Medicaid Program; Establishing Minimum Standards in Medicaid State Drug Utilization Review (DUR) and Supporting Value-Based Purchasing (VBP) for Drugs Covered in Medicaid, Revising Medicaid Drug Rebate and Third Party Liability (TPL) Requirements
| Published date | 19 June 2020 |
| Citation | 85 FR 37286 |
| Record Number | 2020-12970 |
| Section | Proposed rules |
| Court | Centers For Medicare & Medicaid Services |
Federal Register, Volume 85 Issue 119 (Friday, June 19, 2020)
[Federal Register Volume 85, Number 119 (Friday, June 19, 2020)]
[Proposed Rules]
[Pages 37286-37322]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-12970]
[[Page 37285]]
Vol. 85
Friday,
No. 119
June 19, 2020
Part IV
Department of Health and Human Services
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Centers for Medicare & Medicaid Services
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42 CFR Parts 433, 438, 447, et al.
Medicaid Program; Establishing Minimum Standards in Medicaid State Drug
Utilization Review (DUR) and Supporting Value-Based Purchasing (VBP)
for Drugs Covered in Medicaid, Revising Medicaid Drug Rebate and Third
Party Liability (TPL) Requirements; Proposed Rule
Federal Register / Vol. 85, No. 119 / Friday, June 19, 2020 /
Proposed Rules
[[Page 37286]]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
42 CFR Parts 433, 438, 447 and 456
[CMS-2482-P]
RIN 0938-AT82
Medicaid Program; Establishing Minimum Standards in Medicaid
State Drug Utilization Review (DUR) and Supporting Value-Based
Purchasing (VBP) for Drugs Covered in Medicaid, Revising Medicaid Drug
Rebate and Third Party Liability (TPL) Requirements
AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.
ACTION: Proposed rule.
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SUMMARY: This proposed rule would advance CMS' efforts to support state
flexibility to enter into innovative value-based purchasing
arrangements (VBPs) with manufacturers, and to provide manufacturers
with regulatory support to enter into VBPs with payers, including
Medicaid. To ensure that the regulatory framework is sufficient to
support such arrangements and to promote transparency, flexibility, and
innovation in drug pricing without undue administrative burden, we are
proposing new regulatory policies and clarifying certain already
established policies to assist manufacturers and states in
participating in VBPs in a manner that is consistent with the law and
maintains the integrity of the Medicaid Drug Rebate Program (MDRP).
This proposed rule also proposes revisions to regulations regarding:
Authorized generic sales when manufacturers calculate average
manufacturer price (AMP); pharmacy benefit managers (PBM) accumulator
programs and their impact on AMP and best price; state and manufacturer
reporting requirements to the MDRP; new Medicaid Drug Utilization
Review (DUR) provisions designed to reduce opioid related fraud, misuse
and abuse; the definitions of CMS-authorized supplemental rebate
agreement, line extension, new formulation, oral solid dosage form,
single source drug, multiple source drug, innovator multiple source
drug for purposes of the MDRP; payments for prescription drugs under
the Medicaid program; and coordination of benefits (COB) and third
party liability (TPL) rules related to the special treatment of certain
types of care and payment in Medicaid and Children's Health Insurance
Program (CHIP).
DATES: To be assured consideration, comments must be received at one of
the addresses provided below, no later than 5 p.m. on July 20, 2020.
ADDRESSES: In commenting, please refer to file code CMS-2842-P.
Comments, including mass comment submissions, must be submitted in
one of the following three ways (please choose only one of the ways
listed):
1. Electronically. You may submit electronic comments on this
regulation to http://www.regulations.gov. Follow the ``Submit a
comment'' instructions.
2. By regular mail. You may mail written comments to the following
address ONLY: Centers for Medicare & Medicaid Services, Department of
Health and Human Services, Attention: CMS-2482-P, P.O. Box 8016,
Baltimore, MD 21244-8016.
Please allow sufficient time for mailed comments to be received
before the close of the comment period.
3. By express or overnight mail. You may send written comments to
the following address ONLY: Centers for Medicare & Medicaid Services,
Department of Health and Human Services, Attention: CMS-2482-P, Mail
Stop C4-26-05, 7500 Security Boulevard, Baltimore, MD 21244-1850.
For information on viewing public comments, see the beginning of
the SUPPLEMENTARY INFORMATION section.
FOR FURTHER INFORMATION CONTACT:
Ruth Blatt, (410) 786-1767, for issues related to the definition of
line extension, new formulation, oral solid dosage form, single source
drug, multiple source drug, and innovator multiple source drug.
Cathy Sturgill, (410) 786-3345, for issues related to Third Party
Liability.
Michael Forman, (410) 786-2666 and Whitney Swears (410) 786-6543
for issues related to Drug Utilization Review.
Christine Hinds, (410) 786-4578, for issues related to Value-based
Purchasing.
Joanne Meneeley, (410) 786-1361, for issues related to State Drug
Utilization Data (SDUD) certification.
Christine Hinds, (410) 786-4578, for issues related to Authorized
Generics and Inflation Rebates.
Charlotte Amponsah (410) 786-1092, for issues related to
Manufacturer-sponsored Patient Assistance Programs.
SUPPLEMENTARY INFORMATION:
I. Background
Under the Medicaid program, states may provide coverage of
prescribed drugs as an optional benefit under section 1905(a)(12) of
the Social Security Act (the Act). Section 1903(a) of the Act provides
for federal financial participation (FFP) in state expenditures for
these drugs. In the case of a state that provides for medical
assistance for covered outpatient drugs, as provided under section
1902(a)(54) of the Act, the state must comply with the requirements of
section 1927 of the Act. Section 1927 of the Act governs the Medicaid
Drug Rebate program (MDRP) and payment for covered outpatient drugs
(CODs), which are defined in section 1927(k)(2) of the Act. In general,
for payment to be made available for CODs under section 1903(a) of the
Act, manufacturers must enter into a National Drug Rebate Agreement
(NDRA) as set forth in section 1927(a) of the Act. See also section
1903(i)(10) of the Act. The MDRP is authorized under section 1927 of
the Act, and is a program that includes CMS, state Medicaid agencies,
and participating drug manufacturers that helps to partially offset the
federal and state costs of most outpatient prescription drugs dispensed
to Medicaid beneficiaries. The MDRP provides specific requirements for
rebate agreements, drug pricing submission and confidentiality
requirements, the formulas for calculating rebate payments, drug
utilization reviews (DUR), and requirements for states for CODs.
The Covered Outpatient Drugs final rule with comment period (COD
final rule) was published in the February 1, 2016 Federal Register (81
FR 5170) and became effective on April 1, 2016. The COD final rule
implemented provisions of section 1927 of the Act that were added by
the Patient Protection and Affordable Care Act of 2010, as amended by
the Health Care and Education Reconciliation Act of 2010 (collectively
referred to as the Affordable Care Act) pertaining to Medicaid
reimbursement for CODs. It also revised other requirements related to
CODs, including key aspects of Medicaid coverage and payment and the
MDRP under section 1927 of the Act. The regulations implemented through
the COD final rule, and those proposed in this notice of proposed
rulemaking are consistent with the Secretary's authority set forth in
section 1102 of the Act to publish regulations that are necessary to
the efficient administration of the Medicaid program.
A. Changes to Coordination of Benefits/Third Party Liability Regulation
Due to Bipartisan Budget Act (BBA) 2018
Medicaid is the payer of last resort, which means that other
available
[[Page 37287]]
resources--known as third party liability, or TPL--must be used before
Medicaid pays for services received by a Medicaid-eligible individual.
Title XIX of the Act requires state Medicaid programs to identify and
seek payment from liable third parties, before billing Medicaid.
Section 53102 of the Bipartisan Budget Act of 2018 (BBA 2018) (Pub. L.
115-123, enacted February 9, 2018) amended the TPL provision at section
1902(a)(25) of the Act. Specifically, section 1902(a)(25)(A) of the Act
requires that states take all reasonable measures to ascertain legal
liability of third parties to pay for care and services available under
the plan. That provision further specifies that a third party is any
individual, entity, or program that is or may be liable to pay all or
part of the expenditures for medical assistance furnished under a state
plan. Section 1902(a)(25)(A)(i) of the Act specifies that the state
plan must provide for the collection of sufficient information to
enable the state to pursue claims against third parties. Examples of
liable third parties include: Private insurance companies through
employment-related or privately purchased health insurance; casualty
coverage resulting from an accidental injury; payment received directly
from an individual who has voluntarily accepted or been assigned legal
responsibility for the health care of one or more Medicaid recipients;
fraternal groups, unions, or state workers' compensation commissions;
and medical support provided by a parent under a court or
administrative order.
Effective February 9, 2018, section 53102(a)(1) of the Bipartisan
Budget Act of 2018 amended section 1902(a)(25)(E) of the Act to require
a state to use standard coordination of benefits cost avoidance when
processing claims for prenatal services which now included labor and
delivery and postpartum care claims. Additionally, effective October 1,
2019, section 53102(a)(1) of the Bipartisan Budget Act of 2018 amended
section 1902(a)(25)(E) of the Act, to require a state to make payments
without regard to third party liability for pediatric preventive
services unless the state has made a determination related to cost-
effectiveness and access to care that warrants cost avoidance for 90
days.
Section 53102(b)(2) of the Bipartisan Budget Act of 2018 delays the
implementation date from October 1, 2017 to October 1, 2019 of the
Bipartisan Budget Act of 2013 provision, which allowed for payment up
to 90 days after a claim is submitted that is associated with medical
support enforcement instead of 30 days under previous law. Medical
support is a form of child support that is often provided through an
absent parent's employers health insurance plan.
Effective April 18, 2019, section 7 of the Medicaid Services
Investment and Accountability Act of 2019 (Pub. L. 116-16) amended
section 202(a)(2) of the Bipartisan Budget Act of 2013 to allow 100
days instead of 90 days to pay claims related to medical support
enforcement under section 1902(a)(25)(F)(i) of the Act.
B. Changes to the Calculation of Average Manufacturer Price (AMP)
Regarding Authorized Generic Drugs Due to the Continuing Appropriations
Act, 2020, and Health Extenders Act of 2019
On September 27, 2019, the President signed into law the Continuing
Appropriations Act, 2020, and Health Extenders Act of 2019 (Health
Extenders Act) (Pub. L. 116-59), which made changes to sections
1927(k)(1) and 1927(k)(11) of the Act, revising how manufacturers
calculate the average manufacturer price (AMP) for a covered outpatient
drug, for which the manufacturer permits an authorized generic to be
sold and redefines the definition of wholesaler. Manufacturers that
approve, allow, or otherwise permit any drug to be sold under the
manufacturer's own new drug application (NDA) approved under section
505(c) of the Federal Food, Drug, and Cosmetic Act, shall no longer
include sales of these authorized generics in the calculation of AMP,
regardless of the relationship between the brand name manufacturer and
the manufacturer of the authorized generic.
Specifically, section 1603 of the Health Extenders Act, which is
titled ``Excluding Authorized Generic Drugs from Calculation of Average
Manufacturer Price for Purposes of the Medicaid Drug Rebate Program;
Excluding Manufacturers from Definition Of Wholesaler,'' amended the
statute as follows:
Section 1927(k)(1)(C) of the Act to replace the term
``Inclusion'' with ``Exclusion'' in the title and further amended
subparagraph (C) to state that, in the case of a manufacturer that
approves, allows, or otherwise permits any drug of the manufacturer to
be sold under the manufacturer's new drug application approved under
section 505(c) of the Federal Food, Drug, and Cosmetic Act, such term
shall be exclusive of the average price paid for such drug by
wholesalers for drugs distributed to retail community pharmacies.
The definition of wholesaler at section 1927(k)(11) of the
Act to remove references to manufacturers from the definition of
wholesaler.
Typically, an authorized generic is a product that a manufacturer
(primary manufacturer) allows another manufacturer (secondary
manufacturer) to sell under the primary manufacturer's FDA approved NDA
but under a different National Drug Code (NDC) number. The authorized
generic is typically the primary manufacturer's brand product offered
at a lower price point. Primary manufacturers may sell the authorized
generic product to the secondary manufacturer they are allowing to sell
an authorized generic of their brand product, and such sales are
commonly referred to as transfer sales. Under the amendments made to
section 1927 of the Act, a primary manufacturer that sells the
authorized generic version of the brand drug to the secondary
manufacturer can no longer include the price of the transfer sale of
the authorized generic to the secondary manufacturer in its calculation
of AMP for the brand product. The exclusion of these transfer sales
from the primary manufacturer's brand drug AMP will likely result in
higher AMPs for the brand drugs and a potential increase to a
manufacturer's Medicaid drug rebates to states.
The amendments to section 1927 authorized under section 1603 of the
Health Extenders Act are effective October 1, 2019. Therefore,
manufacturers must reflect the changes to the calculation of their AMPs
for rebate periods beginning October 1, 2019 (reported to CMS no later
than 30 days after the end of the rebate period). To assist
manufacturers, CMS provided guidance in Manufacturer Release #111 \1\
and Manufacturer Release #112.\2\ Furthermore, in accordance with 42
CFR 447.510(b), manufacturers have 12 quarters from the quarter in
which the data were due to revise AMP, if necessary.
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\1\ https://www.medicaid.gov/medicaid-chip-program-information/by-topics/prescription-drugs/downloads/rx-releases/mfr-releases/mfr-rel-111.pdf.
\2\ https://www.medicaid.gov/prescription-drugs/downloads/mfr-rel-112.pdf.
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C. Changes as Result of the Bipartisan Budget Act of 2015
Under the Medicaid program, states may provide coverage of
prescribed drugs as an optional service under section 1905(a)(12) of
the Act. Section 1903(a) of the Act provides for FFP in state
expenditures for these drugs. Section 1927 of the Act governs the MDRP
and payment for CODs, which are defined in section 1927(k)(2) of the
[[Page 37288]]
Act. In general, for payment to be made available under section 1903(a)
of the Act for CODs, manufacturers must enter into an NDRA as set forth
in section 1927(a) and (b) of the Act. Section 1927 of the Act provides
specific requirements for rebate agreements, drug pricing submission
and confidentiality requirements, the formulas for calculating rebate
payments, and requirements for states for CODs. Section 602 of the
Bipartisan Budget Act of 2015 (BBA 2015) (Pub. L. 114-74, enacted
November 2, 2015) amended section 1927(c)(3) of the Act to require that
manufacturers pay additional rebates on their non-innovator multiple
source (N) drugs if the average manufacturer prices of an N drug
increase at a rate that exceeds the rate of inflation. This provision
of BBA 2015 was effective beginning with the January 1, 2017 quarter,
or in other words, beginning with the unit rebate amounts (URAs) that
are calculated for the January 1 2017 quarter. This additional
inflation adjusted rebate requirement for N drugs was discussed in
Manufacturer Release Nos. 97 (Manufacturer Release 97) and
101(Manufacturer Release 101).
D. Current Medicaid Drug Rebate Program and Value-Based Purchasing
Arrangements (VBP)
In the preamble of the COD final rule, in response to a comment (81
FR 5253), we recognized the importance of VBPs, especially when such
arrangements benefit patients. We acknowledged that, given the
uniqueness of each VBP arrangement, we had to consider how to provide
more specific guidance on the matter, including how such arrangements
affect a manufacturer's calculation of its best price and Medicaid drug
rebate obligations. Thereafter, we released a state and manufacturer
notice on July 14, 2016 (available at State Release 176 \3\ and
Manufacturer Release 99 \4\) to inform states and manufacturers on how
to seek guidance from us on their specific VBP, as well as to encourage
states to consider entering into VBP as a means to address high cost
drug treatments.
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\3\ https://www.medicaid.gov/medicaid-chip-program-information/by-topics/prescription-drugs/downloads/rx-releases/state-releases/state-rel-176.pdf.
\4\ https://www.medicaid.gov/medicaid-chip-program-information/by-topics/prescription-drugs/downloads/rx-releases/mfr-releases/mfr-rel-099.pdf.
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Since the release, manufacturers and states have shown an increased
interest in VBP as a possible option for better managing and predicting
drug spending, which helps to assure that manufacturers have some
vested interest in assuring positive patient outcomes from the use of
their drugs. To this end, CMS has approved several state plan
amendments submitted by states that allow states to negotiate
supplemental rebates under CMS-authorized rebate agreements with drug
manufacturers based on evidence or outcomes-based measures for a
patient or beneficiary based on use of the drug. In addition,
manufacturers have approached us with their issues and questions
regarding the impact of various types of VBP proposals on their MDRP
price reporting obligations (that is, AMP and best price), as well as
the regulatory challenges they encounter when structuring and
implementing VBP. Finally, manufacturers have noted MDRP reporting
challenges with VBP programs, whose evidence or outcomes-based measures
extend beyond 3 years, particularly given that manufacturers have
limited ability to make changes to reporting metrics outside the 12-
quarter MDRP reporting period. This proposed regulation would address
some of the manufacturer concerns with regards to these MDRP
requirements.
E. Definition of Line Extension, New Formulation, and Oral Solid Dosage
Form for Alternative Unit Rebate Amount
Section 2501(d) of the Patient Protection and Affordable Care Act
(Pub. L. 111-148, enacted March 23, 2010), as amended by section 1206
of the Health Care and Education Reconciliation Act of 2010 (Pub. L.
111-152, enacted March 30, 2010) (collectively referred to as the
Affordable Care Act) added section 1927(c)(2)(C) of the Act effective
for drugs paid for by a state on or after January 1, 2010. This
provision establishes an alternative formula for calculating the URA
for a line extension of a single source drug or innovator multiple
source drug that is an oral solid dosage form. We refer to the URA
calculated under the alternative formula as the ``alternative URA''.
Additionally, the Affordable Care Act defined ``line extension'' to
mean, with respect to a drug, a new formulation of the drug, such as an
extended release formulation. Section 1927(c)(2)(C) of the Act was
further amended by section 705 of the Comprehensive Addiction and
Recovery Act of 2016 (CARA) (Pub. L. 114-198, enacted July 22, 2016) to
exclude from that definition an abuse-deterrent formulation of the drug
(as determined by the Secretary), regardless of whether such abuse-
deterrent formulation is an extended release formulation. The
determination of whether a drug is excluded because it is an abuse
deterrent formulation is explained in at Manufacturer Release 102.\5\
The CARA amendment applies to drugs paid for by a state in calendar
quarters beginning on or after the July 22, 2016 date of enactment of
CARA (that is, beginning with 4Q 2016). Finally, section 1927(c)(2)(C)
of the Act was further amended by section 53104 of the BBA of 2018,
which provided a technical correction such that the rebate for a line
extension of a single source drug or an innovator multiple source drug
that is an oral solid dosage form shall be the greater of either (1)
the standard rebate (calculated as a base rebate amount plus an
additional inflation-based rebate) or (2) the base rebate amount
increased by the alternative formula described in section
1927(c)(2)(C)(iii)(I) through (III) of the Act. We refer to the
additional inflation-based rebate as the ``additional rebate.''
Additionally, as we have previously used the term ``initial brand name
listed drug'' in the ``Medicaid Program; Covered Outpatient Drugs''
proposed rule published in the February 2, 2012 Federal Register (77 FR
5318, 5323 through 5324) (hereinafter referred to as the February 2,
2012 proposed rule), the Covered Outpatient Drugs final rule with
comment published on February 1, 2016 (81 FR 5197), and 42 CFR
447.509(a)(4)(iii) to refer to the initial single source drug or
innovator multiple source drug, we continue to do so in this proposed
rule. The BBA of 2018 amendment applies to rebate periods beginning on
or after October 1, 2018.
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\5\ https://www.medicaid.gov/medicaid-chip-program-information/by-topics/prescription-drugs/downloads/rx-releases/mfr-releases/mfr-rel-102.pdf.
