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e-CFR data is current as of January 15, 2021

Title 42Chapter IVSubchapter H → Part 513


Title 42: Public Health


PART 513—MOST FAVORED NATION (MFN) MODEL


Contents

Subpart A—General Provisions

§513.1   Basis, scope, and duration.
§513.2   Definitions.

Subpart B—Inclusion in the Model

§513.100   MFN Model payments and MFN participants.
§513.120   MFN Model geographic area.
§513.130   MFN Model drugs, updates, categories and excluded drugs.
§513.140   Included international data.

Subpart C—Payment Process and Methodology

§513.200   Payment process and beneficiary cost-sharing.
§513.210   Model payment methodology for MFN Model drugs.
§513.220   Model alternative add-on payment.
§513.230   Financial hardship exemptions, request process, and reconciliation payment.

Subpart D [Reserved]

Subpart E—Quality Strategy, Beneficiary Protections, and Compliance Activities

§513.400   Quality measures.
§513.410   Beneficiary protections.
§513.420   Monitoring and compliance activities.
§513.430   Audits and record retention.
§513.440   Enforcement authority.
§513.450   Limitations on review.

Subpart F—Waivers

§513.500   Waivers of Medicare program requirements for purposes of testing the MFN Model.

Subparts G through J [Reserved]

Subpart K—Model Termination

§513.1000   Termination of the MFN Model.

Authority: 42 U.S.C. 1302, 1315(a), and 1395hh.

Source: 85 FR 76250, Nov. 27, 2010, unless otherwise noted.

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Subpart A—General Provisions

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§513.1   Basis, scope, and duration.

(a) Basis. This part implements the test of the Most Favored Nation (MFN) Model under section 1115A of the Act. Except as specifically noted in this part, the regulations under this part do not affect payment, coverage, program integrity, or any other requirements that otherwise apply to providers of services and suppliers under this chapter.

(b) Scope. This part sets forth the following:

(1) The types of providers and suppliers required to participate in the MFN Model and applicable requirements.

(2) The beneficiaries included in the MFN Model.

(3) The drugs included in the MFN Model.

(4) The methodologies for establishing Medicare payment amounts for and making payments for MFN Model drugs, including an alternative add-on payment.

(5) Beneficiary protections.

(6) Beneficiary cost-sharing.

(c) Duration. The MFN Model has a performance period of 7 performance years. The first performance year (performance year 1) begins on January 1, 2021, and the final performance year ends on December 31, 2027, unless sooner terminated in accordance with §513.1000.

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§513.2   Definitions.

For the purpose of this part the following definitions are applicable unless otherwise stated:

Add-on percentage means the percentage above 100 percent.

Alternative add-on payment means the payment described in §513.220.

Applicable ASP means the payment amount determined in accordance with section 1847A of the Act for a quarter minus the applicable add-on percentage.

ASP stands for average sales price.

ASP calendar quarter means the period that is two calendar quarters prior to the calendar quarter to which the MFN Drug Payment Amount will apply.

CCN stands for CMS Certification Number.

Country-level price means the unadjusted country-level price for an MFN Model drug at the HCPCS code level as calculated in accordance with §513.210(b)(2).

CPI-U stands for Consumer Price Index for All Urban Consumers based on all items in U.S. city average and not seasonally adjusted.

Days means calendar days.

DME stands for Durable Medical Equipment.

FDA stands for Food and Drug Administration.

GDP stands for gross domestic product.

GDP-adjusted country-level price means the country-level price adjusted by the GDP adjuster as calculated in accordance with §513.210(b)(4).

GDP adjuster means the country-specific adjuster as calculated in accordance with §513.210(b)(3).

HCPCS stands for Healthcare Common Procedure Coding System.

HCPCS code level means the specified drug and amount described in the HCPCS code long descriptor.

MAC stands for Medicare Administrative Contractor.

Manufacturer's average sales price has the same meaning as under 42 CFR Subpart J.

MFN stands for most favored nation.

MFN beneficiary means an individual who is furnished an MFN Model drug by an MFN participant and who, on the date of service, is enrolled in Medicare Part B, has Medicare as his or her primary payer, and is not covered under Medicare Advantage or any other group health plan, including a United Mine Workers of America health plan.

MFN Drug Payment Amount means the portion of the total allowed payment amount for an MFN Model drug determined in accordance with §513.210.

MFN Model drug means a separately payable Medicare Part B drug or biological described by a HCPCS code included on the MFN Model Drug HCPCS Codes List.

MFN Model Drug HCPCS Codes List means the list of drugs included in the MFN Model for a given calendar quarter of a performance year established under §513.130.

MFN participant means a Medicare participating provider or supplier, identified by its CCN or TIN, that is required to participate in the MFN Model in accordance with §513.100(b).

MFN Model Payment means the total payment to an MFN participant for an MFN Model drug in accordance with subpart C of this part, inclusive of the MFN Drug Payment Amount and the Alternative Add-on Payment.

MFN Price means the lowest GDP-adjusted country-level price of the countries specified in §513.140(b) for an MFN Model drug.

Model performance period means the 7-year period of time beginning on January 1, 2021, through December 31, 2027.

NOC stands for not otherwise classified.

OIG stands for the Department of Health and Human Services Office of Inspector General.

Outpatient prospective payment system (OPPS) means the payment system for designated hospital outpatient items and services and certain Medicare Part B services furnished to hospital inpatients when Part A payment cannot be made as defined by section 1833(t) of the Act.

Performance year means each 12-month period beginning on January 1 and ending on December 31 during the performance period for the MFN Model specified in §513.1(c).

Provider means a “provider of services” as defined under section 1861(u) of the Act and codified at §400.202 of this chapter.

Supplier means a supplier as defined in section 1861(d) of the Act and codified at §400.202 of this chapter.

TIN stands for taxpayer identification number.

WAC means wholesale acquisition cost as defined at section 1847A(c)(6)(B) of the Act.

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Subpart B—Inclusion in the Model

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§513.100   MFN Model payments and MFN participants.

(a) General. Subject to the exceptions specified in paragraph (d) of this section, the MFN Model payments specified under this part apply only to claims for an MFN Model drug furnished to an MFN beneficiary by an MFN participant.

(b) MFN participants. Subject to the exclusions specified in paragraph (c) of this section, the MFN Model requires participation by each Medicare participating provider and supplier that submits a claim (except for claims specified in paragraph (d) of this section) for a separately payable drug that is an MFN Model drug furnished to an MFN beneficiary.

(c) Excluded providers and suppliers. The following are excluded from participation in the MFN Model:

(1) Children's hospitals (defined under section 1886(d)(1)(B)(iii) of the Act).

