On Friday, the Trump Administration issued an interim final rule implementing a new mandatory, nationwide model for Medicare suppliers, including group practices. The Most Favored Nation (MFN) Model will operate for seven years, beginning on Jan. 1, 2021, and will include the following elements:

• Instead of paying providers that administer drugs based on the average sales price (ASP) in the U.S., Medicare will pay for Medicare Part B drugs based on a blended formula that includes the lowest adjusted international price (the “MFN Price”) and the ASP as well as a flat add-on amount per dose. The MFN Price will be phased in over the span of four years, but is subject to an accelerated timeline if U.S. prices rise faster than the MFN Price and inflation.
• The MFN Model will focus on a list of 50 drugs that encompass a high percentage of Medicare Part B spending.

Due to the way in which the Administration circumvented the typical rulemaking process in issuing this regulation, it is possible that it will face legal challenges. MGMA is assessing the impact on medical group practices and will monitor future developments.