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We proposed a definition of ``line extension'' in the February 2,
2012 proposed rule (77 FR 5323 through 5324) and received numerous
comments from stakeholders. In the COD final rule, we did not finalize
the proposed definition and requested additional comments with a 60-day
comment period that closed on April 1, 2016. The additional comments
received, although instructive of the public's thoughts at the time,
were not informed by the then-current statutory framework. Therefore,
we did not finalize a definition of ``line extension'' in the April 1,
2019 final rule (84 FR 12132). We reiterated in the April 1, 2019 final
rule that manufacturers are to rely on the statutory definition of
``line extension'' at section 1927(c)(2)(C) of the Act, and where
appropriate are permitted to use reasonable assumptions in their
determination of whether their drug qualifies as a line extension. We
also stated that if we later decide to develop
[[Page 37289]]
a regulatory definition of ``line extension,'' we would do so through
our established Administrative Procedures Act (APA) compliant
rulemaking process and issue a proposed rule. For the reasons discussed
in section II.C. of this proposed rule, we are proposing definitions of
``line extension'', ``new formulation'', and ``oral solid dosage
form''.
The line extension provision has been in effect since January 1,
2010, and the Drug Data Reporting for Medicaid (DDR) system was
modified in 2016 to implement the data reporting requirements for line
extensions. However, we have found that some manufacturers are unclear
about their line extension reporting obligations, for example, whether
a particular drug satisfies the statutory definition of line extension
and the identification of the initial brand name listed drug.
Therefore, in addition to proposing definitions of ``line extension'',
``new formulation'', and ``oral solid dosage form'', we are providing
clarification below regarding manufacturers' reporting obligations.
Details regarding how to calculate the additional rebate
(calculated as a percentage of AMP) and the alternative URA can be
found in the ``Medicaid Program; Covered Outpatient Drug; Line
Extension Definition; and Change to the Rebate Calculation for Line
Extension Drugs'' final rule and interim final rule with comment period
that was published in the April 1, 2019 Federal Register (84 FR 12133)
(hereinafter referred to as the April 1, 2019 final rule). We note that
under Sec. 447.509(a)(4)(iii), manufacturers are required to calculate
the alternative URA if the manufacturer of the line extension also
manufactures the initial brand name listed drug or has a corporate
relationship with the manufacturer of the initial brand name listed
drug. As noted later in section II.C. of this proposed rule, although a
drug that meets the definition of a line extension should be identified
as such in DDR, a manufacturer is not required to calculate the
alternative URA unless the manufacturer of the line extension also
manufactures, or has a corporate relationship with the manufacturer of,
the initial brand name listed drug.
To apply the alternative formula described in section
1927(c)(2)(C)(iii)(I) through (III) of the Act for each line extension
and rebate period, the manufacturer must determine which NDC represents
the initial brand name listed drug that will be used to calculate the
alternative URA. First, the manufacturer must identify all potential
initial brand name listed drugs by their respective NDCs by considering
all strengths of the initial brand name listed drug in accordance with
section 1927(c)(2)(C)(iii)(II) of the Act. Additionally, only those
potential initial brand name listed drugs that are manufactured by the
manufacturer of the line extension or by a manufacturer with which the
line extension manufacturer has a corporate relationship should be
considered. Then, the manufacturer must evaluate the additional rebate
(calculated as a percentage of AMP) for each potential initial brand
name listed drug. The potential initial brand name listed drug that has
the highest additional rebate (calculated as a percentage of AMP) is
the initial brand name listed drug that must be identified in DDR and
used to calculate the alternative URA for the rebate period.
Section 1927(c)(2)(C)(i) of the Act requires the manufacturer to
calculate the alternative formula for each quarter in order to
determine the initial drug for each quarter that has the highest
additional rebate (calculated as a percentage of AMP). Therefore, the
manufacturer must re-evaluate the additional rebate (calculated as a
percentage of AMP) for each potential initial brand name listed drug
each quarter. Because the additional rebate (calculated as a percentage
of AMP) for any potential initial brand name listed drug may change
from one quarter to the next, the initial brand name listed drug used
for the alternative URA calculation may also change from one quarter to
the next. Additionally, the NDC for the initial brand name listed drug
must be active in MDRP for the quarter, that is, an NDC that is
produced or distributed by a manufacturer with an active NDRA and the
NDC does not have a termination date that occurred in a rebate period
earlier than the rebate period for which the calculation is being
performed. Because drugs may come on and off the market, an initial
brand name listed drug that was used to calculate the alternative URA
for one quarter may not be active in MDRP for the next quarter.
However, a different initial brand name listed drug may be active in
MDRP and available to use to calculate the alternative URA for the next
quarter.
F. Impact of Certain Manufacturer Sponsored Patient Assistance Programs
(``PBM Accumulator Programs'') on Best Price and Average Manufacturer
Price (AMP)
Manufacturer-sponsored patient assistance programs can be helpful
to patients in obtaining necessary medications. However, pharmacy
benefit managers (PBMs) contend that manufacturer-sponsored assistance
programs steer consumers towards more expensive medications when there
may be more cost saving options available to health plans. Therefore,
as a cost saving measure, PBMs have encouraged health plans in some
cases to not allow the manufacturer assistance provided under such
programs to be applied towards a patient's health plan deductible for a
brand name drug not on a plan's formulary. This proposed regulation
would provide instruction to manufacturers on how to consider the
implementation of such programs when determining best price and AMP for
purposes of the MDRP.
G. State Drug Utilization Data (SDUD) Reported to Medicaid Drug Rebate
Program
Section 1927(b)(2)(A) of the Act requires each State agency to
report to each manufacturer not later than 60 days after the end of
each rebate period and in a form consistent with a standard reporting
format established by the Secretary, information on the total number of
units of each dosage form and strength and package size of each covered
outpatient drug dispensed after December 31, 1990, for which payment
was made under the plan during the period, including such information
reported by each Medicaid managed care organization, and shall promptly
transmit a copy of such report to the Secretary. In accordance with
this requirement, states are required to send state drug utilization
data (SDUD) using OMB-approved Rebate Invoice Form, the CMS-R-144 (the
data fields and descriptions are included as Exhibit X in this proposed
rule) to manufacturers and transmit a copy of this report to CMS.
While many states subject their SDUD on the CMS-R-144 to edits in
order to uncover outliers/inaccuracies in the invoices to manufacturers
before sending copies to CMS, some states send unedited copies of the
SDUD to CMS, resulting in discrepancies that do not conform with the
statutory requirement at section 1927(b)(2)(A) of the Act. The statute
requires such reporting to be in a form consistent with a standard
reporting format established by the Secretary, and we believe that such
a copy means that the data submitted on the invoice (CMS-R-144) to the
manufacturer must be accurate and identical to the report (copy) states
send to CMS. Further, we expect that when states send SDUD updates or
changes to manufacturers, they transmit those changes to us
concurrently in a copy to CMS. However, in some cases,
[[Page 37290]]
states fail to submit these updates causing the data to be mismatched.
This results in states not complying with section 1927(b)(2)(A) of the
Act and CMS not having an accurate account of rebates billed in the
MDRP.
H. Changes Related to the Substance Use-Disorder Prevention That
Promotes Opioid Recovery and Treatment (SUPPORT) for Patients and
Communities Act
The epidemic of opioid overdose, misuse, and addiction is a
critical public health issue that affects the lives of millions of
Americans. Research shows the opioid overdose epidemic has a
disproportionate impact on Medicaid beneficiaries and the consequences
have been tragic. In 2017, 47,600 people in America died of an opioid
overdose per the Centers for Disease Control and Prevention (CDC).\6\
Inappropriate opioid prescribing can result in costly medical
complications such as abuse, misuse, overdoses, falls and fractures,
drug to drug interactions and neonatal conditions. The use of multiple
opioids is associated with a higher risk of mortality, with mortality
risk increasing in direct relation to the number of opioids prescribed
concurrently.7 8 Beneficiaries who receive multiple opioids
may lack coordinated care and are at higher risk for opioid
overdose.\9\ These complications are costly, preventable, and result in
avoidable healthcare expenditures.\10\ Moreover, according to the
National Institute on Drug Abuse (NIDA), research suggests that misuse
of prescription pain relievers may actually open the door to heroin
use, as four in five new heroin users started out misusing prescription
painkillers.\11\
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\6\ https://www.cdc.gov/drugoverdose/data/statedeaths.html.
\7\ Ray WA, Chung CP, Murray KT, Hall K, Stein CM. Prescription
of Long-Acting Opioids and Mortality in Patients with Chronic
Noncancer Pain. JAMA. 2016 Jun 14; 315(22):2415-23.
\8\ Baumblatt JA, Wiedeman C, Dunn JR, Schaffner W, et al. High-
risk use by patients prescribed opioids for pain and its role in
overdose deaths. JAMA Intern Med. 2014 May; 174(5):796-801.
\9\ Bonnie, Richard J., et al. Pain Management and the Opioid
Epidemic: Balancing Societal and Individual Benefits and Risks of
Prescription Opioid Use. The National Academies Press, 2017.
\10\ Davis, Cory. ``Naloxone for Community Opioid Overdose
Reversal.'' Naloxone for Community Opioid Overdose Reversal [bond]
Public Health Law Research, Public Health Law Research (PHLR), 22
June 2015, http://phlr.org/product/naloxone-community-opioid-overdose-reversal.
\11\ ``Opioid Addiction 2016 Facts & Figures--ASAM Home Page.''
American Society of Addition Medicine, www.asam.org/docs/default-source/advocacy/opioid-addiction-disease-facts-figures.pdf.
---------------------------------------------------------------------------
Since 1993, section 1927(g) of the Act has required each state to
develop a DUR program targeted, in part, at reducing abuse and misuse
of outpatient prescription drugs covered under the State's Medicaid
Program. The DUR program operates to assure that prescriptions are
appropriate, medically necessary, and are not likely to result in
adverse medical events. Each state DUR program consists of prospective
drug use review, retrospective drug use review, data assessment of drug
use against predetermined standards, and ongoing educational outreach
activities.
Consistent with section 1927(g)(3)(D) of the Act, we require each
state Medicaid Program to submit to us an annual report on the
operation of its Medicaid DUR program with respect to the fee-for-
service (FFS) delivery system, including information on prescribing
patterns, cost savings generated by the state's DUR program, and the
state's DUR program's overall operations, including any new or
innovative practices. Additionally, Sec. 438.3(s)(4) and (5) require
state contracts with any managed care organization (MCO), prepaid
inpatient health plan (PIHP) or prepaid ambulatory health plan (PAHP)
that covers covered outpatient drugs to require the MCO, PIHP, or PAHP
to operate a DUR program that complies with section 1927(g) of the Act
and 42 CFR part 456, subpart K, and to submit detailed information
about its DUR program activities annually. For the purposes of this
proposed rule, managed care program (MCP) references MCOs, managed care
entities (MCEs), PAHPs and PIHPs.
The Substance Use-Disorder Prevention that Promotes Opioid Recovery
and Treatment for Patients and Communities Act (Pub. L. 115-271,
enacted October 24, 2018) (the SUPPORT for Patients and Communities
Act) includes measures to combat the opioid crisis in part by reducing
opioid related abuse and misuse by advancing treatment and recovery
initiatives, improving prevention, protecting communities, and
bolstering efforts to fight deadly illicit synthetic drugs. There are
several Medicaid-related DUR provisions for FFS and MCP pharmacy
programs contained within section 1004 of the SUPPORT for Patients and
Communities Act. These provisions establish drug review and utilization
standards in section 1902(a)(85) and (oo) of the Act to supplement
existing requirements under section 1927(g) of the Act, in an effort to
reduce opioid-related fraud, misuse and abuse. State implementation of
these strategies was required by October 1, 2019, and states must
include information about their implementation in their annual reports
under section 1927(g)(3)(D) of the Act. In turn, the Secretary is
required to report to Congress on the information submitted by the
states, starting with information from states' FY 2020 reports.
Consistent with section 1927(g) of the Act, the SUPPORT for
Patients and Communities Act has the goal of improving the quality of
care received by Medicaid recipients by reducing their exposure to
hazards resulting from the inappropriate prescribing, gross overuse, or
inappropriate or medically unnecessary care. In this context,
strategies to assure the appropriate use of opioids are now being
implemented in clinical settings, health care systems and public health
agencies. Efforts to prevent harms associated with overuse and misuse
of opioids must be integrated to ensure patients are receiving
appropriate standards of care. We recognize efforts involving multiple
stakeholders are needed to address the opioid crisis, to assure the
health and well-being of Medicaid beneficiaries, and decrease any
related health care expenditures as well as for prevention of future
epidemics. We are committed to ensuring there are basic minimum
standards implemented through Medicaid DUR programs nationwide to help
ensure that prescriptions are appropriate, medically necessary and
align with current standards of care, under our authority to implement
section 1927(g) of the Act and section 1004 of the SUPPORT for Patients
and Communities Act.
I. Single Source Drug, Multiple Source Drug, Innovator Multiple Source
Drug
Section 6(c) of the Medicaid Services Investment and Accountability
Act of 2019 (Pub. L. 116-16, enacted April 18, 2019) modified the
definitions in section 1927(k) of the Act for single source drug,
multiple source drug, and innovator multiple source drug. In this
proposed rule, we propose to revise the definitions of these terms at
Sec. 447.502 to reflect these statutory changes.
II. Provisions of the Proposed Regulations
A. Third Party Liability: Payment of Claims (Sec. 433.139)
In 1980, under the authority in section 1902(a)(25)(A) of the Act,
we issued regulations at 42 CFR part 433, subpart D establishing
requirements for state Medicaid agencies to support the coordination of
benefits (COB) effort by identifying TPL. Effective February 9, 2018,
section 53102(a)(1) of BBA 2018 amended section 1902(a)(25)(E) of the
Act to require states to cost avoid claims
[[Page 37291]]
(for example, when the state Medicaid agency has determined there is a
legally liable third party responsible for paying the claim, it will
reject (``cost avoid'') the claim) for prenatal care for pregnant women
including labor and delivery and postpartum care, and to allow the
state Medicaid agency 90 days instead of 30 days to pay claims related
to medical support enforcement services, as well as requiring states to
collect information on TPL before making payments. Effective April 18,
2019, section 7 of the Medicaid Services Investment and Accountability
Act of 2019 amended section 1902(a)(25)(E) of the Act to allow 100 days
instead of 90 days to pay claims related to medical support enforcement
services, as well as requiring states to collect information on TPL
before making payments.
Section 433.139(b)(2), (b)(3)(i) and (b)(3)(ii)(B) detail the
exception to standard COB cost avoidance by allowing pay and chase for
certain types of care, as well as the timeframe allowed prior to
Medicaid paying claims for certain types of care. Specifically, we are
proposing to delete Sec. 433.139(b)(2). We are also proposing to
revise Sec. 433.139(b)(3)(i) by removing ``prenatal care for pregnant
women, or'' from pay and chase services, and Sec. 433.139(b)(3)(ii)(B)
by removing ``30 days'' and adding ``100 days.''
B. Changes To Address Medicaid Access to Drugs Using Value-Based
Purchasing Arrangements (VBP)
In the preamble of the COD final rule, in response to a comment in
the COD final rule (81 FR 5253), we recognized the importance of VBP
especially when such arrangements benefit Medicaid patients' access to
drug treatments. We acknowledged that given the uniqueness of each VBP
arrangement, we had to consider how to provide more specific guidance
on the matter, including how such arrangements affect a manufacturer's
best price and Medicaid drug rebate obligations. Thereafter, we
released a state and manufacturer notice on July 14, 2016 (State
Release 176 and Manufacturer Release 99) to inform states and
manufacturers on how to seek guidance from us on their specific VBPs,
as well as encourage states to consider entering into VBPs as a means
to address high cost drug treatments.
Since those releases, manufacturers and states have shown an
increased interest in VBP as a potential option for better managing and
predicting drug spending, which helps to assure that manufacturers have
some vested interest in assuring positive patient outcomes from the use
of their drugs. However, some manufacturers hesitate to offer VBP
arrangements to payers, including Medicaid, because of concerns that
the existing Medicaid covered outpatient drug statute and applicable
regulations do not specifically address, with respect to price
reporting, the purchase or discounting of drugs based on evidence or
outcomes-based measures. That is, CMS has not addressed the possible
impact of offering VBP arrangements on manufacturer compliance with
applicable MDRP price reporting obligations, including best price and
AMP reporting.
The Administration supports VBP because it believes it will assist
states with providing Medicaid patients access to needed therapies
while providing a payment arrangement that allows the state
flexibility, including an option to only pay when a therapy actually
works. In order for such arrangements to work for Medicaid, we need to
consider changes to MDRP regulations to both address manufacturers'
concerns with offering Medicaid such innovative payment arrangements,
while ensuring the required economies, efficiencies, and quality of
care provided under the Medicaid program. If we do not consider such
changes, manufacturers may be unwilling to offer VBP to Medicaid, which
in turn will mean Medicaid will not have the advantage of accessing
these arrangements for some of the drug therapies on the market that
could replace other more expensive Medicaid services (such as hospital
and physician-based services). In other words, by addressing a number
of potential regulatory hurdles in a proposed regulation, states will
be able to provide such methods and procedures relating to the
utilization of, and payment for care and services as may be necessary
to safeguard against unnecessary utilization of such care and services
and assure that consistent with section 1902(a)(30)(A) of the Act,
Medicaid payments are consistent with efficiency, economy, and quality
of care.
One potential regulatory hurdle manufacturers have raised with us
is best price reporting. Section 1927(c)(1)(C) of the Act defines best
price in relevant part to mean with respect to a single source drug or
innovator multiple source drug of a manufacturer the lowest price
available from the manufacturer during the rebate period to any
wholesaler, retailer, provider, health maintenance organization, non-
profit entity, or governmental entity within the United States, with
certain exclusions enumerated at sections 1927(c)(1)(C)(i)(I) through
(VI) of the Act. One of the issues manufacturers face in determining
best price with the advent of VBP arrangements is that a manufacturer's
best price can be reset based upon the outcome of a drug treatment for
one patient or one unit of the drug because of the VBP. When this
occurs, the rebate due for that single use of the drug during a quarter
that results in a negative outcome will reset the best price to a
significantly lower amount, sometimes zero, prompting a significantly
higher rebate (sometimes 100 percent of the drug's AMP).
This being the case, manufacturers have questioned how they should
calculate best price and account for these units when an outcome of a
VBP arrangement results in ``a lowest price available'' of zero or at a
significant discount. Manufacturers have expressed concern to CMS that
without further guidance from CMS in regulation regarding the
determination of best price in this scenario, the manufacturer could be
at risk of understating rebates and may potentially be subject to False
Claims Act liability, a risk which further diminishes manufacturer
interest in offering VBP payment arrangements in either the commercial
or Medicaid market. In turn, this may hinder Medicaid access to the
care and services provided as part of these VBP arrangements (for
example, to gene therapies and potentially curative orphan drug
treatments) that are available in the general population and that are
consistent with efficiency, economy, and quality of care in accordance
with section 1902(a)(30)(A) of the Act.
We believe this proposed rule proposes changes to the MDRP price
reporting (in particular best price) to address the regulatory
challenges manufacturers encounter when structuring and implementing
VBP, and therefore, gives manufacturers the ability to offer these
programs to commercial payers or Medicaid without the negative impact
on best price or the potential for MDRP regulatory compliance.
Subpart I--Payment for Drugs
1. Definitions (Sec. 447.502)
a. Value-Based Purchasing Arrangement (VBP)
A VBP arrangement is not expressly defined or addressed in section
1927 of the Act or the MDRP implementing regulations. In order to
address the issues noted above, we are proposing a definition of VBP to
apply, as appropriate, in implementation of the MDRP.
More specifically, we are proposing to define VBP at Sec. 447.502
to further clarify for manufacturers how discounts,
[[Page 37292]]
rebates, pricing etc. as a result of VBP arrangements should be
accounted for in a manufacturer's determination of AMP and best price
for an applicable covered outpatient drug.
At this time, manufacturers are permitted to make reasonable
assumptions in the absence of applicable statute, regulation or
guidance regarding how to treat pricing as a result of VBP. However,
because of the uncertainty or lack of assurances as to the propriety of
those reasonable assurances, we understand manufacturers may be
discouraged from offering VBP to payers including Medicaid. Therefore,
we propose to define VBP as an arrangement or agreement intended to
align pricing and/or payments to an observed or expected therapeutic or
clinical value in a population (that is, outcomes relative to costs)
and includes (but is not limited to):
Evidence-based measures, which substantially link the cost
of a drug product to existing evidence of effectiveness and potential
value for specific uses of that product;
Outcomes-based measures, which substantially link payment
for the drug to that of the drug's actual performance in a patient or a
population, or a reduction in other medical expenses.