(2) PPS-exempt cancer hospitals (defined under section 1886(d)(1)(B)(v) of the Act).

(3) Critical access hospitals (CAHs) (defined under section 1820 of the Act).

(4) Indian Health Service (IHS) facilities (as described in section 1880 of the Act)), except when MFN Model drugs are furnished and such service is described in section 1880(e)(2)(B) of the Act.

(5) Federally Qualified Health Centers (FQHCs) (defined under section 1861(aa)(4) of the Act).

(6) Rural Health Clinics (RHCs) (defined under section 1861(aa)(2) of the Act).

(7) Hospitals that are not subsection (d) hospitals (as defined in section 1886(d)(1)(B) of the Act) and are paid on the basis of reasonable costs subject to a ceiling under section 1886(b) of the Act.

(8) Extended neoplastic disease care hospitals (defined in section 1886(d)(1)(B)(vi) of the Act).

(9) For the first quarter and second quarter of performance year 1, acute care hospitals that participate in any model authorized under section 1115A of Act for which payment for outpatient hospital services furnished to Medicare FFS beneficiaries, including MFN Model drugs, is made under such model on a fully capitated or global budget basis under a waiver of section 1833(t) of the Act.

(10) Beginning with the third quarter of performance year 1, acute care hospitals that participate in any model authorized under section 1115A of Act for which payment for outpatient hospital services furnished to Medicare FFS beneficiaries, including MFN Model drugs, is made under such model on a fully capitated or global budget basis under a waiver of section 1833(t) of the Act, where the parameters of such model adjust for the difference in payment for MFN Model drugs between the MFN Model and non-MFN Model drug payments such that savings under the MFN Model are incorporated into the other CMS Innovation Center model's parameters (for example, the annual global budget) for the duration of the MFN Model.

(d) Exceptions. The MFN Model payments specified under this part do not apply to any of the following:

(1) Claims for MFN Model drugs furnished in the inpatient hospital setting under those circumstances where Part A would not pay for hospital services.

(2) Claims for MFN Model drugs administered during an inpatient hospital stay or included on an inpatient hospital claim.

(3) Claims administered by the DME MACs as described in §421.404(c)(2) of this chapter.

(4) Claims paid under the End-Stage Renal Disease Prospective Payment System, including claims paid using the transitional drug add-on payment adjustment.

(e) MFN participant requirements during the MFN Model. During the model performance period described in §513.1(c), MFN participants must do all of the following:

(1) Adhere to the beneficiary protections requirements under §513.410.

(2) Adhere to the MFN Model-specific billing instructions requirements established by CMS and the MAC responsible for processing the MFN participant's claims, including without limitation those described in §513.200.

(3) Participate in MFN Model monitoring and evaluation activities in accordance with §403.1110(b) of this chapter, including collecting and reporting information as the Secretary determines is necessary to monitor and evaluate the MFN Model, including without limitation “protected health information” as that term is defined at 45 CFR 160.103.

(f) MFN participant requirements after the MFN Model. For 2 years after termination of the MFN Model, MFN participants must participate in MFN Model monitoring activities as described in §513.420.

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§513.120   MFN Model geographic area.

The MFN Model geographic area is all states and U.S. territories.

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§513.130   MFN Model drugs, updates, categories and excluded drugs.

(a) MFN Model drugs. CMS creates and periodically updates the MFN Model Drug HCPCS Codes List as described in this section. The MFN Model Drug HCPCS Codes List designates the MFN Model drugs, which are subject to the MFN Model payments specified in subpart C of this part.

(1) Initial MFN Model Drug HCPCS Codes List. For the beginning of performance year 1, CMS identifies the top 50 drugs by HCPCS code with the highest aggregate 2019 Medicare Part B total allowed charges after making the exclusions specified in paragraphs (b)(1) and (b)(2) of this section, and adds the remaining HCPCS codes, after updating such HCPCS codes for any applicable changes, to the MFN Model Drug HCPCS Codes List. Final action claims with dates of service within calendar year 2019 and allowed charges greater than $0 are used to determine aggregate 2019 Medicare Part B total allowed charges.

(2) Annual Update of the MFN Model Drug HCPCS Codes List. For the start of each subsequent performance year, using Medicare Part B total allowed charge from the next subsequent calendar year, CMS identifies the top 50 drugs by HCPCS code with the highest aggregate Medicare Part B total allowed charges, after making the exclusions specified in paragraphs (b)(1) and (b)(2) of this section, for the most recent full calendar year, and adds any remaining HCPCS codes not already on the MFN Model Drug HCPCS Codes List to the MFN Model Drug HCPCS Codes List, after updating such HCPCS codes for any applicable changes, effective on the first day of the performance year.

(3) Removal. No more frequently than quarterly, CMS removes HCPCS codes from the MFN Model Drug HCPCS Codes List when CMS becomes aware that all of the National Drug Codes assigned to the HCPCS code have been permanently withdrawn from the U.S. market and the drug has been permanently withdrawn from the U.S. market, the specific HCPCS code included on the MFN Model Drug HCPCS Codes List is terminated with no replacement code available or planned, or an exclusion in paragraph (b)(1) of this section applies.

(4) Maintenance. No more frequently than quarterly, CMS revises HCPCS codes on the MFN Model Drug HCPCS Codes List as necessary to reflect quarterly HCPCS code updates that are applicable to the HCPCS codes on the MFN Model Drug HCPCS Codes List, including adding replacement codes for HCPCS codes that were terminated.

(b) Exclusions. (1) The following are excluded from the MFN Model:

(i) Vaccines specified in section 1861(s)(10) of the Act (influenza, pneumococcal pneumonia, coronavirus disease 2019 (COVID-19), and Hepatitis B vaccines).

(ii) Radiopharmaceuticals.

(iii) Oral anticancer chemotherapeutic agents described in section 1861(s)(2)(Q) of the Act.

(iv) Oral anti-emetic drugs described in 1861(s)(2)(T) of the Act.

(v) Oral immunosuppressive drugs described in section 1861(s)(2)(J) of the Act.

(vi) Compounded drugs.

(vii) Intravenous immune globulin products.

(viii) Drugs billed with HCPCS codes that describe a drug product that was approved under an abbreviated new drug application under section 505(j) of the Federal Food, Drug, and Cosmetic Act;

(ix) Drugs for which there is an Emergency Use Authorization (EUA) from FDA, or FDA approval, to treat patients with suspected or confirmed COVID-19; or

(x) Drugs billed using a not otherwise classified (NOC) or not otherwise specified (NOS) billing and payment code.

