Health & Welfare Plans Newsletter

November 23, 2020

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[Official Guidance]

Text of CMS Interim Final Rule with Comment Period: Most Favored Nation Model for Medicare Payments

229 pages. "The MFN Model will test whether more closely aligning payment for Medicare Part B drugs and biologicals ... with international prices and removing incentives to use higher-cost drugs can control unsustainable growth in Medicare Part B spending without adversely affecting quality of care for beneficiaries.... These regulations are effective on [the date of publication in the Federal Register, currently scheduled for Nov. 27, 2020].... [C]omments must be received ... no later than [60 days after publication in the Federal Register]." [Also see: Fact Sheet on Most Favored Nation Model; ASPE report on rises in Medicare Part B drug spending; ASPE report on Medicare Part B drug spending and international price comparisons; and press release announcing this rule.] Icon to read more

Centers for Medicare & Medicaid Services [CMS], U.S. Department of Health and Human Services [HHS]

[Official Guidance]

Text of HHS Final Regs: Removal of Safe Harbor Protection for Rebates Involving Prescription Pharmaceuticals and Creation of New Safe Harbor Protection for Certain Point-of-Sale Reductions in Price on Prescription Pharmaceuticals and Certain Pharmacy Benefit Manager Service Fees (PDF)

345 pages. "Amending this regulation changes the definition of certain conduct that is protected from liability under the Federal anti-kickback statute, section 1128B(b) of the Social Security Act ... New regulatory text in the amendment revises the discount safe harbor. By excluding from the definition of a discount eligible for safe harbor protection certain reductions in price or other remuneration from a manufacturer of prescription pharmaceutical products to plan sponsors under Medicare Part D or pharmacy benefit managers (PBMs) under contract with them, the Department modifies the existing discount safe harbor in particular contexts. Existing safe harbors otherwise remain unchanged. Safe harbors are also created for two additional types of arrangements. The first protects certain point-of-sale reductions in price on prescription pharmaceutical products, and the second protects certain PBM service fees." Icon to read more

Office of Inspector General [OIG], U.S. Department of Health and Human Services [HHS]

[Guidance Overview]

Administration Finalizes Most-Favored Nation Drug Pricing Rule

"Rather than depending for its success on whether private sector firms volunteer for a novel, difficult task, CMS implements the IFR through the existing buy-and-bill model. Under the IFR, providers themselves will be reimbursed for the 50 Part B drugs that are the subject of the IFR program based on the most-favored-nations price.... CMS has now expanded the scope of the program, choosing to implement a mandatory nationwide program affecting most (though not all) Medicare providers." Icon to read more

Rachel Sachs, in Health Affairs Blog

[Guidance Overview]

Administration Implements Medicare Part B 'Most Favored Nation' Drug Pricing Reform

"The IFR, if it withstands judicial challenge, will restructure prescription drug payments to physicians, hospitals, and other providers and suppliers for the highest expenditure drugs eligible for reimbursement in the Medicare Part B program (commonly known as 'buy and bill' drugs). The [most favored nation (MFN)] Model's actual impact on drug prices, however, remains unclear. Below we describe the key elements of the MFN Model and offer a brief analysis of its potential impact and possible vulnerabilities." Icon to read more

King & Spalding

[Guidance Overview]

Administration Finalizes Drug Pricing Rebate Rule

"There appear to be no major structural changes between the NPRM and Friday's final rule (which is now scheduled to take effect in 2022, rather than in 2020, as originally proposed). But there are at least two points worth noting about the new release.... Removing Medicaid Managed Care Organizations ... Changing course by confirming that premiums and spending will not rise ... Like the most-favored-nation rule, the release of the final rebate rule came with additional legal complications that may jeopardize its implementation." Icon to
read more

Rachel Sachs, in Health Affairs Blog

President Trump Unveils Sweeping Reforms to Lower Drug Prices

"[The cost of] Medicare Part B drugs ... [has] increased by 11.5% over the past five years. Medicare Part B drug spending of $30 billion in 2019 made up 14% of total Medicare FFS Part B spending, up from 11% in 2015. [CMS] is eliminating the Unapproved Drugs Initiative to stop price gouging by drug makers." Icon to read more

HealthLeaders Media

When to Consider a New Benefits Administration Platform

"[H]ow do you know when it's time to consider a new benefits administration solution? ... [1] You rely on paper enrollment and your in-house HR team.... [2] You want to improve your data flow.... [3] You want a more integrated experience.... [4] Your account team isn't able to deliver for your needs today ... or tomorrow.... [5] You want to boost employee engagement." Icon to read more

bswift

Exceptional Usefulness and Quality iconThe HSA Shoebox Rule

" [IRS Notice 2004-50] confirms that as long as the requirements are followed, 'there is no time limit on when the distribution must occur.' ... The HSA Shoebox Rule Requirements: [1] The expense was incurred after the HSA was established; [2] The individual keeps records sufficient to later show that the distributions were exclusively to pay or reimburse qualified medical expenses; [3] The qualified medical expenses have not been previously paid or reimbursed from another source; and [4] The medical expenses have not been taken as an itemized deduction in any prior taxable year." Icon to read more

ABD Insurance & Financial Services

State Trends in Employer Premiums and Deductibles, 2010-2019

"Premium contributions and deductibles in employer plans accounted for 11.5 percent of median household income in 2019, up from 9.1 percent a decade earlier. Premium contributions and deductibles were 10 percent or more of median income in 37 states in 2019, up from 10 states in 2010. Nine states have combined costs of 14 percent or more of median income. The total cost of premiums and potential spending on deductibles across single and family policies ranged from a low of $5,535 in Hawaii to a high of more than $8,500 in nine states." Icon to read more

The Commonwealth Fund

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BenefitsLink Health & Welfare Plans Newsletter, ISSN no. 1536-9595. Copyright 2020 BenefitsLink.com, Inc. All materials contained in this newsletter are protected by United States copyright law and may not be reproduced, distributed, transmitted, displayed, published or broadcast without the prior written permission of BenefitsLink.com, Inc., or in the case of third party materials, the owner of those materials. You may not alter or remove any trademark, copyright or other notices from copies of the content.

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