We have observed that some examples of evidence or outcomes-based
measures used by manufacturers in their VBP proposals may be derived by
observing and recording the absence of disease over a period of time,
reducing a patient's medical spending, or improving a patient's
activities of daily living thus resulting in reduced non-medical
spending. In response to the proposed definition of VBP, we welcome
suggestions for other measures and a rationale for the suggested
measures that could be used to reflect value from a drug therapy and
considered as we develop a final definition. We also welcome
suggestions as to how to interpret ``substantially'' as used in the
definition. That is, how much of the drug product's final cost should
be associated with the evidence or outcomes based measure in order for
the arrangement to be considered a VBP (for example, a drug product
cost with less than 90 percent of the discounts/rebates tied to the
drug's performance not be considered a VBP arrangement).
b. Bundled Sale
As stated earlier, one of the issues manufacturers contend with in
determining best price with the advent of VBP arrangements is that a
manufacturer's best price can be reset based upon the outcome of a drug
treatment for one patient or one unit of the drug because of the VBP
arrangement. When this occurs, the rebate due for that single use of
the drug during a quarter that results in a negative outcome will reset
the best price to a significantly lower amount, sometimes zero,
prompting a significantly higher rebate (sometimes 100 percent of the
drug's AMP). We have received stakeholder comments and inquiries
regarding how rebates or discounts as part of a VBP arrangement could
be considered in a bundled sale when determining best price. Some
manufacturers have made reasonable assumptions that such discounts, as
a result of a VBP, should be considered part of a bundled sale as
defined at Sec. 447.502.
In the COD final rule, we defined bundled sale at Sec. 447.502 as
any arrangement regardless of physical packaging under which the
rebate, discount, or other price concession is conditioned upon the
purchase of the same drug, drugs of different types (that is, at the
nine-digit national drug code (NDC) level) or another product or some
other performance requirement (for example, the achievement of market
share, inclusion or tier placement on a formulary), or where the
resulting discounts or other price concessions are greater than those
which would have been available had the bundled drugs been purchased
separately or outside the bundled arrangement. Specifically, the
discounts in a bundled sale, including those discounts resulting from a
contingent arrangement, are allocated proportionally to the total
dollar value of the units of all drugs or products sold under the
bundled arrangement. Also, for bundled sales where multiple drugs are
discounted, the current definition indicates that the aggregate value
of all the discounts in the bundled arrangement must be proportionally
allocated across all the drugs or products in the bundle. (See Sec.
447.502; 81 FR at 5182.) We understand that based on the bundled sale
definition, which provides that the rebate, discount or other price
concession is conditioned upon the purchase of the same drug, drugs of
different types, or another product or some other performance
requirement, some manufacturers have made reasonable assumptions to
take into account the discounts from a VBP arrangement that has a
performance requirement when a measure (such as a performance-based
measure) is not met. When manufacturers recognize the VBP arrangement
as a bundled sale, the manufacturer, for example, may assume that the
discount that resulted from a performance requirement of a single unit
is distributed proportionally to the total dollar value of the units of
all the drugs sold in the bundled arrangement. This smooths out the
discount over all the units sold under the arrangement in the rebate
period and does not reset the manufacturer's best price based upon the
ultimate price of one unit of a drug.
For example, a manufacturer could structure a VBP arrangement such
that to qualify for a patient outcome rebate, the bundled sale VBP
arrangement requires the sale of 1,000 units of the same drug at $200
per unit, and if one patient fails to achieve an outcomes-based
performance measure the manufacturer agrees to a $100 price concession
on that one unit. In this example, because all of the drugs in the
bundle were subject to the performance requirement, the manufacturer's
scheme qualified as a bundled sale VBP arrangement, and thus, the
manufacturer's rebate of $100 on that one unit would be allocated
across all units in that bundled sale as follows:
1,000 units x $200 = $200,000-$100 price concession = ($199,900/1,000
units) = $199.90
Best price could be set at $199.90 if that $100 rebate available in
a qualifying bundled sale resulted in the lowest price available from
the manufacturer, and not at $100 ($200/unit-$100).
We agree with the applicability of the bundled sale definition in
this context because it will permit manufacturers to have a best price
that is not based upon the failure of one patient taking the drug.
Therefore, in order to facilitate the appropriate application of a
bundled sale offered in the context of a VBP arrangement to the best
price determination, we are proposing to revise the definition of
bundled sale at Sec. 447.502 to add paragraph (3) that states VBP
arrangements may qualify as a bundled sale, if the arrangement contains
a performance requirement such as an outcome(s) measurement metric. We
expect manufacturers, consistent with the manufacturer recording
keeping requirements at Sec. 447.510(f), to maintain documentation of
the arrangement to support their calculation of AMP and best price.
2. Definitions--Best Price (Sec. 447.505(a)) and Reporting of Multiple
Best Prices, Adjustments to Best Price (Sec. 447.505(d)(3))
In the preamble to the Covered Outpatient Drug Final Regulation (81
FR 5253), we indicated that we recognized the value of pharmaceutical
value based purchasing arrangements in the marketplace, and that we
were
[[Page 37293]]
considering how to give specific guidance on this matter, including how
such arrangements affect a manufacturer's ``best price.'' In addition
to CMS, States, manufacturers, and commercial payers all have an
interest in making new innovative therapies available to patients, and
we have heard that there are challenges with the current interpretation
of statutes and regulations with respect to how ``best price'' can
affect the availability of value based purchasing arrangements. Because
the statute was drafted more than 30 years ago, when such arrangements
were not prevalent in the market, it is understandable that such
interpretations by CMS to date regarding ``best price'' have been
limited to one ``best price'' per drug.
The Medicaid statute defines best price in relevant part to mean,
with respect to a single source drug or innovator multiple source drug
of a manufacturer, the lowest price available from the manufacturer
during the rebate period to any wholesaler, retailer, provider, health
maintenance organization, non-profit entity, or governmental entity
within the United States, with certain exclusions enumerated at
sections 1927(c)(1)(C)(i)(I) through (VI) of the Act. Historically, we
have interpreted this language to result in only one best price per
drug. The current Medicaid ``best price'' regulation at Sec. 447.505
generally tracks the statutory language, but reads in relevant part
that ``best price'' means, for a single source drug or innovator
multiple source drug, the lowest price available from the manufacturer
during the rebate period in any pricing structure (including capitated
payments), in the same quarter for which the AMP is computed (emphasis
added).
The current regulation is interpreted further in the preamble
language to the COD final rule and MDRP releases where we have
indicated that the lowest price available means ``actually realized''
by the manufacturer or the lowest price at which a manufacturer sells a
[covered outpatient drug]--that is, one lowest price available per
dosage form and strength of a drug. This interpretation results in
setting a best price that is either at a greatly reduced price or
possibly zero if a single dosage form or strength dispensed to one
patient is subject to a full or very large rebate under a VBP
arrangement. Thus, we need to reconcile the interpretation of the
statute in regulation, which currently contemplates that for any
quarter, the ``best price'' is a single price for each dosage form and
strength of a drug that represents the actual revenue realized by the
manufacturer for that drug--in any pricing structure offered by the
manufacturer (such as capitated payments)--with the realities of the
current evolving marketplace which contemplate that multiple prices
could be made available by the manufacturer for a particular drug based
on the drug's performance (such as the case with VBP arrangements that
use evidence or outcomes-based measures) in a quarter.
In that regard, because VBP and other innovative payment
arrangements sometimes result in various price points for a dosage form
and strength of a single drug or therapy being available in a quarter,
we are proposing to reflect this possibility in this proposed rule.
Specifically, we are proposing that a single drug may be available at
multiple price points, each of which may establish a ``best price''
based on the relevant or applicable VBP arrangement and patient
evidence-based or outcome-based measures.
We believe we can do this because we previously interpreted the
statutory definition of best price at Sec. 447.505(a) to reference the
best price ``in any pricing structure,'' contemplating the possibility
of various pricing structures, such as capitated payments. With the new
VBP pricing structures that are available in the marketplace, we
believe it is appropriate and reasonable to propose to further
interpret what pricing structures are available, and account for the
new VBP pricing structures, which may introduce the offering of a drug
at multiple price points. That is, we are proposing to expand our
interpretation of ``in any pricing structure'' and also the term
``price available'' by proposing that the price realized in a VBP
arrangement by the manufacturer when a measure is not met for a single
patient would not reset the best price for the drug in the quarter.
Rather, we propose that multiple prices could be realized by the
manufacturer and when a price is realized as a result of a VBP pricing
structure, multiple price points (price points as a result of a VBP and
price points absent a VBP) may be reported for one dosage form and
strength.
As an example, under VBP, the manufacturer would report a single
best price for the drug for the quarter for sales of the drug in that
quarter. In addition, the manufacturer would also report a distinct set
of ``best prices'' that would be available based on the range of
evidence-based or outcomes measures for that drug that are possible
under the VBP arrangement. As an example, the manufacturer could offer
varying rebates based on a patient's response after the drug is
administered. The calculated MDRP rebate due to the state using the VBP
best price would be a function of whether or not the Medicaid rebate is
being paid on a unit of a drug dispensed to a Medicaid patient that
participated in a VBP, and the level of rebate associated with that
patient's outcome. The rebate paid for that patient would only
represent the amount of rebate due to the state from the manufacturer
for that patient, not all patients. That is, the rebate would be
specific to that patient's outcome, as that price is the lowest price
available from the manufacturer based on that patient's outcomes.
Otherwise, the best price used in the Medicaid rebate formula would
mirror the lowest price available absent a VBP arrangement.
Therefore, we are proposing to further interpret the regulatory
language ``in any pricing structure'' to include VBP arrangements.
Then, we are proposing to interpret the statutory and regulatory phrase
``lowest price available'' as used in the definition of best price, to
permit, in the context of a VBP arrangement, to include a set of prices
at which a manufacturer makes a product available based on that pricing
structure. This being the case, we are proposing that the definition of
best price be expanded at Sec. 447.505(a) to provide that a lowest
price available from a manufacturer may include varying best price
points for a single dosage form and strength as a result of a VBP (as
defined at Sec. 447.502). We understand the operational challenges
this may bring to MDRP systems and that it will take us time to make
such system changes. We welcome comments on this proposal, its impact
on the MDRP, the commercial market, and its operational implications.
Specifically, we request comments regarding the potential impact of
these changes on supporting payment innovation and health care quality.
We also seek comments on steps which would be needed by manufacturers
and states to implement these Best Price changes, including how states
would track health outcomes for Medicaid beneficiaries to align with
the outcomes developed in a private market VBP.
Also, to provide consistency between AMP and best price, as we did
under the Medicaid Program; Covered Outpatient Drugs final rule with
comment (81 FR 5170), we are proposing to revise Sec. 447.505(d)(3) to
make it consistent with Sec. 447.504(f)(3). That is, Sec.
447.504(f)(3) provides that the manufacturer must adjust the AMP for a
rebate period if cumulative discounts, rebates, or other arrangements
subsequently adjust the prices actually realized to the extent that
such cumulative discounts, rebates, or other arrangements are not
excluded from the
[[Page 37294]]
determination of AMP by statute or regulation. We propose to add a
similar qualifying phrase at the end of Sec. 447.505(d)(3) to state
that the manufacturer must adjust the best price for a rebate period if
cumulative discounts, rebates or other arrangements subsequently adjust
the prices available, to the extent that such cumulative discounts,
rebates, or other arrangements are not excluded from the determination
of best price by statute or regulation. We believe this is consistent
with the requirement at section 1927(c)(1)(C)(ii)(I) of the Act, which
provides that best price shall be inclusive of cash discounts, free
goods that are contingent on any purchase requirement, volume discounts
and rebates, and therefore, best price must account for these to the
extent they are not excluded by statute or regulation.
C. Changes To Update Definitions To Reflect Recent Statutory Changes
Made by Medicaid Services Investment and Accountability Act of 2019
(Pub. L. 116-16, Enacted April 18, 2019), BBA 2018 and the Affordable
Care Act
1. Definitions (Sec. 447.502)
a. Innovator Multiple Source Drug
The Medicaid Services Investment and Accountability Act of 2019
clarified the definition of innovator multiple source drug at section
1927(k) of the Act by removing the phrase ``an original new drug
application'' and inserting ``a new drug application,'' removing ``was
originally marketed'' and inserting ``is marketed,'' and inserting, ``,
unless the Secretary determines that a narrow exception applies (as
described in Sec. 447.502 of title 42, Code of Federal Regulations (or
any successor regulation))'' before the period. Section
1927(k)(7)(A)(ii) of the Act now defines innovator multiple source drug
to mean a multiple source drug that is marketed under a new drug
application approved by the Food and Drug Administration (FDA), unless
the Secretary determines that a narrow exception applies (as described
in Sec. 447.502 (or any successor regulation)). To align the
regulatory definition with the definition in the statute, as clarified
by the Medicaid Services Investment and Accountability Act of 2019, we
are proposing to define innovator multiple source drug in Sec. 447.502
as a multiple source drug, including an authorized generic drug, that
is marketed under a new drug application (NDA) approved by FDA, unless
the Secretary determines that a narrow exception applies (as described
in this section or any successor regulation). It also includes a drug
product marketed by any cross-licensed producers, labelers, or
distributors operating under the NDA and a covered outpatient drug
approved under a biologics license application (BLA), product license
application (PLA), establishment license application (ELA) or
antibiotic drug application (ADA).
b. Line Extension and New Formulation
Section 1927(c)(2)(C) of the Act defines line extension to mean,
for a drug, a new formulation of the drug, such as an extended release
formulation, but does not include an abuse-deterrent formulation of the
drug (as determined by the Secretary), regardless of whether such abuse
deterrent formulation is an extended release formulation. As discussed
earlier in section I.E. of this proposed rule, we proposed to define
line extension in the February 2, 2012 proposed rule, but did not
finalize a definition in the COD final rule or the April 1, 2019 final
rule. We reiterated in the April 1, 2019 final rule that manufacturers
are to rely on the statutory definition of line extension at section
1927(c)(2)(C) of the Act, and where appropriate are permitted to use
reasonable assumptions in their determination of whether their drug
qualifies as a line extension (81 FR 5265).
After several years of experience with manufacturers self-reporting
their line extensions, and numerous inquiries from manufacturers
regarding the identification of drugs as line extensions, we have noted
inconsistency among manufacturers in their identification of drugs as
line extensions. In addition, we are concerned that manufacturers may
have a financial incentive to be underinclusive in their identification
of drugs as line extensions because a drug identified as a line
extension may be subject to a higher rebate. We note that if
manufacturers underreport their line extensions, rebates may be
calculated incorrectly and underpaid.
We believe the line extension provision was codified in statute to
assure that manufacturers are not circumventing rebate liability by
creating a line extension drug and avoiding inflation-based additional
rebates. In order to ensure that section 1927(c)(2)(C) of the Act is
fully implemented and the universe of line extensions is identified
consistent with our understanding of Congressional intent, we are
proposing to provide further interpretation of the statute in this
proposed rule.
As an initial matter, we are proposing that only the initial single
source drug or innovator multiple source drug (the initial brand name
listed drug) must be an oral solid dosage form. In the 2012 proposed
rule (77 FR 5338, 5339), we proposed that both the initial brand name
drug and the line extension drug had to be an oral solid dosage form.
However, as noted above, we did not finalize a regulatory definition of
line extension, and instructed manufacturers to make ``reasonable
assumptions'' regarding whether a drug is a line extension (81 FR
5265). The statute states that the alternative calculation must be
performed in the case of a drug that is a line extension of a single
source drug or an innovator multiple source drug that is an oral solid
dosage form. Upon further evaluation of this statutory language, we
believe that the statutory text can be reasonably construed to provide
that only the initial single source drug or innovator multiple source
drug must be an oral solid dosage form. We believe this interpretation
is appropriate because the alternative construction (requiring both the
line extension and the initial single source drug or innovator multiple
source drug to be an oral solid dosage form) may inappropriately limit
the universe of line extension drugs in a manner which would allow a
manufacturer to circumvent rebate liability when creating a line
extension and to potentially avoid inflation-based additional rebates,
in cases where such rebates should apply. Therefore, we are proposing
that when determining whether a drug is a line extension, only the
initial single source drug or innovator multiple source drug must be an
oral solid dosage form. That is, we are proposing that the line
extension of the initial brand name listed drug does not need to be an
oral solid dosage form. We believe this is consistent with the
statutory language and will assist in appropriately identifying drugs
that may be line extension drugs. Therefore, we are proposing to amend
Sec. 447.509(a)(4)(i) and (ii) to refer to ``a drug that is a line
extension of a single source drug or an innovator multiple source drug
provided that the initial single source drug or innovator multiple
source drug is an oral solid dosage form,'' and Sec. Sec.
447.509(a)(4)(i)(A) and (a)(4)(ii)(A) to refer to ``a single source
drug or an innovator multiple source drug'' in the regulatory text that
describes the alternative rebate calculation.
In response to requests to provide more specific guidance on how to
identify a line extension drug, we are proposing to define ``line
extension'' and ``new formulation'' at Sec. 447.502. Specifically, we
are proposing that as provided in section 1927(c)(2)(C) of the
[[Page 37295]]
Act, the term ``line extension'' means, for a drug, a new formulation
of the drug, but does not include an abuse-deterrent formulation of the
drug (as determined by the Secretary).
Additionally, we are proposing to define ``new formulation'' to
mean, for a drug, any change to the drug, provided that the new
formulation contains at least one active ingredient in common with the
initial brand name listed drug. New formulations, (for the purpose of
determining if a drug is a line extension) would not include abuse
deterrent formulations but would include, but would not be limited to:
Extended release formulations); changes in dosage form, strength, route
of administration, ingredients, pharmacodynamics, or pharmacokinetic
properties; changes in indication accompanied by marketing as a
separately identifiable drug (for example, a different NDC); and
combination drugs, such as a drug that is a combination of two or more
drugs or a drug that is a combination of a drug and a device. We are
requesting comments about whether a drug approved with a new indication
that is not separately identifiable should be considered a new
formulation and, if so, how such a drug could be identified in DDR for
purposes of calculating the alternative URA.
We note that under Sec. 447.509(a)(4)(iii), manufacturers are
required to calculate the alternative URA if the manufacturer of the
line extension also manufactures the initial brand name listed drug or
has a corporate relationship with the manufacturer of the initial brand
name listed drug. Although a drug may satisfy the definition of line
extension, and should therefore be identified in DDR as a line
extension, a manufacturer is not required to calculate the alternative
URA unless the manufacturer of the line extension also manufactures, or
has a corporate relationship with the manufacturer of the initial brand
name listed drug.
Based on the definition of line extension that was included in the
Affordable Care Act, we believe that the statute gives us discretion
and authority to interpret the term ``line extension'' broadly. We are
expressly soliciting comments on our proposed definitions of ``line
extension'' and ``new formulation,'' specifically on whether these
terms should be interpreted more narrowly. Moreover, if stakeholders
believe that a narrower interpretation is appropriate, we are
soliciting comments on how to identify those drugs that constitute a
line extension and a new formulation to apply the alternative URA
calculation when required by statute.
i. Combination Drugs
The statutory definition of line extension does not expressly
exclude combination drugs, such as a drug that is a combination of two
or more drugs or a drug that is a combination of a drug and a device,
and, as noted previously in this rule, our proposed definition of new
formulation includes combination drugs provided that the new
formulation contains at least one active ingredient in common with the
initial brand name listed drug.
As noted in the COD final rule (81 FR 5197, 5265 through 5267), we
received numerous comments regarding our proposal in the February 2,
2012 proposed rule to include combination drugs in the definition of
line extension. In particular, commenters were concerned that our
proposal required sharing of proprietary pricing information with
competitors. We believe that the commenters' concerns have been
mitigated by Sec. 447.509(a)(4)(iii), which requires the additional
rebate to be calculated only if the manufacturer of the line extension
also manufactures the initial brand name listed drug or has a corporate
relationship with the manufacturer of the initial brand name listed
drug. Therefore, we are clarifying that while our proposed definition
of new formulation includes combination drugs, the alternative URA
calculation is only required under Sec. 447.509(a)(4)(iii) for a
rebate period if the manufacturer of the line extension also
manufactures the initial brand name listed drug or has a corporate
relationship with the manufacturer of the initial brand name listed
drug.