(2) The following claims are excluded from the determination of whether a drug is to be included on the MFN Model Drug HCPCS Codes List:

(i) Professional claims with a place of service code indicating a home setting, including home, homeless shelter, assisted living facility, group home, temporary lodging, and custodial care facilities.

(ii) Claims administered by the DME MACs as described in §421.404(c)(2) of this chapter.

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§513.140   Included international data.

(a) General. (1) CMS uses drug pricing information from international data sources, available to CMS at least 20 business days prior to the start of a calendar quarter, meeting the requirements in paragraph (c) of this section for MFN Model drugs from countries included in paragraph (b) of this section.

(2) For purposes of selecting a data source for each MFN Model drug for a calendar quarter, CMS identifies available international drug pricing information data sources for the MFN Model drug, by aligning the MFN Model drug's HCPCS code long description (including dosage form) with the data sources' standardized method for identifying scientific names or nonproprietary names and dosage formulations, as applicable.

(b) Non-U.S. member countries of the Organisation for Economic Co-operation and Development (OECD). (1) CMS uses available international sales, volume, and pricing data for countries that were non-U.S. OECD member countries as of October 1, 2020 with a GDP per capita that is at least 60 percent of the U.S. GDP per capita as determined by CMS in accordance with this paragraph (b).

(2) Each country's GDP per capita is assessed using data available at the end of the applicable ASP calendar quarter.

(3) Subject to the limitation specified in paragraph (b)(4) of this section, the GDP per capita for a country is the the most recent estimate of GDP per capita based on purchasing power parity for that country available in the U.S. Central Intelligence Agency (CIA) World Factbook.

(4) The country's GDP per capita and U.S. GDP per capita selected from the CIA World Factbook must be for the same year.

(5) CMS identifies countries with a GDP per capita that is at least 60 percent of the U.S. GDP per capita by dividing the GDP per capita for a country by the U.S. GDP per capita and assessing the results.

(c) Identification of international data sources. (1) CMS obtains data from one or more international drug pricing information data sources for purposes of identifying available international drug pricing information for the countries specified in paragraph (b) of this section.

(2) Such data sources must, as determined by CMS—

(i) Utilize a standardized method for identifying drugs across countries within that data source, such as using internationally recognized scientific and nonproprietary product names;

(ii) Utilize a standard method for identifying drug forms that at a minimum distinguishes among injectable, oral, and other forms of a drug; and

(iii) Be maintained by an organization that seeks to limit the lag inherent in data to no more than 180 days from the end of the calendar quarter for which drug pricing information is compiled to the time that the organization makes such updates available to users of the database.

(iv) Contains international drug pricing information stated in U.S. currency, such as the following:

(A) Sales data, which may be based on ex-manufacturer prices (sometimes called ex-factory prices) that represent actual or calculated prices paid to the manufacturer by wholesalers and other distributors, or retail prices that represent actual or calculated sales for retail purchasers, or prices paid by other purchasers in the distribution channels.

(B) Volume data (for example, number of packages or units sold).

(C) List prices.

(v) Have mechanisms in place to maintain, update, and correct, if necessary, the information on international drug pricing in the data source on at least a quarterly basis.

(3) For each MFN Model drug for a calendar quarter, CMS selects a data source using the following hierarchy.

(i) The data source contains sales and volume data for the applicable ASP calendar quarter from at least one country described in paragraph (b) of this section.

(ii) The data source does not have sales and volume data for the applicable ASP calendar quarter, but contains sales and volume data for any prior ASP calendar quarter beginning on or after October 1, 2019 from at least one country described in paragraph (b) of this section. If sales and volume data from a prior ASP calendar quarter are used, CMS uses sales and volume data from the most recent ASP calendar quarter for which both sales and volume data are available.

(iii) The extracted data used by CMS to determine the most recent MFN Price used to calculate an MFN Drug Payment Amount posted on the MFN Model website.

(iv) The data source contains ex-manufacturer price data for the applicable ASP calendar quarter from at least one country described in paragraph (b) of this section.

(v) The data source contains list price data for the applicable ASP calendar quarter from at least one country described in paragraph (b) of this section.

(vi) If there is more than one data source for an ASP calendar quarter, for each MFN Model drug, CMS selects the data source at the highest level of the hierarchy that contains information from the highest number of countries described in paragraph (b) of this section and, if available, incorporates discounts and rebates into its drug pricing information, and uses this data source to calculate the MFN Price as described in §513.210(b).

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Subpart C—Payment Process and Methodology

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§513.200   Payment process and beneficiary cost-sharing.

(a) General. For purposes of the MFN Model, the allowed MFN Drug Payment Amount does not exceed the billed amount on the claim for the MFN Model drug.

(b) Model-specific billing instructions. MFN participants submit claims for MFN Model drugs to the applicable MAC in the form and manner specified by CMS in model-specific billing instructions.

(c) Beneficiary cost-sharing. Beneficiary coinsurance does not apply to the portion of the allowed payment amount for an MFN Model drug that is determined under §513.220.

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§513.210   Model payment methodology for MFN Model drugs.

(a) Payment amount. The total allowed payment amount for an MFN Model drug furnished to an MFN beneficiary by an MFN participant on a given date of service within a calendar quarter is determined in accordance with this section. The total allowed payment equals—

(1) For each billing unit in the HCPCS code descriptor of the MFN Model drug, the MFN Drug Payment Amount determined in accordance with paragraphs (b), (c) and (d) of this section, as applicable, where the allowed MFN Drug Payment Amount does not exceed the billed amount on the claim for the MFN Model drug as described in §513.200(a); and

(2) The alternative add-on payment determined under §513.220.

(b) Calculation of the MFN Drug Payment Amount with Available International Drug Pricing Data. CMS selects an available international drug pricing information data source described in §513.140(c) for at least one country specified in §513.140(b) for an MFN Model drug, and calculates, in advance of each calendar quarter for a performance year, the applicable MFN Drug Payment Amount for one billing unit of an MFN Model drug using the following steps:

(1) Available international drug pricing data. (i) For the MFN Model drug, using the data source selected in accordance with §513.140(c)(3) (except for a data source described in §513.140(c)(3)(iii)), CMS identifies available international drug pricing data for the MFN Model drug, by aligning the MFN Model drug's HCPCS code long description (including dosage form) with the data sources' standardized method for identifying scientific names or nonproprietary names and dosage formulations, as applicable. CMS extracts available drug pricing data for the countries specified in §513.140(b) from the selected international drug pricing information data source. CMS uses the extracted data that have complete package size information and only for dosage formulations that could be described by the MFN Model drug's HCPCS code descriptor, as determined by CMS. If a data source described in §513.140(c)(3)(iii) is selected, CMS uses such extracted data.

