Healthcare Conference
      • Galas
        • Best Places to Work Awards Gala
        • Health Care Hall of Fame Gala
        • Top 25 Diversity Leaders Gala
        • Top 25 Women Leaders Gala
      • Virtual Briefings
        • - Hospital of the Future
        • - Value Based Care
        • - Supply Chain
        • - Hospital at Home
        • - Workplace of the Future
        • - Digital Health
        • - Future of Staffing
        • - Hospital of the Future (Fall)
      • Webinars
    • Multimedia
      • Podcast - Beyond the Byline
      • Sponsored Podcast - Healthcare Insider
      • Video Series - The Check Up
      • Sponsored Video Series - One on One
    • Data Center
      • Data Center Home
      • Hospital Financials
      • Staffing & Compensation
      • Quality & Safety
      • Mergers & Acquisitions
      • Data Archive
      • Resource Guide: By the Numbers
      • Surveys
      • Data Points
    • MORE+
      • Contact Us
      • Advertise
      • Media Kit
      • Newsletters
      • Jobs
      • People on the Move
      • Reprints & Licensing