Furthermore, we note that in the event that the initial brand name
listed drug is a combination drug, neither the statutory definition of
line extension nor our proposed definitions of line extension or new
formulation exclude new formulations of combination drugs. For example,
if an initial brand name listed drug is a combination drug consisting
of a previously approved drug plus a new molecular entity, and FDA
subsequently approves a new drug consisting only of the new molecular
entity, then we would consider the new drug to be a new formulation of
the initial brand name listed drug because it would constitute a change
to the initial brand name listed drug and contains at least one active
ingredient in common with the initial brand name listed drug.
As stated previously, we believe we have the discretion and
authority to include a broad range of drugs as a line extension,
including combination drugs. However, we are also aware that some
combination drugs appear to be slightly different than an existing drug
while other combination drugs are very different drugs than the initial
brand name listed drug. For example, if a new combination drug contains
a new molecular entity in combination with a previously approved drug,
the resultant new combination may appear to be very different from the
initial brand name listed drug, however, we believe that it is a new
formulation of an initial brand name listed drug. Conversely, we
believe that a new combination of two previously approved drugs, or a
combination of a previously approved drug and a non-drug product (for
example, a dietary supplement or a device), may not be a significant
alteration even though it also is a new formulation of an initial brand
name listed drug. Given that different stakeholders have differing
thoughts on what constitutes a new formulation of an initial brand name
listed drug, and CMS is attempting to provide a reasonable
interpretation of the statute to define or describe what constitutes a
change that should be considered a new formulation, we are soliciting
comments that may provide a way to define and identify those
combination drugs that should be identified as line extensions while
excluding those combination drugs that should not be so identified.
ii. New Strengths
In the COD final rule (81 FR 5267), we indicated that we do not
consider new strengths of the same formulation of the initial brand
name listed drug to be a line extension because section 1927(c)(2)(C)
of the Act does not expressly contemplate that a new strength is a line
extension. As noted previously in this proposed rule though, we did not
finalize a regulatory definition of line extension, and instructed
manufacturers to make ``reasonable assumptions'' regarding whether a
drug is a line extension. As noted in section I.E. of this proposed
rule, we are proposing to interpret the definition of line extension
more broadly, which includes proposing a much broader definition of new
formulation. The statutory definition of line extension does not
expressly exclude a new strength of a drug, and we believe a change in
strength is a relatively simple modification to a currently marketed
product. Furthermore, changing the strength of an initial brand name
listed drug allows a manufacturer to establish a new base date AMP,
thereby avoiding inflation
[[Page 37296]]
based rebate liability, which may incentivize a manufacturer to change
the strength of a drug that is losing its exclusivity or patent
protection to prolong the lifecycle of the drug, preventing money
saving generic substitution. Therefore, consistent with the intent of
the statute, we believe that a new strength of a drug, produced or
distributed at a later time than the initial strength(s), should be
identified as a line extension and made subject to the line extension
alternative URA calculation. Therefore, as noted in section I.E. of
this proposed rule, our proposed definition of new formulation includes
changes in strength.
iii. New Indication
In the February 2, 2012 proposed rule, we proposed that a drug
approved with a new indication for an already approved drug would be a
line extension (77 FR 5323). We received several comments stating that
the proposal was not feasible because the approval of a new indication
for an already approved drug may not result in a different drug product
and it would not be logical that a drug is a line extension of itself.
Additional comments noted that it is not possible to apply the
alternative line extension calculation to rebate invoices for an NDC
only for those claims that were prescribed the newly approved
indication. We agree that if following the approval of a new indication
a manufacturer markets its drug in such a way that it is not a
separately identifiable drug product the alternative URA calculation
would not apply. However, if following the approval of a new indication
the manufacturer markets the drug in such a way that it is a separately
identifiable drug product, we are proposing that the alternative URA
calculation would apply. Thus, as discussed previously in this proposed
rule, our proposed definition of new formulation includes changes in
indication accompanied by marketing as a separately identifiable drug
(for example, a different NDC).\12\ We are requesting comments about
whether a drug approved with a new indication that is not separately
identifiable should be considered a new formulation and, if so, how
such a drug could be identified in DDR for purposes of calculating the
alternative URA.
---------------------------------------------------------------------------
\12\ An NDC comprises three segments. The first segment is a
labeler code, associated with the labeler, the second segment is a
product code, which in association with a specific labeler code
identifies the product, and the third segment is a package code,
which, in association with the preceding segments, identifies the
package size and type. For purposes of reporting to the MDRP, FDA's
10-digit NDC must be converted to an 11-digit NDC. The 9-digit NDC
cited here is a combination of the labeler code plus the product
code. FDA requirements for an NDC are at 21 CFR 207.33.
---------------------------------------------------------------------------
We believe that Congress included the alternative URA calculation
for a line extension in order to address changes to a drug that allow a
manufacturer to avoid inflation-based additional rebates by
establishing a new market date and base date AMP for the drug. We agree
with the comments suggesting that if there is a change to a drug but
that drug is not separately identifiable, then it is not feasible for
the manufacturer to identify the drug as a line extension and perform
an alternative URA calculation.
c. Oral Solid Dosage Form
Oral solid dosage form is defined at Sec. 447.502 to mean
capsules, tablets, or similar drugs products intended for oral use as
defined in accordance with FDA regulation at 21 CFR 206.3 that defines
solid oral dosage form. As we now have more experience reviewing and
dealing with the line extension provisions from the Affordable Care
Act, we believe that manufacturers may not be interpreting the term
oral solid dosage form consistently. To mitigate any potential
confusion, we believe that manufacturers and other stakeholders would
benefit from a more detailed definition. In this proposed rule, we are
proposing to modify the definition of oral solid dosage form.
In the COD final rule (81 FR 5198), CMS interpreted an oral route
of administration as any drug that is intended to be taken by mouth.
Because there is potential confusion about whether a dosage form must
be swallowed, or otherwise enter the gastrointestinal tract in order to
be considered an orally administered dosage form, we are proposing to
interpret that an oral form of a drug is one that enters the oral
cavity. This includes, but is not limited to, a tablet or film
administered sublingually and a drug that is orally inhaled. We believe
that this interpretation provides greater clarity to stakeholders
regarding what constitutes an oral form of a drug.
Additionally, we believe that manufacturers may not be interpreting
the term solid dosage form consistently. To mitigate any potential
confusion, we are proposing to interpret that a solid dosage form is a
dosage form that is neither a gas nor a liquid.
The FDA regulation at 21 CFR 206.3 defines the term ``solid oral
dosage form'' for the purpose of identifying drugs for which a code
imprint is required to permit identification of the product. The phrase
``capsules, tablets or similar drugs products'' may not encompass the
range of dosage forms that we believe should be considered for the
application of the line extension provision in the Affordable Care Act.
For example, a sublingual film is an oral solid dosage form; however,
because of the physical attributes of the dosage form, there may not be
a requirement to imprint an identifying code on the dosage form.
Another example of an oral solid dosage form is a powdered drug
administered by oral inhalation. Therefore, we are proposing to modify
the definition of oral solid dosage form at Sec. 447.502 to read that
it is an orally administered dosage form that is not a liquid or gas at
the time the drug enters the oral cavity. Additionally, an oral solid
dosage form that incorporates a medical device would not be exempt from
this definition solely due to the addition of a device to the oral
solid dosage form. For example, if a manufacturer adds a device to a
tablet, the new drug would not be exempt from being a line extension
solely due to the addition of a device to the tablet.
d. Multiple Source Drug
The Medicaid Services Investment and Accountability Act of 2019
clarified the definition of multiple source drug in section 1927(k) of
the Act by removing ``(not including any drug described in paragraph
(5))'' and inserting ``, including a drug product approved for
marketing as a non-prescription drug that is regarded as a covered
outpatient drug under paragraph (4),''. Section 1927(k)(7)(A)(i) of the
Act now provides that the term multiple source drug means, with respect
to a rebate period, a covered outpatient drug, including a drug product
approved for marketing as a non-prescription drug that is regarded as a
covered outpatient drug under section 1927(k)(4) of the Act for which
there is at least 1 other drug product which: Is rated as
therapeutically equivalent (under FDA's most recent publication of
``Approved Drug Products with Therapeutic Equivalence Evaluations''),
except as provided in section 1927(k)(7)(B) of the Act, is
pharmaceutically equivalent and bioequivalent, as defined in section
1927(k)(7)(C) of the Act and as determined by FDA, and is sold or
marketed in the United States during the period.
We are proposing to revise the definition of multiple source drug
at Sec. 447.502 to align with the statutory definition. Specifically,
we are proposing to revise the definition of multiple source drug to
mean, for a rebate period, a covered outpatient drug, including a drug
product approved for marketing as a non-prescription drug that is
regarded as a covered outpatient
[[Page 37297]]
drug under section 1927(k)(4) of the Act, for which there is at least 1
other drug product which meets all the following criteria:
Is rated as therapeutically equivalent (under the FDA's
most recent publication of ``Approved Drug Products with Therapeutic
Equivalence Evaluations'' which is available at http://www.accessdata.fda.gov/scripts/cder/ob/).
Except as provided at section 1927(k)(7)(B) of the Act, is
pharmaceutically equivalent and bioequivalent, as defined at section
1927(k)(7)(C) of the Act and as determined by the FDA.
Is sold or marketed in the United States during the
period.
e. Single Source Drug
The Medicaid Services Investment and Accountability Act of 2019
clarified the definition of single source drug in section 1927(k) of
the Act by removing the phrase ``an original new drug application'' and
inserting ``a new drug application'', inserting ``, including a drug
product approved for marketing as a non-prescription drug that is
regarded as a covered outpatient drug under paragraph (4),'' after
``covered outpatient drug'', inserting ``unless the Secretary
determines that a narrow exception applies (as described in Sec.
447.502 of title 42, Code of Federal Regulations or any successor
regulation))'' after ``under the new drug application'' and adding
language to specify that such term also includes a covered outpatient
drug that is a biological product licensed, produced, or distributed
under a biologics license application approved by the FDA. Section
1927(k)(7)(A)(iv) of the Act now defines a single source drug to mean a
covered outpatient drug, including a drug product approved for
marketing as a non-prescription drug that is regarded as a covered
outpatient drug under section 1927(k)(4) of the Act, which is produced
or distributed under a new drug application approved by the FDA,
including a drug product marketed by any cross-licensed producers or
distributors operating under the new drug application unless the
Secretary determines that a narrow exception applies (as described in
Sec. 447.502 or any successor regulation) and the term includes a
covered outpatient drug that is a biological product licensed,
produced, or distributed under a biologics license application approved
by the FDA. To align the regulatory definition with the definition in
the statute at section 1927(k)(7)(A)(iv) of the Act, as clarified by
the Medicaid Services Investment and Accountability Act of 2019, we are
proposing to revise the regulatory definition of single source drug at
Sec. 447.502. We are proposing to define single source drug in Sec.
447.502 to mean a covered outpatient drug, including a drug product
approved for marketing as a non-prescription drug that is regarded as a
covered outpatient drug under section 1927(k)(4) of the Act, which is
produced or distributed under a new drug application approved by the
FDA, including a drug product marketed by any cross-licensed producers
or distributors operating under the new drug application unless the
Secretary determines that a narrow exception applies (as described in
Sec. 447.502 or any successor regulation) and includes a covered
outpatient drug that is a biological product licensed, produced, or
distributed under a biologics license application approved by the FDA.
e. CMS-Authorized Supplemental Rebate Agreements
States may enter into separate or supplemental drug rebate
agreements as long as such agreements achieve drug rebates equal to or
greater than the drug rebates set forth under the national drug rebate
agreement. See section 1927(a)(1) of the Act. CMS approval to enter
directly into such agreements with manufacturers is required under
section 1927(a)(1) of the Act, and thus, states are required to use the
state plan amendments process as a means to seek CMS authorization.
Supplemental rebates must be considered a reduction in the amount
expended under the State plan in the quarter for medical assistance as
provided at section 1927(b)(1)(B) of the Act. See program guidance at
https://www.medicaid.gov/federal-policy-guidance/downloads/smd091802.pdf.
The Affordable Care Act revised section 1927(b)(1)(A) of the Act to
require that manufacturers provide rebates for covered outpatient drugs
dispensed to individuals enrolled with a Medicaid MCO when the
organization is responsible for coverage of such drugs. At that time,
states had to re-assess whether or not to directly collect supplemental
rebates related to covered outpatient drugs dispensed to Medicaid
managed care enrollees if the MCO was responsible for such drug
coverage. Some states required their MCOs to collect and share
supplemental rebates under the CMS-authorized supplemental rebate
agreement, while other states permitted their MCOs to negotiate their
own rebates with manufacturers outside of the CMS-authorized
supplemental rebate agreement, allowing the MCO to keep the savings
generated by the supplemental rebates.
The Affordable Care Act amendment to section 1927(b)(1)(A) of the
Act also prompted some manufacturers to make assumptions with regard to
AMP and best price calculations. Specifically, manufacturers made
assumptions that all supplemental rebates paid by manufacturers for
prescriptions dispensed to Medicaid managed care enrollees should be
excluded from the manufacturer's determination of AMP and best price.
That included those rebates paid directly to Medicaid MCOs, even if
those rebates were not a result of a CMS-authorized supplemental rebate
agreement, and therefore, not shared with the state or eventually used
to offset state drug expenditures prior to claiming Federal financial
participation (FFP) from the federal government. Since CMS-authorized
supplemental rebate agreement is not defined as it is used at
Sec. Sec. 447.504(c)(19) and (e)(9) and 447.505(c)(7), manufacturers
assumed that any supplemental rebates paid based on dispensing to
Medicaid managed care enrollees are always a part of a CMS-authorized
supplemental rebate agreement with the states. However, rebates paid to
Medicaid MCOs may be paid by manufacturers that are not part of a CMS-
authorized rebate agreement and are not shared with the state to offset
drug expenditures prior to claiming FFP. Therefore, in order to clarify
that such rebates paid by manufacturers are not part of a state's CMS-
authorized supplemental rebate agreement, we propose to define CMS-
authorized supplemental rebate agreement to mean an agreement that is
approved through a state plan amendment (SPA) by CMS, which allows a
state to enter into single and/or multi-state supplemental drug rebate
arrangements that generate rebates that are at least as large as the
rebates set forth in the Secretary's national rebate agreement with
drug manufacturers.
Furthermore, and consistent with section 1927(b)(1)(B) of the Act
which provides that the amounts received by a State under subsection
(a)(1) (Federal rebates) or an agreement under (a)(4) (the existing
state rebates) in any quarter shall be considered to be a reduction in
the amount expended under the State plan in the quarter for medical
assistance for purposes of section 1903(a)(1) of the Act. The proposed
definition further states that the revenue from these rebates must be
paid directly to the state and be used by the state to offset a state's
drug expenditures resulting in shared savings with the Federal
government.
[[Page 37298]]
D. Exclusion of Certain Manufacturer Sponsored Patient Assistance
Programs (``PBM Accumulator Programs'') From Determination of Best
Price (Sec. 447.505) and Average Manufacturer Price (AMP) (Sec.
447.504)
Manufacturers participating in the MDRP are required to report
certain pricing information to the Secretary, including a covered
outpatient drug's best price and AMP. Best price is defined at section
1927(c)(1)(C) of the Act to mean, with respect to a single source or
innovator multiple source drug of a manufacturer (including the lowest
price available to any entity for any such drug of a manufacturer that
is sold under a new drug application approved under section 505(c) of
the Federal, Food, Drug and Cosmetic Act), the lowest price available
from the manufacturer during the rebate period to any wholesaler,
retailer, provider, health maintenance organization, nonprofit entity,
or government entity within the United States, subject to certain
exclusions. Section 1927(c)(1)(C)(ii) of the Act further defines the
term best price to be inclusive of cash discounts, free goods that are
contingent on any purchase requirement, volume discounts, and rebates
(other than rebates under this section). The definition of best price
is further defined at Sec. 447.505(a) and includes the lowest price
available from the manufacturer during the rebate period to any
provider, which is defined to mean a hospital, HMO, MCO, or entity that
provides coverage or services to individuals for illnesses or injuries
or providers services or items in the provision of healthcare.
Paragraph (b) further indicates that best price includes all prices,
including applicable discounts, rebates, or other transactions that
adjust prices either directly or indirectly to the best price eligible
entities in paragraph (a).
We have learned that some health plans (which meet the definition
of provider when determining best price) are being instructed or
encouraged by their pharmacy benefit managers (PBMs) to apply
manufacturer sponsored patient assistance programs, such as patient
copay assistance programs, to the benefit of the plan, instead of
entirely to the patient. (Note that Medicaid patients are not eligible
for these manufacturer patient assistance programs, but the
administration of these programs by commercial health plans and PBMs
can affect the rebates that the Medicaid program receives from the
manufacturer-sponsor of these programs.)
For example, certain PBMs have instructed health plans to not allow
the manufacturer copay assistance to be applied towards a patient's
plan deductible for a brand name drug not on a plan's formulary. PBMs
contend that such programs steer consumers towards more expensive
medications when there may be more cost saving options, such as generic
substitution. Therefore, PBMs offer health plans that are commonly
referred to as PBM accumulator programs and tout them as cost saving
measures. For instance, using a copayment assistance card program as an
example, instead of applying the manufacturer sponsored patient
assistance program in a manner that bestows the entire benefit of the
program to the patient or consumer, and ensures no contingency on a
purchase requirement, as applicable, the PBM (on behalf of the plan)
identifies when a copayment card is used by a patient and adjusts the
beneficiary's deductible only in instances when the out-of-pocket
contribution is made by the beneficiary. As a result, the manufacturer
assistance does not accrue towards a patient's deductible and the
patient sometimes does not realize this until the manufacturer
copayment assistance runs out and the patient receives a significantly
larger bill for the drug. This results in the health plan delaying the
application of its plan benefit to the patient to the detriment of the
patient or consumer, thus generating savings for the plan. We provide
an illustration below:
Example:
Assume:
$2500--Drug cost
$2500--Patient Deductible
$10,000--Copayment Assistance Program Maximum
Copay Assistance Program With No PBM Accumulator Program
In this scenario, the manufacturer's copayment assistance accrues
to the benefit of the patient because the patient has a high
deductible, which is what we believe the manufacturer intended. In such
cases, it is clear that the manufacturer's program is directly
assisting the patient's copayment/deductible costs.
Table 1--Copay Assistance Program With No PBM Accumulator Program
----------------------------------------------------------------------------------------------------------------
Jan Feb Mar Apr May June
----------------------------------------------------------------------------------------------------------------
Plan Pays.................... $0 $2000........... $2000 $2000 $2000 $2000
Patient Pays................. 25 25.............. 25 25 25 25
Manufacturer Pays............ 2475 475 deductible 475 475 475 475
reached.
Manufacturer
only pays $475.
----------------------------------------------------------------------------------------------------------------
Copay Assistance Program With PBM Accumulator Program
In the PBM accumulator scenario, the PBM does not apply the
manufacturer's copayment assistance to the deductible of the patient
thus delaying the patient satisfying his/her deductible, which benefits
the health plan. The patient usually is not aware of the change until
he/she is subject to a larger cost share of the drug when the
manufacturer's support copay benefit maximum is reached (see May
column). At that time, the patient receives a significantly a larger
bill.
Table 2--Copay Assistance Program With PBM Accumulator Program
----------------------------------------------------------------------------------------------------------------
Jan Feb Mar Apr May June
----------------------------------------------------------------------------------------------------------------
Plan Pays.................... $0 $0 $0 $0 $0.............. $2000
Patient Pays................. 25 25 25 25 2400............ 500
Manufacturer Pays............ 2475 2475 2475 2475 100 manufacturer 0
copay benefit
max. reached.
----------------------------------------------------------------------------------------------------------------
[[Page 37299]]
As demonstrated by the example above, the health plan is benefiting
from the manufacturer sponsored copay assistance program instead of the
patient (consumer). However, manufacturers, in these instances, claim
they are not aware of when these practices by the health plans take
place, and therefore, make reasonable assumptions that their discount
programs meet the criteria at Sec. 447.505(c) that exclude such
programs from best price.