(ii) When international drug pricing data with sales and volume data are available, CMS excludes from the calculation of the unadjusted country-level price under paragraph (b)(2) of this section international drug pricing data without both sales and volume data, with less than $1,000 in quarterly sales (expressed as U.S. currency), or with less than 1,000 units in quarterly volume.

(iii) CMS converts the extracted volume data to the MFN Model drug's HCPCS code billing unit level, as applicable.

(iv) CMS adjusts the extracted volume data, as applicable, before converting the extracted volume data to the MFN Model drug's HCPCS code billing unit level when the data source shows the package size of a drug product that is inconsistent with the manufacturer's information about that product, as determined by CMS.

(v) CMS limits the number of HCPCS code billing units when—

(A) The package labeling indicates a limited amount of drug is to be used from the package; and

(B) The HCPCS code dosage is per dose.

(2) Calculate the unadjusted country-level price for the MFN Model drug by country.

(i) Using the drug pricing data extracted and adjusted in accordance with paragraph (b)(1) of this section, CMS calculates the unadjusted country-level price for the MFN Model drug by country, using the calculation that is applicable.

(ii) If an international drug pricing information data source with sales and volume data is used, the applicable calculation is as follows:

(A) CMS sums the adjusted volume data (as specified in paragraph (b)(1)(iii) of this section) for the drug.

(B) CMS sums the total sales for the drug (that remain after performing the exclusions in paragraph (b)(1)(ii) of this section).

(C) CMS divides the sum determined in paragraph (b)(2)(ii)(B) of the section by the sum determined in paragraph (b)(2)(ii)(A) of this section, resulting in an average price per unit of drug, where the unit of drug is the same as the HCPCS code billing unit.

(iii) If an international drug pricing information data source with ex-manufacturer or list prices is used, the applicable calculation is as follows:

(A) For each extracted ex-manufacturer or list price, CMS calculates the number of HCPCS billing units in the package by dividing the amount of drug in the package by the amount of drug represented in one HCPCS billing unit.

(B) CMS divides the ex-manufacturer or list price, as applicable, by the number of HCPCS billing units in the package, resulting in a price per unit of drug where the unit of drug is the same as the HCPCS code billing unit.

(C) CMS sums the price per unit of drug calculated in paragraph (c)(3)(iii)(B) of this section.

(D) CMS divides the sum calculated in paragraph (c)(3)(iii)(C) of this section by the number of ex-manufacturer or list prices that were summed in paragraph (c)(3)(iii)(C) of this section, resulting in an average price per unit of drug where the unit of drug is the same as the HCPCS code billing unit.

(iv) CMS performs the applicable calculation for each country specified in §513.140(b) for which international drug pricing information is available in the selected data source.

(3) Calculate the GDP adjuster for each country. (i) CMS calculates the GDP adjuster by dividing the country's GDP per capita by the U.S. GDP per capita for the same year.

(ii) In cases where the resulting ratio exceeds 1.0, the GDP adjuster is set to 1.0.

(iii) Subject to the limitations specified in paragraph (b)(3)(iv) of this section, the GDP per capita for a country is the most recent estimate of GDP per capita based on purchasing power parity for that country available in the CIA World Factbook at the end of the applicable ASP calendar quarter.

(iv) Limitations. (A) The country's GDP per capita and U.S. GDP per capita must be for the same year.

(B) The GDP per capita used must be for the same year as the data used to calculate the unadjusted country-level price, if available, or the most recent earlier year available.

(4) Apply the GDP adjuster to calculate the GDP-adjusted country-level price. CMS applies the applicable GDP adjuster identified in paragraph (b)(3) of this section to each unadjusted country-level price identified in paragraph (b)(2) of this section to calculate the GDP-adjusted country-level price by dividing each unadjusted country-level price by the applicable GDP adjuster.

(5) Identify the lowest GDP-adjusted country-level price. CMS identifies the lowest GDP-adjusted country-level price for the MFN Model drug. Except as provided in paragraph (b)(7) of this section, the price identified is the MFN Model drug's MFN Price.

(6) Identify Applicable ASP. CMS identifies the applicable ASP for the applicable quarter.

(7) Compare the MFN Price to the applicable ASP. CMS compares the price determined in paragraph (b)(5) of this section to the applicable ASP identified in paragraph (b)(6) of this section. The MFN Price equals the applicable ASP if the applicable ASP is less than the price determined in paragraph (b)(5) of this section.

(8) Phase-in. CMS identifies the applicable phase-in formula based on the applicable performance year as follows:

(i) Performance year 1: 75 percent applicable ASP and 25 percent MFN Price.

(ii) Performance year 2: 50 percent applicable ASP and 50 percent MFN Price.

(iii) Performance year 3: 25 percent applicable ASP and 75 percent MFN Price.

(iv) Performance year 4: 100 percent MFN Price.

(v) Performance year 5: 100 percent MFN Price.

(vi) Performance year 6: 100 percent MFN Price.

(vii) Performance year 7: 100 percent MFN Price.

(9) Final calculation steps. (i) CMS applies the applicable phase-in formula to the applicable ASP and the MFN Price. Subject to any applicable adjustments as provided in paragraph (d) of this section, the amount determined in this paragraph is the MFN Drug Payment Amount.

(ii) Subject to the limitation in paragraph (b)(iii) in this section, CMS recalculates the MFN Drug Payment Amounts for prior quarters when revised international drug pricing information is available in the data source that was used to calculate the MFN Price and applicable ASP updates are available from CMS. CMS prospectively applies the recalculations in the quarterly update following the availability of revised international drug pricing information and ASP updates.

(iii) MFN Drug Payment Amounts may be recalculated for the prior four calendar quarters of the model.

(c) Frequency of MFN Drug Payment Amount updates. CMS updates the MFN Drug Payment Amounts on a calendar quarter basis. CMS publishes the quarterly MFN Drug Payment Amounts on the MFN Model website in advance of the calendar quarter in which the MFN Drug Payment Amounts apply, along with any recalculated MFN Drug Payment Amounts for prior quarters.

(d) Exceptions. (1) Payment for MFN Model drugs for which no international drug pricing data are available. If, as of the first calendar quarter during which an MFN Model drug has been included in the MFN Model Drug HCPCS Codes List in accordance with §513.130, no international sales, volume or pricing information meeting the requirements described in §513.140(c)—including data used by CMS to determine the most recent MFN Price used to calculate an MFN Drug Payment Amount posted on the MFN Model website—is available from any country described in §513.120(b) for any calendar quarter beginning on or after October 1, 2019 through the applicable quarter, the MFN Drug Payment Amount is the applicable ASP.

