Most Favored Nation Rule Would "Decimate Cancer Care in the United States," and Must be Immediately Withdrawn, ASCO Says in New Comments

December 16, 2020

The Most Favored Nation (MFN) rule is “very likely to decimate cancer care in the U.S.” and will deny 1 in 5 patients access to essential, life-prolonging cancer treatment, the Association for Clinical Oncology (ASCO) wrote in comments submitted to the Centers for Medicare & Medicaid Services on December 16, 2020. The MFN rule, which was published in the Federal Register in late November, will create a new, mandatory, nationwide, 7-year demonstration project that reduces reimbursement for a number of cancer treatments.

“CMS is betting the care of patients on an untested theory that drug prices will shift because it reimburses physicians and providers for drugs at an artificially low rate that bears no relationship to the actual market price providers pay,” ASCO Board Chair Monica M. Bertagnolli, MD, FACS, FASCO, wrote in the comment letter. “Although the impact of this policy change by itself would be devastating, it does not exist in a vacuum. It would exacerbate the struggles to survive practices are already facing in the face of multiple cuts and negative adjustments related to routine annual rules, new proposals, and the COVID-19 pandemic.”

ASCO’s comments urge CMS to immediately withdraw the model, which is currently slated to take effect January 1, 2021.

Specific concerns detailed in the comment letter include:

Beneficiary access – According to CMS’ own analysis, the MFN Model will deny life-saving cancer therapy to tens of thousands of Medicare beneficiaries. In the model, beneficiaries will be forced to move their care away from their regular provider in order to obtain necessary, often life-saving drugs – and at least 19% of patients will lose access to critical drugs. Patients’ loss of access contributes significantly to the “savings” forecast to Medicare by CMS.

“The rule plainly projects that nearly 1 in 5 patients will be unable to secure care anywhere and will likely forgo essential, life-prolonging treatment,” ASCO writes. “Saving money by reducing access to appropriate care cannot be the intent of any well-meaning policy, but it is core to the success of this proposal.”

Cancer Providers – ASCO’s comments note that the rule does not attempt to lower drug prices, but instead places the onus on each provider to somehow influence drug pricing. CMS states simply that eligible providers and suppliers will need to decide if the difference between the amount that Medicare will pay under the model and the price that they must pay to purchase the drugs would allow them to continue offering the drugs.

“It is unconscionable for CMS to shift the burden of lowering drug prices to physicians through this policy change instead of offering real reform proposals that would lower drug prices,” ASCO writes in its comment letter. “Physicians will have no option but to continue to pay U.S. market rates for acquisition, thus forcing them to either absorb these significant financial losses or curtail their ability to treat patients.”

According to ASCO’s internal modeling, if implemented, the MFN will drastically decrease allowable reimbursement rates for physician-provided drugs by 52% in 2024.

Disproportionate impact on cancer care – The MFN Model will disproportionately harm cancer care. Of the list of 50 MFN drugs, 38 are commonly prescribed by oncologists. This means that the burden of seeking care elsewhere and/or completely losing access to certain drugs will fall disproportionately on Medicare beneficiaries with cancer.

In addition, CMS estimates that most of the top 35 medical specialties that prescribe Part B drugs will, on average, see increases in add-on revenue through an alternative add-on payment. However, nine specialties – including five involving cancer care – will see a decrease in revenue. CMS estimates a decrease of between 6% and 33% per-dose per add-on payment for cancer care providers.

Overlap with the Oncology Care Model (OCM) – ASCO’s comments note that there is substantial overlap between the MFN Model and the OCM Model – an overlap that CMS acknowledges but fails to address in any meaningful way. As outlined in the MFN rule, OCM participants will receive reimbursement for drugs at the lower MFN rate, but CMS will continue to use the higher non-MFN drug rates when calculating OCM episode expenditures. This means that OCM participants will not receive credit for any drug savings they bring to the OCM through forced participation in the MFN Model.

Impact on 340B providers and patients – While CMS expects that 340B provider payments will see a 3% reduction compared to the current Medicare payment in 2022 and subsequent years, ASCO’s own analysis shows that 340B-purchased drugs could see decreased payment up to 50%. This dramatic payment reduction may also decrease Medicare beneficiary access to 340B providers, which runs counter to the program’s goal, which is to improve access to underserved patients.

Financial hardship exemption – In its comment letter, ASCO states that the financial hardship exemption in the MFN Model is “woefully inadequate.” Of the nearly 78,000 entities estimated to be subject to the MFN Model, CMS itself estimates that only 900 MFN participants will submit a request for a financial hardship exemption each performance year of the model. CMS attributes this low estimate to the fact that providers who have annual losses high enough to qualify for financial hardship may be insolvent and therefore unable to obtain hardship payments.

Increased administrative burden – ASCO is also concerned with the burden that the administrative costs associated with complying with MFN will have on cancer practices. Administrative costs may include adjusting purchasing arrangements; tracking units of MFN Model drugs that are paid under the MFN Model and excluded from manufacturers’ ASPs; recordkeeping requirements; and participating in site visits. Put in the context of a raging pandemic, these new administrative burdens will cause “immediate and acute financial hardship” to practices.

ASCO’s letter also outlined major concerns that the MFN exceeds CMS’ statutory authority, raises serious constitutional questions, and fails to follow required rulemaking procedures.

Read ASCO’s detailed comment letter to CMS.

Stay connected to ASCO in Action for updates on the MFN rule and other cancer policy issues.