Specifically, manufacturers make reasonable assumptions that their
programs meet the best price exclusions listed in Sec. 447.505(c)(8)
through (12) which provide:
Manufacturer-sponsored drug discount card programs, but
only to the extent that the full value of the discount is passed on to
the consumer and the pharmacy, agent, or other entity does not receive
any price concession. Sec. 447.505(c)(8).
Manufacturer coupons to a customer redeemed by a consumer,
agent, pharmacy, or another entity acting on behalf of the
manufacturer; but only to the extent that the full value of the coupon
is passed on to the consumer, and the pharmacy, agent, or other entity
does not receive any price concession. Sec. 447.505(c)(9).
Manufacturer copayment assistance programs, to the extent
that the program benefits are provided entirely to the patient and the
pharmacy, agent, or other entity does not receive any price concession.
Sec. 447.505(c)(10).
Manufacturer-sponsored patient refund or rebate programs,
to the extent that the manufacturer provides a full or partial refund
or rebate to the patient for out-of-pocket costs and the pharmacy,
agent or other entity does not receive any price concession. Sec.
447.505(c)(11).
Manufacturer-sponsored programs that provide free goods,
including but not limited to vouchers and patient assistance programs,
but only to the extent that the voucher or benefit of such program is
not contingent on any other purchase requirement; the full value of the
voucher or benefit of such program is passed on to the consumer; and
the pharmacy, agent or other entity does not receive any price
concession. Sec. 447.505(c)(12).
However, we understand from some manufacturers that they do not
monitor or place parameters around how the benefits of their
manufacturer sponsored assistance programs are applied when an
individual has health plan coverage. Therefore, we are proposing to
revise these paragraphs to provide expressly that the exclusions
discussed above apply only to the extent the manufacturer ensures the
full value of the assistance or benefit is passed on to the consumer or
patient. We believe manufacturers have the ability to establish
coverage criteria around their manufacturer assistance programs to
ensure the benefit goes exclusively to the consumer or patient. We note
that nothing in this proposed change should be construed to contradict
any OIG guidance. We welcome comments on this proposal.
The current list of prices excluded from best price as noted above
also apply to AMP as specified in Sec. 447.504(c) and (e). As stated
in the COD final rule, in order to provide consistency between the AMP
and best price sections, where applicable, and to help with
streamlining and clarifying a manufacturer's price reporting
responsibilities, the same methodology is applied to AMP (81 FR 5253),
and for the same reasons already discussed above, we are making a
corresponding proposal with respect to these exclusions in the context
of AMP.
Accordingly, we are proposing to revise the determination of best
price Sec. 447.505 to add a requirement that manufacturers ensure that
the benefits of their assistance programs as provided at Sec.
447.505(c)(8) through (12) are provided entirely to the consumer and
are proposing corresponding changes to the AMP regulations at Sec.
447.504(c)(25) through (29) and (e)(13) through (17).
E. Authorized Generic Drugs (Sec. Sec. 447.502, 447.504, 447.506)
The Continuing Appropriations Act of 2020, and Health Extenders Act
of 2019 (Health Extenders Act) made changes to section 1927(k) of the
Act, revising how manufacturers calculate the AMP for a covered
outpatient drug for which the manufacturer permits an authorized
generic to be sold. Manufacturers that approve, allow, or otherwise
permit any drug to be sold under the manufacturer's own new drug
application approved under section 505(c) of the Federal Food, Drug,
and Cosmetic Act shall no longer include those sales of these
authorized generics in the calculation of AMP.
Specifically, section 1603 of Health Extenders Act, which is
titled--Excluding Authorized Generic Drugs from Calculation of Average
Manufacturer Price for Purposes of the Medicaid Drug Rebate Program;
Excluding Manufacturers from Definition of Wholesaler, amended:
Section 1927(k)(1)(C) of the Act to replace the term
``inclusion'' with ``exclusion'' in the title and further amended
subparagraph (C) to read (emphasis added)--In the case of a
manufacturer that approves, allows, or otherwise permits any drug of
the manufacturer to be sold under the manufacturer's new drug
application approved under section 505(c) of the Federal Food, Drug,
and Cosmetic Act, such term shall be exclusive of the average price
paid for such drug by wholesalers for drugs distributed to retail
community pharmacies.
The definition of wholesaler at section 1927(k)(11) of the
Act to remove references to manufacturers from the definition of
wholesaler.
The amendments to section 1927 of the Act authorized under section
1603 of the Health Extenders Act are effective October 1, 2019.
Therefore, manufacturers must reflect the changes to the calculation of
their AMPs for rebate periods beginning October 1, 2019 (reported to
CMS no later than 30 days after the end of the rebate period).
Furthermore, in accordance with 42 CFR 447.510(b), manufacturers have
12 quarters from the quarter in which the data were due to revise AMP,
if necessary.
Therefore, in accordance with the statutory amendments to section
1927(k)(1)(C) and (k)(11) of the Act described above, we are proposing
to revise Sec. Sec. 447.502, 447.504, and 447.506 as they apply to AMP
and authorized generic sales as follows:
We are proposing to revise Sec. 447.502 to change the
definition of wholesaler to reflect the revised statutory definition of
wholesaler at section 1927(k)(11) of the Act. Wholesaler has been
revised to remove any reference to ``manufacturer(s)'' consistent with
the changes to the definition of wholesaler made by section 1603(b) of
the Health Extenders Act. We are proposing the term ``Wholesaler'' to
mean a drug wholesaler that is engaged in wholesale distribution of
prescription drugs to retail community pharmacies, including but not
limited to repackers, distributors, own-label distributors, private-
label distributors, jobbers, brokers, warehouses (including
distributor's warehouses, chain drug warehouses, and wholesale drug
warehouses), independent wholesale drug traders, and retail community
pharmacies that conduct wholesale distributions.
Since the definition of wholesaler at section 1927(k)(11)
of the Act no longer includes manufacturers, we further propose to
remove from the list of sales, nominal price sales, and associated
discounts, rebates, payments or other financial transactions included
in AMP, sales to other manufacturers who act as wholesalers for drugs
distributed to
[[Page 37300]]
retail community pharmacies at Sec. 447.504(b)(2). The nominal price
sales, and associated discounts, rebates, payments or other financial
transactions included in AMP in accordance with Sec. 447.504(d) (AMP
for 5i drugs that are not generally dispensed through retail community
pharmacies) do not change because the statute at 1927(k)(1)(C) only
speaks to authorized generic sales from the manufacturer to wholesalers
that distribute to retail community pharmacies.
We propose to revise Sec. 447.506, which provides
specific requirements to manufacturers regarding the treatment of
authorized generic drug sales when determining AMP and best price. For
purposes of those calculations, the current regulation defines primary
manufacturer as the manufacturer that holds the NDA of the authorized
generic drug and the secondary manufacturer as the manufacturer that is
authorized by the primary manufacturer to sell the drug, but does not
hold the NDA. The regulation further requires that the primary
manufacturer must include in its calculation of AMP its sales of
authorized generic drugs that have been sold or licensed to a secondary
manufacturer, acting as a wholesaler for drugs distributed to retail
community pharmacies, or when the primary manufacturer holding the NDA
sells directly to a wholesaler. The Health Extenders Act revised the
definition of wholesaler at 1927(k)(11) of the Act by removing
``manufacturer'' and revised the determination of AMP at section
1927(k)(1)(C) of the Act by replacing the term ``inclusion'' with
``exclusion'' in the title and further amended paragraph (C) to state,
in the case of a manufacturer that approves, allows, or otherwise
permits any drug of the manufacturer to be sold under the
manufacturer's new drug application approved under section 505(c) of
the Federal Food, Drug, and Cosmetic Act, such term shall be exclusive
of the average price paid for such drug by wholesalers for drugs
distributed to retail community pharmacies. Therefore, we are proposing
to revise Sec. 447.506(b) to replace the word ``Inclusion'' with
``Exclusion'' in the first sentence and replace the second sentence in
its entirety to state that the primary manufacturer (as defined at
Sec. 447.506(a)) must exclude from its calculation of AMP any sales of
authorized generic drugs to wholesalers for drugs distributed to retail
community pharmacies when reporting the AMP of the brand name drug.
More specifically, we are proposing that a separate AMP is
determined for the brand drug, which shall be exclusive of any
authorized generic sale, and a separate AMP shall be generated for the
authorized generic. As discussed previously in this proposed rule,
typically, an authorized generic is a product that a manufacturer
(primary manufacturer) allows another manufacturer (secondary
manufacturer) to sell under the primary manufacturer's FDA approved New
Drug Application (NDA) but under a different National Drug Code (NDC)
number. The authorized generic is typically the primary manufacturer's
brand product offered at a lower price point. Primary manufacturers may
sell the authorized generic product to the secondary manufacturer they
are allowing to sell an authorized generic of their brand product, and
such sales are commonly referred to as transfer sales. Primary
manufacturers have included those transfer sales in the determination
of the brand product's AMP. Under the amendments made to section 1927
of the Act, a primary manufacturer that sells the authorized generic
version of the brand drug to the secondary manufacturer can no longer
include the price of the transfer sale of the authorized generic to the
secondary manufacturer in its calculation of AMP for the brand product.
The exclusion of these transfer sales from the primary manufacturer's
brand drug AMP will likely result in higher AMPs for the brand drugs
and a potential increase to a manufacturer's Medicaid drug rebates to
states. To assist manufacturers, we provided guidance in Manufacturer
Release #111 and Manufacturer Release #112. In turn, we received
inquiries as to what is meant by ``In the case of a manufacturer that
approves, allows, or otherwise permits any drug of the manufacturer to
be sold under the manufacturer's new drug application approved under
section 505(c) of the Federal Food, Drug, and Cosmetic Act, such term
shall be exclusive of the average price paid for such drug by
wholesalers for drugs distributed to retail community pharmacies.''
Specifically, we received questions regarding when a primary
manufacturer itself, or an affiliate of the manufacturer is also
producing the authorized generic, and whether, such a case, constitutes
``a case of a manufacturer that approves, allows, or otherwise
permits'' the drug to be sold under the manufacturer's NDA, such that
the exclusion applies. And if not, whether the primary manufacturer may
include the average price paid for the authorized generic when
calculating AMP for the brand drug. We believe that irrespective of the
relationship between the manufacturer of the brand drug, and the
manufacturer of the authorized generic, if the primary manufacturer
``approves, allows, or otherwise permits'' is the drug to be sold under
the primary manufacturer's NDA, then the AMP for the brand should be
calculated separately from (not include) the sales of the authorized
generic. That is, it would not matter whether the manufacturer being
approved, allowed, or otherwise permitted to sell the drug under the
primary manufacturer's NDA was the same, affiliated or non-affiliated.
Therefore, we are interpreting section 1927(k)(1)(C) of the Act,
which provides that in the case of a manufacturer approves, allows, or
otherwise permits any of its drugs to be sold under the same NDA, the
AMP for that brand drug shall be exclusive of the average price paid
for such drug by wholesalers for drugs distributed to retail community
pharmacies, to mean a separate AMP should be calculated for each drug
product--that is, one AMP for the brand drug, and one AMP for the
authorized generic product, and the AMP for the brand drug should
always exclude sales of the authorized generic product. This includes a
situation when it is the same manufacturer making both the brand name
drug and authorized generic, or if the drugs are being manufactured by
different, but affiliated manufacturers or even non-affiliated
manufacturers. We are proposing a policy that applies irrespsective of
a specific brand manufacturer's sales arrangement.
The amendments made by section 1603 of the Health Extenders Act are
effective October 1, 2019. Therefore, manufacturers are required to
reflect the changes to the calculation of their AMPs for rebate periods
beginning October 1, 2019 (reported to CMS no later than 30 days after
the end of the rebate period). Furthermore, in accordance with Sec.
447.510(b), manufacturers have 12 quarters from the quarter in which
the data were due to revise AMP, if necessary.
F. Medicaid Drug Rebates (MDR) (Sec. 447.509)
Manufacturers that participate in the MDRP are required to pay
rebates for covered outpatient drugs that are dispensed to Medicaid
patients. The rebates are calculated based on formulas described in
section 1927(c) of the Act. As described in section I. of this proposed
rule, the BBA 2015 made revisions to the statutory rebate formula for
covered outpatient drugs other than single source or innovator multiple
source drugs. That is, section 602 of BBA 2015, amended section
1927(c)(3)
[[Page 37301]]
of the Act to require that manufacturers pay additional rebates on
their covered outpatient drugs other than single source or innovator
multiple source drugs (non-innovator multiple source (N) drugs) when
the AMP of the N drug increases at a rate that exceeds the rate of
inflation. The amendments made by section 602 of BBA 2015, were
effective beginning with the January 1, 2017 quarter (that is, first
quarter of 2017). The implementation of these amendments was discussed
in Manufacturer Release 97 and Manufacturer Release 101.
Prior to the enactment of BBA 2015, the basic quarterly URA
calculation for N drugs was equal to 13 percent of a drug's quarterly
AMP. However, section 602(a) of BBA 2015 amended section 1927(c)(3) of
the Act by adding an inflation-based additional rebate requirement to
the URA for N drugs, which is similar to the additional rebate applied
to single source (S) and innovator multiple source (I) drugs.
To calculate the additional rebate portion of the URA calculation
for N drugs, section 602(a) of BBA 2015 amended section 1927 of the Act
to establish a base AMP or base date AMP value for N drugs based, in
part, upon each N drug's market date. In general, for N drugs marketed
on or before April 1, 2013, the base date AMP is equal to the third
quarter of 2014 and the Base CPI-U is the CPI-U for September 2014. For
N drugs marketed after April 1, 2013, the base date AMP is equal to the
AMP for the fifth full calendar quarter after which the drug is
marketed as a drug other than a single source or innovator multiple
source drug and the base CPI-U is equal to the CPI-U for the last month
of the base AMP quarter.
We are proposing to revise Sec. 447.509 to codify the rebate
formulas in regulation. Specifically, we are proposing to revise
paragraph (a)(6) to distinguish the basic rebate for N drugs from this
additional rebate. In addition, we are proposing to add paragraph
(a)(7) to expressly include the additional rebate calculation for N
drugs. We are proposing that in addition to the basic rebate under
paragraph (a)(6), for each dosage form and strength of a N drug, the
rebate amount will increase by an amount equal to the product of the
following: The total number of units of such dosage form and strength
paid for under the State plan in the rebate period, and the amount, if
any, by which the AMP for the dosage form and strength of the drug for
the period exceeds the base date AMP for such dosage form and strength,
increased by the percentage by which the consumer price index for all
urban consumers (United States city average) for the month before the
month in which the rebate period begins exceeds such index associated
with the base date AMP of the drug. We also are proposing to add
paragraph (a)(8) to capture the that the total rebate amount for
noninnovator multiple source drugs is equal to the basic rebate amount
plus the additional rebate amount, if any.
In addition to the proposed regulatory changes related to section
602 of BBA 2015 amendments noted above, we also propose to amend Sec.
447.509 at:
Paragraph (a)(5) to specify that in no case will the total
rebate amount exceed 100 percent of the AMP of the single source or
innovator multiple source drug; and
By adding paragraph (a)(9) to specify that in no case will
the total rebate amount exceed 100 percent of the AMP of the
noninnovator multiple source drug.
We also added to paragraph (a)(7)(B) to state that the
base date AMP has the meaning of AMP set forth in sections
1927(c)(2)(A)(ii)(II), 1927(c)(2)(B) and 1927(c)(3)(C) of the Act as
the regulation did not provide a specific definition of base date AMP
for calculating the additional rebate. We believe it is reasonable to
include this in regulation in order to provide further clarity for
manufacturers and states with regard to the calculation of the
additional rebate, and to ensure the appropriate product data and
pricing information is submitted to CMS.
G. Requirements for Manufacturers (Sec. 447.510)
In accordance with section 1927(b)(3) of the Act and the terms of
the NDRA, manufacturers are required to report pricing information to
CMS on a timely basis or face a penalty. Current regulations at Sec.
447.510 implement the manufacturer price reporting requirements
including the timing of revisions to pricing data. The current
regulation at 42 CFR 447.510(b)(1) requires that the revision to
pricing data be made within the 12 quarters from which the data were
due, unless it meets one of the exceptions in paragraphs (i) through
(v).
As previously discussed in section II.B. of this proposed rule, VBP
has evolved into a possible option for states and manufacturers to help
manage drug expenditures. Many VBP arrangements or pay-over-time models
may be better suited for periods longer than 12 quarters, and
manufacturers entering into such arrangements may need to adjust AMPs
and best prices beyond the 12 quarters because the evidence-based or
outcomes-based measures are being measured beyond a period of 12
quarters or a final installment payment is being made outside of the 12
quarters. With this evolution it has become apparent that certain
manufacturer reporting requirements could be viewed as an impediment to
adopting VBP arrangements. For instance, under current regulations, a
manufacturer would not be able to account for any adjustments to prices
that may occur outside of the 12 quarters because of VBP arrangements
(or even pay-over-time models), as required.
The definition of AMP at section 1927(k)(1)(B)(ii) of the Act,
indicates that any other discounts, rebates, payments or other
financial transactions that are received by, paid by, or passed through
to retail community pharmacies shall be included in AMP for a covered
outpatient drug. The special rules in section 1927(c)(1)(C)(ii) of the
Act define best price to be inclusive of cash discounts, free goods
that are contingent on any purchase requirement, volume discounts and
rebates. Since manufacturers are required to report AMP and best price
that capture these statutory required financial transactions, including
such financial transactions (for example, rebates, incremental
payments) that are a result of VBP arrangements or pay-over-time
models, and such pricing structures may be designed to result in
transactions taking place outside of the 3-year window, we are
proposing to add Sec. 447.510(b)(1)(vi) to specify an additional
exception to the 12-quarter rule to account for the unique nature of
VBP arrangements and pay-over-time models. Specifically, we are
proposing that the manufacturer may make changes outside of the 12-
quarter rule as a result of a VBP arrangement when the outcome must be
evaluated outside of this 12-quarter period.
G. Requirements for States (Sec. 447.511)
Section 1927(b)(2)(A) of the Act requires that states be held
responsible to report to each manufacturer not later than 60 days after
the end of each rebate period and in a form consistent with a standard
reporting format established by the Secretary, information on the total
number of units of each dosage form and strength and package size of
each covered outpatient drug dispensed after December 31, 1990, for
which payment was made under the plan during the period, including such
information reported by each Medicaid managed care organization, and
shall promptly transmit a copy of such report to the Secretary. The
accuracy and timeliness of this SDUD report is important for the MDRP,
other programs, and legislative efforts including, but not limited to:
[[Page 37302]]
Actuarial and cost impact projections of legislative or
regulatory changes to the MDRP;
The calculation of Medicaid's portion of the branded
prescription drug fee specified at section 9008 of the ACA); and
Ongoing audits that demonstrate that some states still
fail to bill rebates for physician-administered drugs (PADs), although
it has been 13 years since the requirement began.
States are required to send invoices (CMS-R-144 Medicaid Drug
Rebate Invoice) to each manufacturer in the MDRP for which payment was
made on behalf of the state and federal government for the
manufacturers' drugs, or in the case of MCOs, drugs dispensed to a
beneficiary in a rebate period. States are required to send a copy of
their SDUD (a summary report of their invoice utilization data) to CMS
each quarter. If a state makes an adjustment to a rebate invoice, the
state is required to send an updated SDUD to us in the same reporting
period in which the manufacturer received the adjustment.
We have found that some states do not have sufficient edits in
place to detect, reject and investigate SDUD outliers, which may
distort the rebate amounts due by manufacturers. This results in states
overbilling manufacturers and generating disputes on rebate invoices;
imposing resource burdens on manufacturers, states, CMS, and other MDRP
partners, as well as interrupting the payment of rebates to states and
CMS. Many states seemingly fail to implement needed system edits to
identify such disputes prior to billing manufacturers. Although both
overbilling and underbilling must be disputed, manufacturers often
neglect to dispute instances of rebate underbilling.
We have also found that many states do not send the same SDUD to
CMS as they transmit to manufacturers. In fact, some states send us
``pre-edited'' SDUD, while the manufacturer's rebate invoice contains
edited data. These practices do not comply with Sec. 447.511(b), which
requires that states submit the same SDUD to us on a quarterly basis
that they transmit to the manufacturers. As we move to implement new
systems, we expect to put in place data error screening to better
reject or alert identified potential inaccuracies to SDUD. States
should also be improving current systems and planning updates to future
systems to better identify and correct inaccurate SDUD before reporting
to manufacturers and CMS.