(2) Payment for MFN Model drugs that are in short supply. If an MFN Model drug is reported as “Currently in Shortage” by FDA, beginning with the first day of the next calendar quarter after the date on which it is reported in shortage, the MFN Drug Payment Amount is the applicable ASP. CMS calculates payment in accordance with paragraph (b) of this section as of the first day of the calendar quarter after the date upon which the drug is no longer reported as “Currently in Shortage” by FDA.

(3) Adjustment to phase-in formula. (i) CMS accelerates the phase-in of the MFN Price by 5 percentage points at the next quarterly update to calculate the MFN Drug Payment Amount for the MFN Model drug where both of the following conditions are met:

(A) There is a greater cumulative percentage increase in either the applicable ASP or any of the monthly U.S. list prices for the NDCs assigned to the MFN Model drug's HCPCS code compared to the cumulative percentage increase in the CPI-U.

(B) There is a greater cumulative percentage increase in either the applicable ASP or any of the monthly U.S. list prices for the NDCs assigned to the MFN Model drug's HCPCS code compared to the cumulative percentage increase in the MFN Price.

(C) For purposes of paragraphs (d)(3)(i)(A) and (B) of this section, the cumulative percentage increase means the cumulative percentage change from the end of the baseline to the end of the applicable ASP calendar quarter.

(D) The baseline in paragraph (d)(3)(i)(C) of this section for an MFN Model drug is the ASP calendar quarter for the applicable ASP for the first quarter of performance year 1. If there is not an applicable ASP for the first quarter of performance year 1 for an MFN Model drug, the baseline for that MFN Model drug is the ASP calendar quarter for the first applicable ASP based on the manufacturer's average sales price for that MFN Model drug that occurs after the ASP calendar quarter for the applicable ASP for the first quarter of performance year 1.

(ii) For purposes of paragraph (d)(3)(i) of this section, if the cumulative percentage increase in CPI-U or MFN Price is negative, CMS uses zero as the cumulative percentage increase in      CPI-U or MFN Price, as applicable.

(iii) The application of an acceleration of the phase-in formula continues for the duration of the model performance period.

(iv) CMS applies an additional acceleration of the phase-in formula for each calendar quarter where the conditions specified in paragraph (i) are met.

(4) Adjustment for rapid increases in the applicable ASP or any monthly U.S. list prices beyond inflation and MFN Price after the full phase-in of the MFN Price. If the conditions described in paragraphs (d)(3)(i)(A) and (B) of this section are met after the full phase-in of the MFN Price for an MFN Model drug, for each calendar quarter thereafter, CMS decreases the MFN Drug Payment Amount equal to largest difference in the cumulative percentage increase in the applicable ASP or any of the monthly U.S. list prices for the NDCs assigned to the MFN Model drug's HCPCS code compared to the cumulative percentage increase in the CPI-U and in the MFN Price, respectively, determined quarterly.

(5) Limitation on MFN Drug Payment Amount. The MFN Drug Payment Amount cannot exceed the non-model drug payment amount for claim lines submitted with the JG modifier (or any successor modifier used to identify drugs purchased under the 340B program) after removing any add-on amount, if applicable.

(e) Blood clotting factor furnishing fee. When applicable, the blood clotting furnishing fee under §410.63(c) of this chapter is payable along with the MFN Drug Payment Amount.

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§513.220   Model alternative add-on payment.

(a) Payment amount. (1) The total allowed alternative add-on payment amount for a separately payable dose of an MFN Model drug furnished to an MFN beneficiary by an MFN participant on a given date of service within a calendar quarter is determined in accordance with this section.

(2) The total allowed alternative add-on payment amount for a claim line does not exceed the billed amount on that claim line.

(b) Calculation of the per-dose alternative add-on payment amount. CMS calculates the per-dose alternative add-on payment for performance year 1, quarter 1 for MFN Model drugs using the following steps:

(1) CMS identifies available Medicare Part B fee-for-service final action claims lines, with dates of service in 2019, for drugs on the initial MFN Model HCPCS Codes List described in §513.130(a)(1), excluding claims for providers and suppliers specified in §513.100(c), and claims specified in §513.100(d), that were furnished by Medicare-participating providers and suppliers, have a separately paid allowed charge greater than $0, and for which Medicare Part B was the primary payer. If a HCPCS code on the initial MFN Model HCPCS Codes List was not in use during any calendar quarter in 2019, CMS uses the HCPCS code that was applicable for the MFN Model drug during 2019.

(2) CMS identifies the applicable ASP for each calendar quarter of 2019 for the drugs (by HCPCS code as specified in paragraph (b)(1) of this section) included on the initial MFN Model HCPCS Codes List. In the case of a biosimilar biological product, the applicable ASP for the reference biological product is identified and used in paragraph (b)(3) of this section.

(3) CMS multiplies the number of units billed for each claim line described in paragraph (b)(1) of this section by 6.1224 percent of the applicable ASP identified in paragraph (b)(2) of this section for the HCPCS code on the claim line and date of service.

(4) CMS sums the products calculated in paragraph (b)(3) of this section for all claim lines for each MFN Model drug to calculate the total add-on spending amount for each MFN Model drug.

(5) CMS sums the amounts calculated in paragraph (b)(4) of this section to calculate the total pooled add-on spending amount for all MFN Model drugs.

(6) CMS divides the amount calculated in paragraph (b)(5) of this section by the total number of claim lines retained in paragraph (b)(1) of this section, excluding claim lines billed with the JW modifier.

(7) CMS trends the amount calculated in paragraph (b)(6) of this section forward to the applicable ASP calendar quarter for quarter 1 of performance year 1 using the percentage change in CPI-U from July 2019 through October 2020.

(c) Frequency of alternative add-on payment amount updates. For each calendar quarter after quarter 1 of performance year 1, CMS updates the alternative add-on payment by applying a cumulative inflation factor based on the cumulative percentage change in CPI-U from October 2020 through the first month of the prior calendar quarter. If the cumulative percentage change in the CPI-U is negative, CMS uses an inflation factor of 1.

(d) Limitation on the alternative add-on payment. The alternate add-on payment is not payable for claim lines billed—

(1) With the JW modifier; or

(2) By MFN participants that receive an alternative add-on payment for an MFN Model drug under any other model authorized by section 1115A of the Act that tests an alternative approach to the add-on portion of payment for Medicare Part B drugs.