To better hold states accountable for their data integrity and to
mitigate the effects of inaccurate and untimely SDUD, we are proposing
to revise Sec. 447.511. Specifically, we are proposing to revise
paragraph (a) to specify that any subsequent updates or changes in the
data on the CMS-R-144 must be included in the state's utilization data
submitted to CMS. We are also proposing to revise paragraph (b) to
state that, on a quarterly basis, the state must submit drug
utilization data to CMS, which will be the same information as
submitted to the manufacturers on the CMS-R-144, as specified in Sec.
447.511(a). In addition, to conform to the statutory requirement at
section 1927(b)(2)(A) of the Act, we are proposing to add in regulatory
text that the state data submission will be due no later than 60 days
after the end of each rebate period. In the event that a due date falls
on a weekend or federal holiday, the submission will be due on the
first business day following that weekend or federal holiday. We also
propose that any adjustments to previously submitted data would be
transmitted to the manufacturer and CMS in the same reporting period.
We are also proposing to add Sec. 447.511(d) to specify that the
state data must be certified by the state Medicaid director (SMD), the
deputy state Medicaid director (DSMD), or an individual other than the
SMD or DSMD, who has authority equivalent to an SMD or DSMD or an
individual with the directly delegated authority to perform the
certification on behalf of the individuals noted above.
We are also proposing to add Sec. 447.511(e) to specify the state
data certification language that must be included in the submission.
That is, each data submission by a state must include the following
certification language: I hereby certify, to the best of my knowledge,
that the state's data submission is complete and accurate at the time
of this submission, and was prepared in accordance with the state's
good faith, reasonable efforts based on existing guidance from CMS,
section 1927 of the Act and applicable federal regulations. I further
certify that the state has transmitted data to CMS, including any
adjustments to previous rebate periods, in the same reporting period as
provided to the manufacturer. Further, the state certifies that it has
applied any necessary edits to the data for both CMS and the labeler to
avoid inaccuracies at both the NDC/line item and file/aggregate level.
Such edits are to be applied in the same manner and in the same
reporting period to both CMS and the manufacturer.
H. State Plan Requirements, Findings and Assurances (Sec. 447.518)
Traditionally, states have utilized the supplemental rebate
agreement (SRA) pathway to secure additional rebates over and above the
federal rebate required of manufacturers participating in the MDRP. In
order to do so, the Secretary must authorize a state to enter directly
into these agreements with a manufacturer in accordance with section
1927(a)(1) of the Act. In accordance with section 1927(a)(1) of the
Act, we require states to submit a state plan amendment for a SRA which
includes a template of the SRA providing the framework for the
agreement the state has with the manufacturer. A CMS-authorized SRA
provides the parameters the state and manufacturer agree upon regarding
the supplemental rebates, most importantly, that such rebates are at
least as large as the rebates required by the federal government in
accordance with 1927(a)(4) of the Act.
To make new and expensive innovative drugs more available to
Medicaid patients, states are permitted to use a SRA pathway to
negotiate VBP agreements with manufacturers that are intended to be
financially beneficial for Medicaid. As with a traditional SRAs, these
VBP SRAs must be financially advantageous for states, but must also
include an evidence or outcomes-based measure. As with any other SRA,
states are required to seek a SPA approval for a VBP SRA in accordance
with section 1927(a)(1) of the Act. Through the SRA SPA process, a
state, when approved by CMS, can enter into VBP SRAs directly with
manufacturer(s) for both FFS and MCO covered outpatient drug claims.
Under the SRA VBP arrangement, the state may need set up processes to
report the results of the evidence or outcomes-based measures of the
patient back to the manufacturer. This could require the state to take
on additional responsibilities and expense in order to eventually
collect a rebate, such as tracking the patient, collecting data on the
patient (such as the results of evidence or outcomes-based measures) or
providing services to the patient.
We understand that more states want to develop their own VBP
arrangements, but states want to better understand the challenges,
resources and costs to structure these programs and make them
successful. In addition, given that we have a significant interest in
the success of these innovative VBP programs, as well as the nature of
the drugs that are subject to these agreements, we have an interest in
helping evaluate these programs' effectiveness. To accomplish
[[Page 37303]]
this, we want to create a mechanism to exchange information about state
VBP programs. This approach is consistent with section 1902(a)(30)(A)
of the Act which requires that methods and procedures be established
relating to the utilization of, and the payment for, care and services
available under the plan (including but not limited to utilization
review plans) as may be necessary to safeguard against unnecessary
utilization of such care and services and to assure that payments are
consistent with efficiency, economy, and quality of care.
Therefore, in accordance with section 1902(a) of the Act, we
propose that states provide to us specific data elements associated
with these VBP SRAs to ensure that payments associated with Medicaid
patients receiving a drug under a VBP structure are consistent with
efficiency, economy, and quality of care. To that end, we propose
adding Sec. 447.511(d)(1) and (2) to specify that a state
participating in a VBP arrangement report data as specified on a yearly
basis, and within 60 days of the end of each year, including the
following data elements:
State.
National Drug Code(s) (for the drugs covered under the
VBP).
Product FDA list name.
Number of prescriptions.
Cost to the state to administer VBP (for example, systems
changes, tracking outcomes, etc.).
Total savings generated by the supplemental rebate due to
VBP.
We invite comments on this approach and are particularly interested
in understanding from states the burden with such a proposal and from
all commenters whether the data elements are appropriate and useful
with the goals of the proposal that we have laid out above.
I. Drug Utilization Review (DUR) Program and Electronic Claims
Management System for Outpatient Drug Claims (Sec. Sec. 456.700
Through 456.725), Managed Care Standard Contract Requirements and
Requirements for MCOs, PIHPs, or PAHPs That Provide Covered Outpatient
Drugs (Sec. 438.3(s))
Section 1004 of the SUPPORT for Patients and Communities Act
requires states to implement certain opioid-specific drug use review
(DUR) standards within their fee-for-service (FFS) and managed care
programs. These requirements supplement prior DUR standards under
section 1927(g) of the Act. In Medicaid, DUR involves the structured,
ongoing review of healthcare provider prescribing, pharmacist
dispensing, and patient use of medication. DUR involves a comprehensive
review of patients' prescription and medication data and dispensing to
help ensure appropriate medication decision making and positive patient
outcomes. Potentially inappropriate prescriptions, unexpected and
potentially troublesome patterns, data outliers, and other issues can
be identified when reviewing prescriptions through prospective DUR or
retrospective DUR activities. In Prospective DUR, the screening of
prescription drug claims occurs to identify problems such as
therapeutic duplication, drug-disease contraindications, incorrect
dosage or duration of treatment, drug allergy and clinical misuse or
abuse prior to dispensing of the prescription to the patient.
Retrospective DUR involves ongoing and periodic examination and reviews
of claims data to identify patterns of inappropriate use, fraud, abuse,
or medically unnecessary care and facilitates corrective action when
needed. Often times, these activities are synergistic; information
gleaned through retrospective DUR claim reviews can be used to shape
effective safety edits that can be implemented through prospective DUR,
better enabling prescribers and dispensers to investigate prescription
concerns prior to dispensing the medication to the patient. From
prospective alerts (which can incorporate information from the
beneficiary's claims data), potential issues can be identified to help
promote the appropriate prescription and dispensing of outpatient drugs
to beneficiaries. DUR programs play a key role in helping health care
systems understand, interpret, and improve the prescribing,
administration, and use of medications.
Section 1902 of the Act, as amended by section 1004 of the SUPPORT
for Patients and Communities Act, requires states to implement safety
edits and claims review automated processes for opioids as DUR
requirements. We interpret ``safety edits'' to refer to the prospective
DUR review specified in section 1927(g)(2)(A) of the Act. These
prospective safety edits provide for identifying potential problems at
point of sale (POS) to engage both patients and prescribers about
identifying and mitigating possible opioid misuse, abuse, and overdose
risk at the time of dispensing. The POS safety edits provide real-time
information to the pharmacist prior to the prescription being dispensed
to a patient, but do not necessarily prevent the prescription from
being dispensed. When a safety edit is prompted, the pharmacist
receives an alert and may be required, as dictated by good clinical
practice and predetermined standards determined by the state, to take
further action to resolve the alert before the prescription can be
dispensed.\13\ A claims review automated process, which we interpret to
refer to as a retrospective DUR review) as defined in section
1927(g)(2)(B) of the Act, provides for additional examination of claims
data to identify patterns of fraud, abuse, gross overuse, or
inappropriate or medically unnecessary care. Retrospective reviews
often involve reviews of patient drug and disease history generated
from claims data after prescriptions have been dispensed to the
beneficiary. For many retrospective reviews, in an effort to promote
appropriate prescribing and utilization of medications, claims data is
evaluated against state determined criteria on a regular basis to
identify recipients with drug therapy issues, enabling appropriate
action to be taken based on any issues identified. After these reviews,
prescribers often have the opportunity to review prescriptions and
diagnosis history and make changes to therapies based on the
retrospective review intervention. Retrospective claims reviews provide
access to more comprehensive information relevant to the prescriptions
and services that are being furnished to beneficiaries and better
enable and encourage prescribers and dispensers to minimize opioid risk
in their patients, and assure appropriate pain care.
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\13\ Prada, Sergio. (2019). Comparing the Medicaid Prospective
Drug Utilization Review Program Cost-Savings Methods Used by State
Agencies in 2015 and 2016. American Health and Drug Benefits. 12. 7-
12.
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Many of the proposed safety edits and reviews described in this
proposed rule are designed to implement requirements outlined in the
SUPPORT for Patients and Communities Act. The purpose of these safety
edits and claims reviews is to prompt prescribers and pharmacists to
conduct additional safety reviews to determine if the patient's opioid
use is appropriate and medically necessary. Provisions to address
antipsychotic utilization in children and fraud and abuse requirements
are also included in the SUPPORT for Patient and Communities Act and
are measures designed to enhance appropriate utilization of medication.
We recognize that the SUPPORT for Patients and Communities Act provides
considerable flexibility for states to specify particular parameters of
the safety edits, claims review automated processes, program for
monitoring use of antipsychotic
[[Page 37304]]
medications in children, and process for identifying fraud and abuse.
Additionally, we acknowledge that many states already have effective
DUR processes and other controls in place, and that section
1902(oo)(1)(E) of the Act (as added by section 1004 of the SUPPORT for
Patients and Communities Act) clarifies that states may meet new
opioid-related requirements with such safety edits, claims review
automated processes, programs, or processes as were in place before
October 1, 2019. However, to ensure a consistent baseline of minimum
national standards for these DUR activities, while preserving
appropriate flexibility for the states to determine their particular
parameters and implementation, we believe it is necessary under our
authority to implement section 1927(g) of the Act, to assure that
prescriptions are appropriate, medically necessary, and not likely to
result in adverse medical results, to codify in regulation the proposed
safety edits, claims review automated processes, program for monitoring
antipsychotic medications in children, and fraud and abuse process
requirements as described in this proposed rule. Accordingly, the
provisions of this proposed rule would implement opioid-related
requirements established in the SUPPORT for Patients and Communities
Act and further implement requirements under section 1927(g) of the
Act, in an effort to reduce prescription-related fraud, misuse and
abuse.
In addition to codifying the SUPPORT for Patients and Communities
Act requirements, we are proposing additional minimum DUR standards in
this proposed rule that states would be required to implement as part
of their DUR programs. Specifically, section 1927 of the Act provides
for drug use review programs for covered outpatient drugs to assure
that prescriptions (1) are appropriate, (2) are medically necessary,
and (3) are not likely to result in adverse medical results.
Accordingly, under our authority to implement section 1927(g) of the
Act and consistent with the goals of the SUPPORT for Patients and
Communities Act to assure the appropriate use of prescription opioids,
we are proposing minimum standards for DUR reviews related to
medication assisted treatment (MAT) and identification of beneficiaries
who could be at high risk of opioid overdose for consideration of
naloxone prescribing or dispensing.
We also are seeking comments on potential additional standards that
we might implement through future rulemaking, to ensure minimally
adequate DUR programs that help ensure prescribed drugs are:
Appropriate, medically necessary, and not likely to result in adverse
medical results. We are interpreting adverse medical results to include
medication errors or medical adverse events, reactions and side
effects. We anticipate that any such additional standards would be
clinically based and scientifically valid and developed with state
collaboration, standards development organizations, and entities that
support Medicaid DUR programs, and would help ensure all states have
established a reasonable and appropriate DUR program. Such proposed
standards would align with current clinical guidelines and could
address the following: Maintaining policies and systems to assist in
preventing over-utilization and under-utilization of prescribed
medications, establishing quality assurance measures and systems to
reduce medication errors and adverse drug interactions, and improving
medication compliance and overall well-being of beneficiaries. We are
considering other mechanisms to encourage states to adopt additional
DUR standards in a timely manner to respond to new and emerging issues
in drug use, as the rulemaking process can be a lengthy process. For
example, we are considering issuing possible future suggested ``best
practices'' or guidance for states in advance of and in anticipation of
rulemaking. We are seeking comments on the best processes for
collaboratively developing future minimum DUR standards and are seeking
comments from states and other stakeholders on potential approaches.
The early signs of the opioid crisis emerged years ago, with
groundwork for the crisis being laid in the late 1990s, when providers
began to prescribe opioid analgesics at greater rates, which led to
widespread misuse and abuse of both prescription and illegal opioids.
After what the CDC characterizes as a ``first wave'' of opioid deaths,
a second wave followed in 2010, involving heroin, with a third wave
beginning in 2013 involving overdoses from synthetic opioids.\14\ CDC
data indicate that from 1999 through 2017, almost 400,000 people died
from an overdose involving any opioid, including prescription and
illicit opioids.\15\ In 2018, there was an additional 67,367 drug
overdose deaths occurred in the United States. The age-adjusted rate of
overdose deaths decreased by 4.6 percent from 2017 (21.7 per 100,000)
to 2018 (20.7 per 100,000). Opioids--mainly synthetic opioids (other
than methadone)--are currently the main driver of drug overdose deaths.
Opioids were involved in 46,802 overdose deaths in 2018 (69.5 percent
of all drug overdose deaths) \16\ and two out of three (67.0 percent)
opioid-involved overdose deaths involved synthetic opioids.\17\
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\14\ ``Understanding the Epidemic.'' Centers for Disease Control
and Prevention, Centers for Disease Control and Prevention, 19 Dec.
2018, https://www.cdc.gov/drugoverdose/epidemic/index.html.
\15\ ``Understanding the Epidemic.'' Centers for Disease Control
and Prevention, Centers for Disease Control and Prevention, 19 Dec.
2018, www.cdc.gov/drugoverdose/epidemic/index.html.
\16\ Hedegaard H, Mini[ntilde]o AM, Warner M. Drug Overdose
Deaths in the United States, 1999-2018.pdf icon NCHS Data Brief, No
356. Hyattsville, MD: National Center for Health Statistics. 2020.
\17\ Wilson N, Kariisa M, Seth P, et al. Drug and Opioid-
Involved Overdose Deaths--United States, 2017-2018. MMWR Morb Mortal
Wkly Rep 2020;69:290-297.
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In a 2016 informational bulletin titled, ``Best Practices for
Addressing Prescription Opioid Overdoses, Misuse and Addiction'' CMS
issued guidance to states to outline both how to help curb the opioid
crisis,\18\ and in 2019 guidance was issued on how states can use
statutory authority to expand the treatment of pain through
complementary and integrative approaches.\19\ Another section of the
SUPPORT for Patients and Communities Act, section 6032, has directed
HHS to collaborate with the Pain Management Best Practices Inter-Agency
Task Force (PMTF), to develop an Action Plan on payment and coverage in
Medicare and Medicaid for acute and chronic pain, and substance use
disorders, informed by a Request for Information and a public meeting
held at CMS in September, 2019.\20\ The Action Plan is related to CMS's
Fighting the Opioid Crisis Roadmap, which describes our three-pronged
approach to managing pain using a safe and effective range of treatment
options that rely less on prescription opioids, expanding treatment for
OUD, and using data to target prevention efforts and identify fraud and
abuse.\21\
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\18\ ``Best Practices for Addressing Prescription Opioid
Overdoses, Misuse and Addiction.'' CMCS Informational Bulletin
available at www.medicaid.gov/federal-policy-guidance/downloads/CIB-02-02-16.pdf.
\19\ ``Medicaid Strategies for Non-Opioid Pharmacologic and Non-
Pharmacologic Chronic Pain Management.'' CMCS Informational Bulletin
at https://www.medicaid.gov/sites/default/files/federal-policy-guidance/downloads/cib022219.pdf.
\20\ ``Request for Information for the Development of a CMS
Action Plan to Prevent Opioid Addiction and Enhance Access to
Medication-Assisted Treatment.'' CMCS request for information
available at https://www.cms.gov/About-CMS/Story-Page/Opioid-SUPPORT-Act-RFI.pdf.
\21\ ``CMS Roadmap: Fighting the Opioid Crisis.'' Available at
https://www.cms.gov/About-CMS/Agency-Information/Emergency/Downloads/Opioid-epidemic-roadmap.pdf.
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In 2018, the SUPPORT for Patients and Communities Act was passed as
[[Page 37305]]
part of a bipartisan effort to address the opioid crisis, as well as
the treatment of pain. The practice of chronic pain management and the
opioid crisis have influenced one another as each has evolved in
response to different influences and pressures. At the same time CMS
seeks to implement these requirements, we want to ensure Medicaid
beneficiaries with chronic pain can work with their health care
providers to optimize function, quality of life, and productivity while
minimizing risks for opioid misuse and harm such as addiction and
overdose.\22\ Therefore, we are considering appropriate approaches
through which we could collaboratively develop future minimum DUR
standards with involvement from states and other stakeholders, taking
into account the need for administrative flexibility and adequate time
for operational implementation, which could be implemented more quickly
to respond to public health crises that may arise in the future on a
more rapid timeframe. We are also considering posting DUR
recommendations on our website or through guidance to States to allow
quick dissemination of the information.
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\22\ Pain Management Best Practices Inter-Agency Task Force.
``Pain Management Best Practices.'' Available at https://www.hhs.gov/sites/default/files/pmtf-final-report-2019-05-23.pdf.
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1. Minimum Standards for DUR Programs Under the SUPPORT for Patients
and Communities Act and Section 1927 of the Act
In Sec. 456.703, we are proposing to redesignate paragraph (h) as
paragraph (i) and to add a new paragraph (h), specifying minimum
standards for DUR programs. The proposed minimum standards in Sec.
456.703(h)(1), discussed in greater detail below, would implement the
amendments made by section 1004 of the SUPPORT for Patients and
Communities Act and section 1927(g) of the Act and are intended to help
ensure DUR programs continue to adapt and improve the quality of
pharmaceutical care provided to beneficiaries in the face of evolving
healthcare guidelines and technology practices.
We are proposing the provisions below for implementation of
requirements in the SUPPORT for Patients and Communities Act \23\
consistent with section 1927(g) of the Act. The proposed safety edits
and claim reviews are intended to help protect beneficiaries from
serious potential consequences of overutilization, including misuse,
abuse, overdose, and increased side effects. In addition to the risk of
abuse, misuse, and diversion, opioids can have side effects including
respiratory depression, confusion, tolerance, and physical
dependence.\24\
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\23\ https://www.congress.gov/115/bills/hr6/BILLS-115hr6enr.pdf.
\24\ ``CDC Guideline for Prescribing Opioids for Chronic Pain--
United States, 2016.'' Centers for Disease Control and Prevention,
Centers for Disease Control and Prevention, 29 Aug. 2017, https://www.cdc.gov/mmwr/volumes/65/rr/pdfs/rr6501e1er.pdf.
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The Centers for Disease Control and Prevention has recommended, in
2016 guidance,\25\ that primary care providers prescribing to adults in
outpatient settings consider non-pharmacologic therapy and non-opioid
pharmacologic therapy as the first-line treatment for chronic pain.\26\
The CDC guideline defines chronic pain as ``pain continuing or expected
to continue for greater than 3 months or past the time of normal tissue
healing.'' Regarding chronic pain, CDC states clinicians should use
caution when initiating prescribing opioids at any dosage, and should
carefully reassess evidence of individual benefits and risks when
considering increasing dosage to >=50 morphine milligram equivalents
(MME)/day, and should avoid increasing dosage to >=90 MME/day or
carefully justify a decision to titrate dosage to >=90 MME/day.\27\
Caution is also recommended in prescribing opioids for acute pain,
noting that long-term opioid use often begins with treatment of acute
pain; when opioids are prescribed for non-traumatic, non-surgical acute
pain, primary care clinicians should prescribe the lowest effective
dose for the shortest duration possible--usually 3 days or less is
sufficient and more than 7 days will rarely be needed.\28\ Non-
pharmacologic therapies pose minimal risks, and many of these
treatments, when available and accessible--such as exercise therapy,
physical therapy, and cognitive behavioral therapy (CBT) have been
shown to effectively treat chronic pain associated with some
conditions.\29\ For example, exercise therapy can be effective in
treating moderate pain associated with lower back pain, osteoarthritis,
and fibromyalgia in some patients.\30\
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\25\ ``CDC Guideline for Prescribing Opioids for Chronic Pain--
United States, 2016.'' Centers for Disease Control and Prevention,
Centers for Disease Control and Prevention, 18 Mar. 2016, https://www.cdc.gov/mmwr/volumes/65/rr/rr6501e1.htm?CDC_AA_refVal=https://
www.cdc.gov/mmwr/volumes/65/rr/rr6501e1er.html.
\26\ Dowell, D., Haegerich, T.M., Chou, R. CDC Guideline for
Prescribing Opioids for Chronic Pain--United States 2016, Morbidity
and Mortality Weekly Report March 18, 2016: 65)1 [Accessed February
11, 2019 at https://www.cdc.gov/mmwr/volumes/65/rr/rr6501e1.htm.
\27\ ``CDC Guidelines for Prescribing Opioids for Chronic pain.
'' Available at https://www.cdc.gov/drugoverdose/pdf/guidelines_at-a-glance-a.pdf.
\28\ Dowell, D., Haegerich, T.M., Chou, R. CDC Guideline for
Prescribing Opioids for Chronic Pain--United States 2016, Morbidity
and Mortality Weekly Report March 18, 2016: 65)1 [Accessed February
11, 2019 at https://www.cdc.gov/mmwr/volumes/65/rr/rr6501e1.htm].
\29\ For a review of the evidence base for CBT, see Ehde D.M.,
Dillworth, T.M. and Turner, J.A. Cognitive-Behavioral Therapy for
Individuals with Chronic Pain: Efficacy, Innovations, and Directions
for Research. American Psychologist, 69(2); 153-166.
\30\ Additional information on non-opioid treatments for chronic
pain are available at https://www.cdc.gov/drugoverdose/pdf/nonopioid_treatments-a.pdf.
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In 2019 the Department of Health and Human Services' PMTF issued
its report to HHS and Congress, the Pain Management Best Practices
Inter-Agency Task Force Report, on best practices for the treatment of
acute and chronic pain. The CDC has identified 50 million adults in the
United States with chronic daily pain,\31\ and the NIH states that
chronic daily pain cost the nation between $560 billion and $635
billion annually.32 33 The PMTF final report emphasizes a
person-centered approach to pain care that includes the use of
individualized, multimodal treatment based on an effective pain
treatment plan, and the PMTF identified and described five broad
treatment categories: Medications, restorative therapies,
interventional approaches, behavioral approaches, and complementary and
integrative health that can be used through multidisciplinary care. In
its report, the PMTF recognized that there have been ``unintended
consequences that have resulted following the release of the CDC
Guideline in 2016, which are due in part to misapplication or
misinterpretation of the Guideline, including forced tapers and patient
abandonment'' \34\ and noted the ``CDC has also published a pivotal
article in the New England Journal of Medicine on April 24, 2019,
specifically reiterating that the CDC Guideline has
[[Page 37306]]
been, in some instances, misinterpreted or misapplied.'' \35\ HHS
recently issued the Guide for Clinicians on the Appropriate Dosage
Reduction or Discontinuation of Long-Term Opioid Analgesics, to assure
proper tapering and discontinuation of long-term opioids, in part to
avoid harms and encourage person-centered care that is tailored to the
specific needs and unique circumstances of each pain patient,\36\ in
addition to the CMS-issued guidance to states in 2016 and 2019 to both
outline how to help curb the opioid crisis and provide guidance to
states that want to expand care for the treatment of
pain.37 38
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\31\ ``Managing Chronic Pain.'' Centers for Disease Control and
Prevention, Centers for Disease Control and Prevention, 18 Dec.
2019, www.cdc.gov/learnmorefeelbetter/programs/chronic-pain.htm.
\32\ Gaskin, Darrell J. ``The Economic Costs of Pain in the
United States.'' Relieving Pain in America: A Blueprint for
Transforming Prevention, Care, Education, and Research., U.S.
National Library of Medicine, 1 Jan. 1970, www.ncbi.nlm.nih.gov/books/NBK92521/.
\33\ ``Prevalence of Chronic Pain and High-Impact Chronic Pain
Among Adults--United States, 2016.'' Centers for Disease Control and
Prevention, Centers for Disease Control and Prevention, 16 Sept.
2019, www.cdc.gov/mmwr/volumes/67/wr/mm6736a2.htm.
\34\ Additional information on non-opioid treatments for chronic
pain are available at https://www.cdc.gov/drugoverdose/pdf/nonopioid_treatments-a.pdf.
\35\ Dowell D., Haegerich T.M., Chou R. No shortcuts to safer
opioid prescribing. N Engl J Med 2019; 380: 2285-2287.
\36\ HHS Guide for Clinicians on the Appropriate Dosage
Reduction or Discontinuation of Long-Term Opioid Analgesics. Oct.
2019, www.hhs.gov/opioids/sites/default/files/2019-10/Dosage_Reduction_Discontinuation.pdf.
\37\ ``Best Practices for Addressing Prescription Opioid
Overdoses, Misuse and Addiction.'' CMCS Informational Bulletin
available at www.medicaid.gov/federal-policy-guidance/downloads/CIB-02-02-16.pdf.
\38\ ``Medicaid Strategies for Non-Opioid Pharmacologic and Non-
Pharmacologic Chronic Pain Management.'' CMCS Informational Bulletin
at https://www.medicaid.gov/federal-policy-guidance/downloads/cib022219.pdf).
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Accordingly, we are proposing to add Sec. 456.703(h)(1)(i) to
include minimum standard requirements as described in this proposed
rule, with the detailed design and implementation specifications left
to the state's discretion to meet state-specific needs. The purpose of
these proposed safety edits (specifically, safety edits to implement
state-defined limits on initial prescription fill days' supply for
patients not currently receiving opioid therapy, quantity, duplicate
fills, and early refills) and reviews is to further implement section
1927(g) of the Act to prevent and reduce the inappropriate use of
opioids and potentially associated adverse medical events to
sufficiently address the nation's opioid overdose epidemic, consistent
with the provisions under section 1004 of the SUPPORT for Patients and
Communities Act.
When implementing the SUPPORT for Patients and Communities Act, we
propose the following safety edits in Sec. 456.703(h)(1)(i) in
addition to a comprehensive opioid claims review automated
retrospective review process where trends witnessed in safety edits can
be reviewed and investigated. These reviews will allow subsequent
appropriate actions to be taken as designed by the states.
a. Opioid Safety Edits Including Initial Fill Days' Supply for Opioid-
Na[iuml]ve Beneficiaries, Quantity, Therapeutically Duplicative Fills,
and Early Refill Limits
The SUPPORT for Patients and Communities Act requires states to
have in place prospective safety edits (as specified by the state) for
subsequent fills for opioids and a claims review automated process (as
designed and implemented by the state) that indicates when an
individual enrolled under the state plan (or under a waiver of the
state plan) is prescribed a subsequent fill of opioids in excess of any
limitation that may be identified by the state.\39\ As discussed in
detail below, consistent with the SUPPORT for Patients and Communities
Act and DUR requirements under section 1927(g)(2)(A) of the Act, we are
proposing that state-identified limitations must include state-
specified restrictions on initial prescription fill days' supply for
patients not currently receiving opioid therapy; quantity limits for
initial and subsequent fills, therapeutically duplicative fills, and
early fills on opioids prescriptions; and a claims review automated
process that indicates prescription fills of opioids in excess of these
limitations to provide for the ongoing periodic reviews of opioids
claim data and other records in order to identify patterns of fraud,
abuse, excessive utilization, or inappropriate or medically unnecessary
care, or prescribing or billing practices that indicate abuse or
excessive utilization among physicians, pharmacists and individuals
receiving Medicaid benefits. To further implement section 1927(g)(1) of
the Act, and consistent with section 1004 of the SUPPORT for Patients
and Communities Act, we are proposing to require these safety edits to
reinforce efforts to combat the nation's opioid crisis and ensure DUR
opioid reviews are consistent with current clinical practice. These
proposed safety edits are intended to protect Medicaid patients from
serious consequences of overutilization, including overdose, dangerous
interactions, increased side effects and additive toxicity (additive
side effects). In addition, overutilization of opioids may serve as an
indication of uncontrolled disease and the need of increased monitoring
and coordination of care.
---------------------------------------------------------------------------
\39\ Section 1902(oo)(1)(A)(i)(I) of the Act, as added by
section 1004 of the SUPPORT for Patients and Communities Act.
---------------------------------------------------------------------------
(i) Limit on Days' Supply for Opioid Na[iuml]ve Beneficiaries
To further implement section 1927(g)(1) of the Act, and consistent
with section 1004 of the SUPPORT for Patients and Communities Act, we
are proposing to require states to establish safety edit limitations on
the days' supply for an initial prescription opioid fill for
beneficiaries who have not filled an opioid prescription within a
defined time period to be specified by the state. In most cases, ``Days
Supply'' is calculated by dividing the dispensed quantity of medication
by the amount of the medication taken by the patient in one day per the
prescriber's instructions. ``Days' Supply'' means how many days the
supply of dispensed medication will last. This limit would not apply to
patients currently receiving opioids and is meant for beneficiaries who
have not received opioids within this specified time period (as defined
and implemented by the state). The patients who have not received
opioids within a specified timeframe are referred to as opioid
na[iuml]ve and would be subjected to the days' supply limit on the
opioid prescription. While the SUPPORT for Patients and Communities Act
mentions limits on subsequent fills of opioids, consistent with section
1927(g) of the Act, we are proposing this edit on initial fills of
opioids to help avoid excessive utilization by opioid na[iuml]ve
beneficiaries, with its attendant risk of adverse effects.
The CDC Guideline recommends that opioids prescribed for acute pain
in outpatient primary care settings to adults generally should be
limited to 3 days or fewer, and more than a 7 days' supply is rarely
necessary.\40\ Nonpharmacologic therapy and nonopioid pharmacologic
therapy are preferred [for chronic pain] and should be considered by
practitioners and patients prior to treatment with opioids.\41\
Clinical evidence cited by the CDC review found that opioid use for
acute pain is associated with long-term opioid use, and that a greater
amount of early opioid exposure is associated with greater risk for
long-term use. An expected physiologic response in patients exposed to
opioids for more than a few days is physical dependence and the chances
of long-term opioid use begin to increase after just 3 days of use and
rise rapidly thereafter.\42\ The CDC
[[Page 37307]]
Guideline mentions that more than a few days of exposure to opioids
significantly increases hazards, that each day of unnecessary opioid
use increases likelihood of physical dependence without adding benefit,
and that prescriptions with fewer days' supply would minimize the
number of pills available for unintentional or intentional
diversion.\43\
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\40\ ``CDC Guideline for Prescribing Opioids for Chronic Pain--
United States, 2016.'' Centers for Disease Control and Prevention,
Centers for Disease Control and Prevention, 29 Aug. 2017, https://www.cdc.gov/mmwr/volumes/65/rr/pdfs/rr6501e1er.pdf.
\41\ Ibid.
\42\ Shah A., Hayes C.J., Martin B.C. Characteristics of Initial
Prescription Episodes and Likelihood of Long-Term Opioid Use--United
States, 2006-2015. Morbidity and Mortality Weekly Report 2017;
66:265-269 [Accessed February 11, 2019 at http://dx.doi.org/10.15585/mmwr.mm6610a1].
\43\ Ibid.
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Long-term opioid use often begins with treatment of acute pain.
When opioids are used for acute pain, clinicians should prescribe the
lowest effective dose of immediate-release opioids and should prescribe
no greater quantity than needed for the expected duration of pain
severe enough to require opioids.\44\ Limiting days for which opioids
are prescribed for opioid na[iuml]ve patients could minimize the need
to taper opioids to prevent distressing or unpleasant withdrawal
symptoms and help prevent opioid dependence, the risk of which is
associated with the amount of opioid initially prescribed.\45\
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\44\ ``CDC Guideline for Prescribing Opioids for Chronic Pain.''
Centers for Disease Control and Prevention, Centers for Disease
Control and Prevention, https://www.cdc.gov/drugoverdose/pdf/guidelines_at-a-glance-a.pdf.
\45\ Shah A, Hayes CJ, Martin BC. Characteristics of initial
prescription episodes and likelihood of long-term opioid use--United
States, 2006-2015. MMWR Morb Mortal Wkly Rep. 2017;66(10):265-269.
doi:10.15585/mmwr.mm6610a1.
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On state DUR surveys many states indicated they already have
initial fill limitations in place describing the limitations of 100
dosage units or a 34 days supply. Initial opioid analgesic
prescriptions of less than or equal to 7 days' duration appear
sufficient for many pain patients seen in primary care settings.\46\ We
note that in its 2019 clarification of the Guideline, the CDC noted
that it was ``intended for primary care clinicians treating chronic
pain for patients 18 and older, and examples of misapplication include
applying the Guideline to patients in active cancer treatment, patients
experiencing acute sickle cell crises, or patients experiencing post-
surgical pain.'' States can consider the current CDC Guideline and
other clinical guidelines when implementing initial fill limitations,
being mindful of the context in which such guidelines are written (for
example, acute pain, chronic pain, treatment setting, population,
etc.).
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\46\ ``Days' Supply of Initial Opioid Analgesic Prescriptions
and Additional Fills for Acute Pain Conditions Treated in the
Primary Care Setting--United States, 2014 [bond] MMWR.'' Centers for
Disease Control and Prevention, Centers for Disease Control and
Prevention, https://www.cdc.gov/mmwr/volumes/68/wr/mm6806a3.htm.
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The CDC Guideline states primary care clinicians should assess
benefits and harms of opioids with patients early on when starting
opioid therapy for chronic pain and regularly when escalating doses and
continue to evaluate therapy with patients on an ongoing basis. If
benefits do not outweigh harms of continued opioid therapy, clinicians
should optimize other therapies and work with patients to taper opioids
to lower dosages or to taper and discontinue opioid therapy. Consistent
with the foregoing clinical recommendations, we are proposing to
require states to implement safety edits aligned with clinical
guidelines alerting the dispenser at the POS when an opioid
prescription is dispensed to an opioid na[iuml]ve patient that exceeds
a state-specified days' supply limitation. In consideration of clinical
recommendations to limit opioid use to the shortest possible duration
and to assess the clinical benefits and harms of opioid treatment on an
ongoing basis, we believe this safety edit is necessary to assure that
opioid prescriptions are appropriate, medically necessary, and not
likely to result in adverse events, and to accomplish other purposes of
the DUR program under section 1927(g) of the Act and of the SUPPORT for
Patients and Communities Act. Accordingly, we are proposing in Sec.
456.703(h)(1)(i)(A) to require states to implement a days' supply limit
when an initial opioid prescription is dispensed to a patient not
currently receiving ongoing therapy with opioids.
(ii) Opioid Quantity Limits
To further implement section 1927(g)(1) of the Act and section 1004
of the SUPPORT for Patients and Communities Act, we are proposing to
require states establish safety edits to implement quantity limits on
the number of opioid units to be used per day, as identified by the
state. We propose that states take clinical indications and dosing
schedules into account when establishing quantity limits to restrict
the quantity of opioids per day to ensure dose optimization and to
minimize potential for waste and diversion. While the SUPPORT for
Patients and Communities Act mentions quantity limits on subsequent
fills of opioids, consistent with section 1927(g) of the Act, we are
proposing this edit to apply with respect to initial and subsequent
fills of opioids to avoid excessive utilization, with its attendant
risk of adverse effects.
We propose that the quantity limits would be required to take into
account both dosage and frequency, to allow for dose optimization of
pills, capsules, tablets, etc. (pills) and limit the supply of opioids
being dispensed. Dose optimization is a method to consolidate the
quantity of medication dispensed to the smallest amount required to
achieve the desired daily dose and/regimen. Dosage optimization seeks
to prospectively identify patients who have been prescribed multiple
pills, capsules and/or tablets (``pills'') per day of a lower strength
medication meant to be taken together to achieve higher dose, when a
higher strength of medication already is available, and provides
clinicians a tool to switch these patients to a regimen that is an
equivalent daily dose given as a single pill (or a smaller quantity of
pills). Performing this intervention with medications that are
available in multiple strengths, with comparable pricing among these
strengths, can yield significant drug cost savings. In addition, dose-
optimization yields simplifies dosing schedules, decreases pill
burdens, improves treatment compliance and limits the number of excess
units available for diversion.\47\ This proposed safety edit would
allow most patients to achieve pain relief while minimizing patient
pill burdens and unnecessary unused opioids.\48\ When implementing this
edit we expect states to also consider current opioid guidelines,
clinical indications, and dosing schedules of opioids to ensure
prescriptions are appropriate, medically necessary, and not likely to
result in adverse events.
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\47\ Calabrese D., Baldinger S., Dose Optimization Intervention
Yields Significant Drug Cost Savings. https://www.jmcp.org/doi/pdf/10.18553/jmcp.2002.8.2.146.
\48\ Daoust R. Limiting Opioid Prescribing. JAMA. 2019;
322(2):170-171. doi:10.1001/jama.2019.5844.
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Decreasing the initial amount prescribed will lower the risk that
patients develop an addiction to these drugs and transition to chronic
use or misuse.\49\ A survey of adults in Utah estimated that in the
previous 12 months, 1 in 5 state residents were prescribed an opioid
medication and 72 percent had leftover pills and nearly three-quarters
of those with leftover pills kept them.\50\ Leftover medications are an
important source of opioids that are misused or diverted.\51\ We
believe that decreasing the initial amount prescribed will lower the
risk that patients develop opioid use disorder.\52\
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\49\ Ibid.
\50\ Ibid.
\51\ ``FDA Patient Education Campaign Targets Opioid Diversion,
Disposal.'' Available at https://patientengagementhit.com/news/fda-patient-education-campaign-targets-opioid-diversion-disposal.
\52\ Opioid Use During the Six Months After an Emergency
Department Visit for Acute Pain: A Prospective Cohort Study.
Friedman, Benjamin W. et al. Annals of Emergency Medicine, Volume 0,
Issue 0.
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[[Page 37308]]
Prescribing opioids using lowest dosage at fewest possible units
dispensed based on product labeling, and matching duration to scheduled
reassessment, helps reduce the quantity of unused, leftover opioid
pills. Additionally, clinicians should continue to evaluate benefits
and harms of continued ongoing therapy with opioid patients every 3
months or more frequently.\53\ If benefits do not outweigh harms of
continued opioid therapy, clinicians should optimize other therapies
and work with patients to taper opioids to lower dosages or to taper
and discontinue opioids.\54\ In consideration of clinical
recommendations to limit opioid units to the fewest number possible and
to assess the clinical benefits and harms of opioid treatment on an
ongoing basis, we believe this safety edit is necessary to assure that
opioid prescriptions are appropriate, medically necessary, and not
likely to result in adverse events, and to accomplish other purposes of
the DUR program under section 1927(g) of the Act and of the SUPPORT for
Patients and Communities Act. Accordingly, we are proposing at Sec.
456.703(h)(1)(i)(B) that states be required to implement quantity
limits on opioids prescriptions (both initial and subsequent fills) to
help identify abuse, misuse, excessive utilization, or inappropriate or
medically unnecessary care.