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§513.230   Financial hardship exemptions, request process, and reconciliation payment.

(a) General. For purposes of the MFN Model, a financial hardship exemption for a performance year may be granted to an MFN participant by CMS, in its sole discretion and not subject to appeal, when the provisions in this section are met.

(b) Request for financial hardship exemption. To be eligible for a financial hardship exemption, the MFN participant must submit a request for financial hardship exemption in the form and manner and with the content specified by CMS, including without limitation the requirements of this paragraph (b).

(1) Timing and form of request. The MFN participant must submit its request for a financial hardship exemption to CMS in accordance the submission process posted on the MFN Model website and such request must be submitted within 60 calendar days following the end of the performance year for which the MFN participant seeks a financial hardship exemption.

(2) Request content. The MFN participant's request a financial hardship exemption must include, at a minimum, all of the following:

(i) Evidence of methods used to obtain each MFN Model drug that was furnished by the MFN participant during the performance year to any patient.

(ii) Average net acquisition cost for each MFN Model drug (inclusive of all on- and off-invoice discounts or adjustments, and any other price concessions related to the purchase of the MFN Model drug) that was furnished by the MFN participant during the performance year to MFN beneficiaries.

(iii) Average net acquisition cost for each MFN Model drug (inclusive of all on- and off-invoice discounts and adjustments, and any other price concessions related to the purchase of the MFN Model drug) that was furnished by the MFN participant during the performance year to patients who were not MFN beneficiaries.

(iv) Statement of any remuneration received by the MFN participant from manufacturers of MFN Model drugs, wholesalers, and distributors that is not reflected in the MFN participant's average net acquisition costs with a justification of why such remuneration should not be treated as a price concession related to the purchase of an MFN Model drug.

(v) Administrative information, including: MFN participant's name, TIN or CCN (as applicable), contact name, phone number, and email address.

(vi) The MFN participant's attestation that:

(A) The MFN participant experienced a reduction in Medicare Part B FFS payments for separately payable drugs on a per beneficiary basis during the performance year as compared to the prior year (that is, the four calendar quarters immediately preceding the performance year) due to its inability to obtain one or more of the MFN Model drugs at or below the MFN Model Payments for such drugs during the performance year;

(B) The MFN participant has not received and will not receive any remuneration from manufacturers of MFN Model drugs, wholesalers, and distributors related to the purchase of an MFN Model drug that was furnished by the MFN participant during the performance year that is not reflected in the MFN participant's submission; and

(C) The MFN participant submission is true, accurate and complete.

(c) Standard of review. (1) Incomplete requests for a financial hardship exemption, as determined by CMS, are not reviewed.

(2) CMS grants a financial hardship exemption to an MFN participant for a performance year, if the agency in its sole discretion determines the following requirements have been met:

(i) The MFN participant submits a timely, complete request for financial hardship exemption in accordance with the requirements of this section which in the sole discretion of CMS demonstrates all of the following:

(A) The MFN participant exhausted all reasonable methods to obtain MFN Model drugs at or below the MFN Model Payment for such drugs during the performance year.

(B) The MFN participant's average net acquisition cost for each MFN Model drug (including invoices and off-invoice discounts or adjustments) that was furnished by the MFN participant during the performance year to patients who were not MFN beneficiaries was not less than the MFN participant's average net acquisition costs for such MFN Model drug (including invoices and off-invoice discounts or adjustments) that was furnished by the MFN participant during the performance year to MFN beneficiaries.

(C) Any remuneration the MFN participant received from manufacturers of MFN Model drugs, wholesalers, and distributors that was not reflected in the MFN participant's average net acquisition costs was not a price concession related to the purchase of an MFN Model drug.

(ii) The MFN participant's excess reduction amount per beneficiary (as determined in paragraph (d)(6) of this section), is greater than zero.

(d) Excess reduction amount per beneficiary. CMS calculates the MFN participant's excess reduction amount per beneficiary using available final action claims data where Medicare was the primary payer that is estimated to be more than 90 percent complete in accordance with the following steps:

(1) CMS calculates, separately for dates of service within the performance year and prior year, the MFN participant's total allowed charges for separately payable Medicare Part B drugs, and the total number of beneficiaries that had at least one claim for a service furnished by the MFN participant with a Medicare Part A or Medicare Part B allowed charge greater than $0.

(2) CMS divides the MFN participant's total allowed charges for separately payable Medicare Part B drugs for dates of service within the performance year by the total number of beneficiaries that had at least one claim for a service furnished by the MFN participant with a Medicare Part A or Medicare Part B allowed charge greater than $0 with a service date within the performance year, to calculate the MFN participant's average per beneficiary total allowed charges for separately payable Medicare Part B drugs for the performance year.

(3) CMS divides the MFN participant's total allowed charges for separately payable Medicare Part B drugs for dates of service within the prior year by the total number of beneficiaries that had at least one claim for a service furnished by the MFN participant with a Medicare Part A or Medicare Part B allowed charge greater than $0 with a service date within the prior year, to calculate the MFN participant's average per beneficiary total allowed charges for separately payable Medicare Part B drugs for the prior year.

(4) CMS subtracts the MFN participant's average per beneficiary total allowed charges for separately payable Medicare Part B drugs for the performance year (as calculated in paragraph (d)(2) of this section) from the MFN participant's average per beneficiary total allowed charges for separately payable Medicare Part B drugs for the prior year (as calculated in paragraph (d)(3) of this section).

(5) CMS calculates 25 percent of the MFN participant's total allowed charges for all Medicare Part A and Part B claims with dates of service within the prior year and divides that amount by the total number of beneficiaries that had at least one claim for a service furnished by the MFN participant with a Medicare Part A or Medicare Part B allowed charge greater than $0 with a service date within the prior year, to calculate 25 percent of the MFN participant's average per beneficiary total allowed charges for all Medicare Part A and Part B claims with dates of service within the prior year.

(6) CMS subtracts 25 percent of the MFN participant's average per beneficiary total allowed charges for all Medicare Part A and Part B claims with dates of service within the prior year (as calculated in paragraph (d)(5) of this section) from the difference calculated in paragraph (d)(4) of this section, to calculate the MFN participant's excess reduction amount per beneficiary.

(e) Reconciliation payment. (1) If CMS in its sole discretion grants a financial hardship exemption to an MFN participant for a performance year, CMS provides such MFN participant a reconciliation payment for the performance year that equals the amount calculated by multiplying the excess reduction amount per beneficiary specified in paragraph (d)(6) of this section by the total number of beneficiaries that had at least one claim for a service furnished by the MFN participant with a Medicare Part A or Medicare Part B allowed charge greater than $0 with a service date within the performance year.

(2) The amount of a reconciliation payment provided in accordance with this section is—

(i) Not subject to appeal;

(ii) Not subject to beneficiary cost-sharing, including any deductible or coinsurance; and

(iii) Made by CMS (or a CMS contractor) as soon as practical.

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Subpart D [Reserved]

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Subpart E—Quality Strategy, Beneficiary Protections, and Compliance Activities

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§513.400   Quality measures.

(a) General. Quality measures do not adjust model payments to MFN participants and are used for monitoring purposes.

(b) Collection of quality measures. (1) CMS administers a patient experience survey to a sample of beneficiaries who receive an MFN Model drug. A sample of non-MFN beneficiaries may also be surveyed.

(2) If during the MFN Model CMS determines that the quality measures specified in paragraph (b) of this section are not sufficient to adequately monitor the quality of care that MFN beneficiaries are receiving from MFN participants or that MFN participants are providing, CMS may specify additional measures. CMS applies the following criteria when specifying additional quality measures:

(i) Additional measures are among one or more of the following categories:

(A) Patient experience of care.

(B) Patient activation

(C) Shared decision making.

(D) Adherence.

(E) Utilization.

(F) Process measures.

(ii) Additional measures will not add significant burden to MFN participants or beneficiaries.

(iii) Additional measures utilize an instrument that CMS has used previously in a model to adjust payment or for monitoring or evaluation.

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§513.410   Beneficiary protections.

(a) Beneficiary choice.

(1) MFN participants must not restrict beneficiaries' ability to choose to receive care from any Medicare participating provider or supplier or any provider or supplier who has opted out of Medicare.

(2) The MFN participant must not commit any act or omission, nor adopt any policy that inhibits a beneficiary from exercising his or her freedom to choose to receive care from any Medicare participating provider or supplier or any provider or supplier who has opted out of Medicare. Notwithstanding the foregoing, MFN participants may communicate to beneficiaries the benefits of receiving care from an MFN participant, if otherwise consistent with the requirements of this part and applicable law.

(b) Appeals. An MFN beneficiary and his or her assignees retain their right to appeal claims in accordance with part 405 subpart I of this chapter.

(c) Availability of services. MFN participants must not take any action to select or avoid treating beneficiaries based on their diagnoses, care needs, income levels or other factors that would render the beneficiary an “at-risk beneficiary” as defined at §425.20 of this chapter.

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§513.420   Monitoring and compliance activities.

(a) Compliance with laws. (1) Agreement to comply. The MFN participant must comply with all applicable laws and regulations.

(2) Notification. The MFN participant must notify CMS within 15 days after becoming aware that the MFN participant is under investigation or has been sanctioned by the federal, state, or local government, or any licensing authority (including, without limitation, the imposition of program exclusion, debarment, civil monetary penalties, corrective action plans, and revocation of Medicare billing privileges).

(b) CMS monitoring and compliance activities. (1) CMS conducts monitoring activities to ensure compliance by MFN participants with the terms of the MFN Model, to obtain timely information about the effects of the MFN Model on MFN beneficiaries, providers, suppliers, and on the Medicare program and to facilitate real time identification and response to potential issues. Such monitoring activities may include, without limitation, the following:

(i) Documentation requests sent to the MFN participant including, without limitation, surveys and questionnaires.

(ii) Audits of claims data, medical records, and other data from the MFN participant.

(iii) Interviews with any individual or entity participating in the MFN Model including members of the MFN participant's leadership, management, and staff.

(iv) Interviews with beneficiaries and their caregivers.

(v) Site visits to the MFN participants, performed in a manner consistent with §513.420(c).

(vi) Tracking patient complaints and appeals.

(2) In conducting monitoring and oversight activities, CMS or its designees may use any relevant data or information including without limitation, all Medicare claims submitted for items or services furnished to beneficiaries in the MFN Model.

(3) The MFN participant must cooperate with evaluation and monitoring activities as may be necessary to enable CMS to evaluate the MFN Model in accordance with section 1115A(b)(4) of the Act and to conduct monitoring activities under this section.

(c) Site visits. (1) To the extent practicable, CMS or its designee provides the MFN participant with no less than 15 days advance notice of any site visit. To the extent practicable, CMS attempts to accommodate a request for particular dates in scheduling site visits. However, the MFN participant may not request a date that is more than 60 days after the date of the initial site visit notice from CMS.

(2) The MFN participant must ensure that personnel with the appropriate responsibilities and knowledge associated with the purpose of the site visit are available during all site visits.

(3) Notwithstanding the foregoing, CMS may perform unannounced site visits at all physical locations of the MFN participant at any time to investigate concerns about the health or safety of beneficiaries or other patients or other program integrity issues.

(4) Nothing in this part must be construed to limit or otherwise prevent CMS from performing site visits permitted or required by applicable law.

(d) Right to correct. If CMS discovers that it has made or received an incorrect model-specific payment under the terms of the MFN Model, CMS may make payment to, or demand payment from, the MFN participant.

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§513.430   Audits and record retention.

(a) Right to audit. The Federal Government, including CMS, HHS, and the Comptroller General, or their designees, has the right to audit, inspect, investigate, and evaluate any documents and other evidence regarding implementation of the MFN Model.

(b) Access to records. MFN participants must maintain and give the Federal Government, including CMS, HHS, and the Comptroller General, or their designees, access to all such documents and other evidence sufficient to enable the audit, evaluation, inspection, or investigation of the implementation of the MFN Model, including without limitation, documents and other evidence regarding the following:

(1) The MFN participant's compliance with the terms of the MFN Model, including this subpart.

(2) Quality measure information and the quality of services performed under the terms of the MFN Model, including this subpart.

(3) Patient safety.

(4) The accuracy of model-specific payments made under the MFN Model.

(5) Utilization of items and services furnished under the MFN Model.

(6) Other program integrity issues.

(c) Record retention. The MFN participant must maintain the documents and other evidence described in paragraph (b) of this section and other evidence for a period of 6 years from the last payment received by the MFN participant under the MFN Model or from the date of completion of any audit, evaluation, inspection, or investigation, whichever is later, unless—

(1) CMS determines there is a special need to retain a particular record or group of records for a longer period and notifies the MFN participant at least 30 days before the normal disposition date; or

(2) There has been a termination, dispute, or allegation of fraud or similar fault against the MFN participant, in which case the records must be maintained for an additional 6 years from the date of any resulting final resolution of the termination, dispute, or allegation of fraud or similar fault.

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§513.440   Enforcement authority.

(a) Remedial action—(1) Grounds for remedial action. In addition to any other grounds for remedial action that are permitted under the terms of this part, CMS may take one or more of the remedial actions set forth in paragraph (a)(2) of this section if CMS determines, in CMS' sole discretion, that an MFN participant:

(i) Has failed to comply with any applicable Medicare program requirement, rule, or regulation.

(ii) Has failed to comply with any of the terms of the MFN Model, including applicable requirements of this part.

(iii) Has systematically engaged in the under delivery or over delivery of an MFN Model drug.

(iv) Has taken any action that threatens the health or safety of an MFN beneficiary or other patient.

(v) Has undergone a change of control that presents a program integrity risk.

(vi) Has submitted false data or made false representations, warranties, certifications or attestations in connection with any aspect of the MFN Model.

(vii) Has avoided at-risk beneficiaries, as this term is defined in §425.20 of this chapter.

(viii) Has avoided patients on the basis of payer status.

(ix) Is subject to sanctions or final actions of an accrediting organization or Federal, State, or local government agency.

(x) Takes any action that CMS determines for program integrity reasons is not in the best interests of the MFN Model or the Medicare program, or fails to take any action that CMS determines for program integrity reasons should have been taken to further the best interests of the MFN Model or Medicare program.

(xi) Is subject to investigation by HHS (including the HHS Office of Inspector General (OIG)) or the Department of Justice due to an allegation of fraud or significant misconduct, including being subject to the filing of a complaint, filing of a criminal charge, being subject to an indictment, being named as a defendant in a False Claims Act qui tam matter in which the Federal Government has intervened, or similar action;

(xii) Is the subject of administration enforcement action imposed by CMS; or

(xiii) Has failed to demonstrate improved performance following any remedial action imposed under this section.

(2) Taking remedial actions. If CMS determines that one or more grounds for remedial action described in paragraph (a)(1) of this section exist, CMS make take one or more of the following remedial actions:

(i) Notifying the MFN participant of the violation.

(ii) Requiring the MFN participant to provide additional information to CMS or its designees.

(iii) Requiring the MFN participant to develop and implement a corrective action plan in a form and manner and by a deadline specified by CMS.

(iv) Subjecting the MFN participant to additional monitoring, auditing, or both.

(v) Removing the MFN participant from the MFN Model.

(vi) Recouping model-specific payments.

(vii) Other action as may be permitted under the terms of this part.

(b) OIG authority. Nothing contained in the terms of the MFN Model or this part limits or restricts the authority of the HHS Office of Inspector General or any other Federal Government authority or agency, including its authority to audit, evaluate, investigate, or inspect model participant for violations of any statutes, rules, or regulations administered by the Federal Government.

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§513.450   Limitations on review.

There is no administrative or judicial review under sections 1869 or 1878 of the Act or otherwise for any of the following:

(a) The selection of models for testing or expansion under section 1115A of the Act.

(b) The selection of organizations, sites, or participants, including MFN participants, to test the MFN Model, including a decision by CMS to remove an MFN participant from the MFN Model.

(c) The elements, parameters, scope, and duration of such MFN Model for testing or dissemination, including without limitation all of the following:

(1) The selection of the model geographic area for the MFN Model by CMS.

(2) The selection of MFN Model drugs by CMS.

(3) The selection of included international data, including selection of countries, international drug pricing databases, and international drug pricing data.

(d) Determinations regarding budget neutrality under section 1115A(b)(3) of the Act.

(e) The termination or modification of the design and implementation of an MFN Model under section 1115A(b)(3)(B) of the Act.

(f) Determinations about expansion of the duration and scope of the MFN Model under section 1115A(c) of the Act, including the determination that the MFN Model is not expected to meet criteria described in paragraphs (c)(1) or (2) of such section.

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Subpart F—Waivers

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§513.500   Waivers of Medicare program requirements for purposes of testing the MFN Model.

CMS waives the Medicare program requirements in the following provisions that are necessary solely for purposes of testing the MFN Model:

(a) Sections 1833(t)(6) and 1833(t)(14) of the Act and §§419.62 and 419.64 of this chapter related to Medicare payment amounts for drugs and biologicals under the hospital outpatient prospective payment system (OPPS) as necessary to permit testing of an alternative payment amount for MFN Model drugs.

(b) Section 1833(i)(2)(D) of the Act related to Medicare payment to ASCs for drugs and biologicals as necessary to permit testing of an alternative payment amount for MFN Model drugs.

(c) Sections 1847A(b) and 1847A(c) of the Act and §§414.904 and 414.802 of this chapter related to use of the ASP-based, WAC-based, or other applicable payment methodology and calculation of manufacturers' ASP as necessary to permit testing of an alternative payment for MFN Model drugs and to exclude certain units of MFN Model drugs from manufacturers' ASPs.

(d) Section 1833(a)(1) of the Act related to Medicare payment portion of the allowed payment amount for an included MFN Model drug that is determined under §513.220 as necessary to permit testing of an innovative payment approach for the alternative add-on payment amount.

(e) Section 1833(a)(1)(S) of the Act related to Medicare payment for drugs and biologicals is 80 percent of the lesser of the actual charge or the payment amount established in section 1842(o) of the Act as necessary to permit testing of an innovative payment approach for the total allowable MFN Model payment as determined under subpart C.

(f) Section 1833(a)(1)(G) of the Act related to the amounts paid with respect to facility services furnished in connection with certain surgical procedures and with respect to services furnished to an individual in an ASC must be 80 percent of the lesser of the actual charge for the services or the amount determined by the Secretary under such revised payment system as necessary to permit testing of an innovative payment approach for the total allowable MFN Model payment as determined under subpart C.

(g) Section 1833(t) of the Act related to how beneficiary copayment is calculated under the OPPS as necessary to permit testing of an innovative payment approach for the total allowable MFN Model payment as determined under subpart C of this part.

(h) Section 1833(t)(9)(B) of the Act related to the requirement that Medicare account for adjustments to ensure that the amount of expenditures under the OPPS for the year does not increase or decrease from the estimated amount of expenditures under the OPPS that would have been made if the adjustments had not been made.

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Subparts G through J [Reserved]

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Subpart K—Model Termination

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§513.1000   Termination of the MFN Model.

(a) CMS may terminate the MFN Model for reasons including, but not limited to, the following:

(1) CMS determines that it no longer has the funds to support the MFN Model.

(2) CMS terminates the model in accordance with section 1115A(b)(3)(B) of the Act.

(b) As specified in section 1115A(d)(2) of the Act, termination of the model in accordance with section 1115A(b)(3)(B) of the Act is not subject to administrative or judicial review.

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