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\53\ Dowell, Deborah, et al. ``CDC Guideline for Prescribing
Opioids for Chronic Pain--United States, 2016.'' JAMA, U.S. National
Library of Medicine, 19 Apr. 2016, https://www.ncbi.nlm.nih.gov/pmc/articles/PMC6390846/.
\54\ Frieden TR, Houry D. Reducing the Risks of Relief--The CDC
Opioid-Prescribing Guideline. N Engl J Med. 2016; 374(16):1501-1504.
doi:10.1056/NEJMp1515917.
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iii. Therapeutic Duplication Limitations
To further implement section 1927(g)(1) of the Act and section 1004
of the SUPPORT for Patients and Communities Act, we are proposing to
require states to establish safety edits to alert the dispenser to
potential therapeutic duplication before a prescription is filled for
an opioid product that is in the same therapeutic class as an opioid
product currently being prescribed for the beneficiary. Prescriptions
for multiple opioids and multiple strengths of opioids increase the
supply of opioids available for diversion and abuse, as well as the
opportunity for self-medication and dose escalation.\55\ Some patients,
especially those living with multiple chronic conditions, may consult
multiple physicians, which can put them at risk of receiving multiple
medications in the same therapeutic class for the same diagnosis.\56\
In some instances, the side-effects produced by overmedication, due to
the duplication of prescriptions within the same therapeutic class, are
more serious than the original condition.\57\ We propose to require
this opioid safety edit to help avoid inappropriate or unnecessary
therapeutic duplication when simultaneous use of multiple opioids is
detected.
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\55\ Manchikanti, Laxmaiah, et al. ``Opioid Epidemic in the
United States.'' Pain Physician, U.S. National Library of Medicine,
July 2012, www.ncbi.nlm.nih.gov/pubmed/22786464.
\56\ Ibid.
\57\ ``Therapeutic Duplication.'' Journal of the American
Medical Association, vol. 160, no. 9, 1956, p. 780, doi:10.1001/
jama.1956.02960440052016.
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In consideration of clinical recommendations to use caution in
combining opioids and to limit opioid use to only when necessary while
assessing clinical benefits and harms of opioid treatment on an ongoing
basis, we believe this safety edit is necessary to assure that opioid
prescriptions are appropriate, medically necessary, and not likely to
result in adverse medical results, and to accomplish other purposes of
the DUR program under section 1927(g) of the Act and of the SUPPORT for
Patients and Communities Act. Accordingly, we are proposing at Sec.
456.703(h)(1)(i)(C) that states must implement safety edits for
therapeutically duplicative fills for initial and subsequent
prescription fills on opioids prescriptions and identify suspected
abuse, misuse, excessive utilization, or inappropriate, or medically
unnecessary care.
iv. Early Fill Limitations
To further implement section 1927(g)(1) of the Act and section 1004
of the SUPPORT for Patients and Communities Act, we are proposing to
require that states establish safety edits to alert the dispenser
before a prescription is filled early for an opioid product, based on
the days' supply provided at the most recent fill or as specified by
the state. These early fill edits on opioids are intended to protect
beneficiaries from adverse events associated with using an opioid
medication beyond the prescribed dose schedule and to help minimize the
opioid supply available for diversion.
In consideration of clinical recommendations to limit opioid use to
only when necessary and as prescribed, we believe this safety edit is
necessary to assure that opioid prescriptions are appropriate,
medically necessary, and not likely to result in adverse medical
results, and to accomplish other purposes of the DUR program under
section 1927(g) of the Act and of the SUPPORT for Patients and
Communities Act. Accordingly, we are proposing at Sec.
456.703(h)(1)(i)(D) that states must implement early fill safety alerts
on opioids prescriptions to identify abuse, misuse, excessive
utilization, or inappropriate, or medically unnecessary care.
b. Maximum Daily Morphine Milligram Equivalent (MME) Limits
Section 1004 of the SUPPORT for Patients and Communities Act
requires state DUR programs to include safety edit limits (as specified
by the state) on the maximum daily morphine equivalent that can be
prescribed to an individual enrolled under the state plan (or under a
waiver of the state plan) for treatment of chronic pain (as designed
and implemented by the state) that indicates when an individual
enrolled under the plan (or waiver) is prescribed the morphine
equivalent for such treatment in excess of any threshold identified by
the state.\58\ Accordingly, to further implement section 1927(g)(1) of
the Act and section 1004 of the SUPPORT for Patients and Communities
Act, we are proposing that states must include in their DUR programs
safety edit limitations identified by the State on the maximum daily
morphine milligram equivalent (MME) for treatment of pain and a claims
review automated process, discussed below in connection with paragraph
(h)(1)(iii), that indicates when an individual is prescribed a morphine
milligram equivalent in excess of these limitations.
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\58\ Section 1902(oo)(1)(A)(i)(II) of the Act, as added by
section 1004 of the SUPPORT for Patients and Communities Act.
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Section 1004 of the SUPPORT for Patients and Communities Act
specifically addresses MME limitations in the context of chronic pain.
According to the CDC, acute pain (as distinct from chronic pain)
usually occurs suddenly and usually has a known cause, like an injury,
surgery, or infection. For example, acute pain can be caused from a
wisdom tooth extraction, a surgery, or a broken bone after an
automobile accident. Acute pain normally resolves as your body heals.
Chronic pain, on the other hand, can last weeks, months or years--past
the normal time of healing.\59\ Regarding chronic pain, CDC states
clinicians should use caution when prescribing opioids at any dosage,
and should carefully reassess evidence of individual
[[Page 37309]]
benefits and risks when considering increasing dosage to >=50 morphine
milligram equivalents (MME)/day, and should avoid increasing dosage to
>=90 MME/day or carefully justify a decision to titrate dosage to >=90
MME/day.\60\ With this proposal to require maximum daily MME limits, we
do not mean to suggest rapid discontinuation of opioids already
prescribed at higher dosages. The MME/day metric is often used as a
gauge of the overdose potential of the amount of opioid that is being
given at a particular time.\61\
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\59\ ``Opioids for Acute Pain.'' Centers for Disease Control and
Prevention, available at https://www.cdc.gov/drugoverdose/pdf/patients/Opioids-for-Acute-Pain-a.pdf.
\60\ ``CDC Guidelines for Prescribing Opioids for Chronic
pain.'' Available at https://www.cdc.gov/drugoverdose/pdf/guidelines_at-a-glance-a.pdf.
\61\ Ibid.
---------------------------------------------------------------------------
Calculating the total daily dosage of opioids helps identify
patients who may benefit from closer monitoring, reduction or tapering
of opioids, prescribing of naloxone, or other measures to reduce risk
of overdose. The opioid MME levels mentioned previously in this
proposed rule typically would not be clinically appropriate for acute,
short term pain; moreover, if the prescription were for acute pain,
given the risks associated with high acute doses (in particular,
respiratory risks), we believe that this limitation also would be
appropriate to ensure appropriateness, medical necessity, and avoidance
of adverse events. Accordingly, we are proposing to require states to
establish MME threshold amounts for implementation regardless of
whether the prescription is for treatment of chronic or acute pain.
The proposed prospective safety edit must include a MME threshold
amount to meet statutory requirements, to assist in identifying
patients at potentially high clinical risk who may benefit from closer
monitoring and care coordination. Calculation of MMEs is used to assess
the total daily dose of opioids, taking into account the comparative
potency of different opioids and frequency of use. The calculation to
determine MMEs includes drug strength, quantity, days' supply and a
defined conversion factor unique to each drug.\62\ Patients prescribed
higher opioid dosages are at higher risk of overdose death.\63\
Calculating the total MME daily dose of opioids can help identify
patients who may benefit from closer monitoring, reduction or tapering
of opioids, prescribing of naloxone, or other measures to reduce risk
of overdose.\64\ HHS's Guide for Clinicians on the Appropriate Dosage
Reduction or Discontinuation of Long-Term Opioid Analgesics,\65\ is
also a valuable resource for considering how best to taper and/or
discontinue usage in a thoughtful manner consistent with best clinical
practices. We note that HHS does not recommend opioids be tapered
rapidly or discontinued suddenly due to the significant risks of opioid
withdrawal, unless there is a life-threatening issue confronting the
individual patient. The FDA issued a safety announcement on tapering in
April 2019 noting concerns about safely decreasing or discontinuing
doses of opioids in patients who are physically dependent after hearing
reports about serious harm.\66\
---------------------------------------------------------------------------
\62\ Calculating Total Daily Dose of Opioids For Safer Dosage.
Centers for Disease Control and Prevention, available at https://www.cdc.gov/drugoverdose/pdf/calculating_total_daily_dose-a.pdf.
\63\ Guideline for Prescribing Opioids for Chronic Pain.
www.cdc.gov/drugoverdose/pdf/guidelines_at-a-glance-a.pdf.
\64\ Ibid.
\65\ https://www.hhs.gov/opioids/sites/default/files/2019-10/Dosage_Reduction_Discontinuation.pdf).
\66\ ``FDA identifies harm reported from sudden discontinuation
of opioid pain medicines and requires label changes to guide
prescribers on gradual, individualized tapering.'' Food and Drug
Administration. Available at https://www.fda.gov/drugs/drug-safety-and-availability/fda-identifies-harm-reported-sudden-discontinuation-opioid-pain-medicines-and-requires-label-changes.
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When determining MME threshold amounts, states are reminded that
clinical resources, including, for example, the CDC Guideline,\67\
recommend caution when prescribing opioids for chronic pain in certain
circumstances, and recommend that primary care practitioners reassess
evidence of individual benefits and risks when increasing doses and
subsequently, justifying decisions by thoroughly documenting the
clinical basis for prescribing in the patient's medical record.\68\ It
is important to be cognizant that the CDC Guideline states the dosage
thresholds referenced therein pertain solely to opioids used to treat
chronic pain in primary care settings and that these thresholds, as
recommended by the CDC, do not represent hard limits for opioid
prescriptions.\69\
---------------------------------------------------------------------------
\67\ Dowell D, Haegerich TM, Chou R. CDC Guideline for
Prescribing Opioids for Chronic Pain--United States, 2016. MMWR
Recomm Rep 2016;65(No. RR-1):1-49. DOI: http://dx.doi.org/10.15585/mmwr.rr6501el. https://www.cdc.gov/mmwr/volumes/65/rr/rr6501e1.htm?CDC_AA_refVal=https%3A%2F%2Fwww.cdc.gov%2Fmmwr%2Fvolumes
%2F65%2Frr%2Frr6501e1er.htm.
\68\ Dowell, Deborah, et al. ``CDC Guideline for Prescribing
Opioids for Chronic Pain--United States, 2016.'' JAMA, U.S. National
Library of Medicine, 19 Apr. 2016, https://www.ncbi.nlm.nih.gov/pubmed/26977696.
\69\ Staff, News. ``CDC Clarifies Opioid Guideline Dosage
Thresholds.'' AAFP Home, 12 Jan. 2018, www.aafp.org/news/health-of-the-public/20180112cdcopioidclarify.html.
---------------------------------------------------------------------------
In consideration of clinical recommendations and to assess the
clinical benefits and harms of opioid treatment on an ongoing basis, we
believe this proposed safety edit is necessary to assure at risk
individuals are receiving appropriate treatment that is not likely to
result in adverse medical results, and to accomplish other purposes of
the DUR program under section 1927(g) of the Act and of the SUPPORT for
Patients and Communities Act. Accordingly, we are proposing at Sec.
456.703(h)(1)(ii) that states be required to implement safety edits
that indicates when an individual enrolled under the plan (or waiver)
is prescribed the morphine equivalent for such treatment in excess of
the MME dose limitation identified by the state.
c. Automated Claims Reviews for Opioids
To further implement section 1927(g) of the Act and section 1004 of
the SUPPORT for Patients and Communities Act, we propose that states
must have in place a claims automated review process (as designed and
implemented by the state) that indicates when an individual enrolled
under the state plan (or under a waiver of the state plan) is
prescribed opioids in excess of above-proposed limitations identified
by the state. In these ongoing, comprehensive reviews of opioid claim
data, states should continuously monitor opioid prescriptions,
including overrides of safety edits by the prescriber or dispenser on
initial fill days' supply for opioid na[iuml]ve patients, quantity
limits, therapeutically duplicative fills, early refills and maximum
daily MME limitations on opioids prescriptions.
These opioid claim reviews are necessary to allow states to
continually monitor opioid prescriptions beneficiaries are receiving
and determine and refine future potential prospective DUR safety edits,
based on the findings of the claims reviews. Information obtained
through retrospective DUR claim reviews can be used to shape effective
safety edits that can be implemented through prospective DUR, better
enabling prescribers and dispensers to investigate prescription
concerns prior to dispensing the medication to the patient. Through
ongoing monitoring and observation of trends over time, these reviews
will allow for regular updates to safety edits in an evolving pain
treatment landscape.
Accordingly, we are proposing at Sec. 456.703(h)(1)(iii) that
states must conduct retrospective claims review automated processes
that indicate prescription fills in excess of the
[[Page 37310]]
prospective safety edit limitations specified by the state under
paragraphs Sec. 456.703(h)(1)(i) or (h)(1)(ii) to provide for the
ongoing review of opioid claims data to identify patterns of fraud,
misuse, abuse, excessive utilization, inappropriate or medically
unnecessary care, or prescribing or billing practices that indicate
abuse or provision of inappropriate or medically unnecessary care among
prescribers, pharmacists and individuals receiving Medicaid benefits
above-proposed limitations. In addition to opioid claims data, we also
intend for states to consider incorporating other available records to
provide for the ongoing periodic reviews of opioids claim data and
other records (including but not limited to prescription histories,
diagnoses, medical records, and prescription drug monitoring program
(PDMP) files, when available), in their retrospective claims review
automated processes order to identify patterns of fraud, misuse, abuse,
excessive utilization, or inappropriate or medically unnecessary care,
or prescribing or billing practices that indicate abuse or excessive
utilization among physicians, pharmacists and individuals receiving
Medicaid benefits.
d. Concurrent Utilization Reviews
Section 1902 of the Act, as amended by the SUPPORT for Patients and
Communities Act, requires states to have an automated process for
claims review (as designed and implemented by the state) that monitors
when an individual enrolled under the state plan (or under a waiver of
the state plan) is concurrently prescribed opioids and benzodiazepines
or opioids and antipsychotics.\70\ This requirement is consistent with
the requirement in section 1927(g)(1)(A) of the Act that state DUR
programs must assure that prescriptions are appropriate, medically
necessary, and not likely to result in adverse medical results.
---------------------------------------------------------------------------
\70\ Section 1902(oo)(1)(A)(i)(III) of the Act, as added by
section 1004 of the SUPPORT for Patients and Communities Act.
---------------------------------------------------------------------------
Clinically, through the use of retrospective automated claim
reviews, concurrent use of opioids and benzodiazepines and opioids and
antipsychotics, as well as potential complications resulting from other
medications concurrently being prescribed with opioids, can be reduced.
States are reminded that the requirement for a retrospective automated
claims review added by section 1004 of the SUPPORT for Patients and
Communities Act does not preclude the state from also establishing a
prospective safety edit system to provide additional information to
patients and providers at the POS about concurrent utilization
alerts.\71\ In addition, the state could use the authorities under
section 1927 to subject these patients to appropriate utilization
management techniques. We also would like to remind states that section
1927(g)(1) of the Act also currently supports including other
potentially harmful opioid interactions as additional prospective or
retrospective reviews in state DUR programs, such as opioids and
central nervous system (CNS) depressants, including alcohol or
sedatives. We fully support states including such additional opioid
interactions or contraindications in prospective or retrospective
reviews as part of a comprehensive DUR program.
---------------------------------------------------------------------------
\71\ See section 1902(oo)(1)(A)(iii) of the Act, as added by
section 1004 of the SUPPORT for Patients and Communities Act.
---------------------------------------------------------------------------
In consideration of clinical recommendations to limit opioids
interactions with certain other drugs, including benzodiazepines and
antipsychotics, and to assess the clinical benefits and harms of opioid
treatment on an ongoing basis, we believe the retrospective reviews we
are proposing to require are necessary to assure at-risk individuals
are receiving appropriate treatment that is not likely to result in
adverse medical results, and to accomplish purposes of the DUR program
under section 1927(g) of the Act and of the SUPPORT for Patients and
Communities Act. Accordingly, we are proposing in Sec.
456.703(h)(1)(iv)(A) and (B) that states be required to implement a
claims review automated process that monitors when an individual is
concurrently prescribed opioids and benzodiazepines; or opioids and
antipsychotics.
i. Opioid and Benzodiazepines Concurrent Fill Reviews
In 2016, FDA added a boxed warning to prescription opioid
analgesics, opioid-containing cough products, and benzodiazepines with
information about the serious risks associated with using these
medications concurrently.\72\ The CDC Guideline recommends that
clinicians avoid prescribing benzodiazepines concurrently with opioids
whenever possible. Benzodiazepines may be abused for recreational
purposes by some individuals, with some opioid overdoses also involving
opioids and benzodiazepines or other substances, such as alcohol.\73\
---------------------------------------------------------------------------
\72\ Office of the Commissioner. ``Drug Safety Communications--
FDA warns about serious risks and death when combining opioid pain
or cough medicines with benzodiazepines; requires its strongest
warning.'' U.S. Food and Drug Administration Home Page, Office of
the Commissioner, https://www.fda.gov/media/99761/download.
\73\ Jones, Jermaine D, et al. ``Polydrug Abuse: a Review of
Opioid and Benzodiazepine Combination Use.'' Drug and Alcohol
Dependence, U.S. National Library of Medicine, 1 Sept. 2012,
www.ncbi.nlm.nih.gov/pmc/articles/PMC3454351/.
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Studies show that people concurrently using both drugs are at
higher risk of visiting the emergency department or being admitted to a
hospital for a drug-related emergency.\74\ Due to the heightened risk
of adverse events associated with the concurrent use of opioids and
benzodiazepines, physicians should avoid the initial combination of
opioids and benzodiazepines by offering alternative approaches.\75\
This review would alert providers when these drugs have been prescribed
concurrently to assist in avoiding and mitigating associated risks.
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\74\ Forum, Addiction Policy. ``Sedative Use Disorder.''
Addiction Policy Forum, https://www.addictionpolicy.org/sedative-use-disorder.
\75\ ``Reduce Risk of Opioid Overdose Deaths by Avoiding and
Reducing Co-Prescribing Benzodiazepines.'' MLN Matters Number:
SE19011. Available at https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNMattersArticles/downloads/SE19011.pdf.
---------------------------------------------------------------------------
ii. Opioid and Antipsychotic Concurrent Fill Reviews
This alert is supported by FDA's boxed warning of increased risk of
respiratory and central nervous system (CNS) depression with concurrent
use of opioid and CNS depressants such as antipsychotics or sedatives,
including extreme sleepiness, slowed or difficult breathing,
unresponsiveness or the possibility that death can occur.\76\ Patients
concurrently prescribed opioid and antipsychotic drugs can benefit from
increased coordination of care. Additionally, improving treatment of
comorbid mental disorders is an important consideration when trying to
reduce the overall negative impacts of pain. As the PMTF report noted,
``the occurrence of pain and behavioral health comorbidities, including
depression, post-traumatic stress disorder, and substance use
disorders, is well documented, and it is established that psychosocial
distress can contribute to pain intensity, pain-related disability, and
poor response to chronic pain treatment.'' \77\ Evidence indicates that
[[Page 37311]]
optimizing mental health and pain treatment can improve outcomes in
both areas for patients seen in primary and specialty care settings.
Untreated psychiatric conditions may increase the risk of both
unintentional and intentional medication mismanagement, OUD, and
overdose.\78\ Given the intersection between psychiatric/psychological
symptoms and chronic pain, it is important that the behavioral health
needs of patients with pain are appropriately and carefully evaluated
and treated with the concurrent physical pain problem.\79\ As such,
beneficiaries who are concurrently prescribed both opioids and
antipsychotics should be considered from a health system or policy
perspective when addressing their treatment.\80\ A patient's unique
presentation and circumstances should be considered when prescribing
opioids and antipsychotics. This review would encourage coordination of
care for patients taking antipsychotic and opioid medications
concurrently.
---------------------------------------------------------------------------
\76\ Office of the Commissioner. ``Drug Safety Communications--
FDA warns about serious risks and death when combining opioid pain
or cough medicines with benzodiazepines; requires its strongest
warning.'' U.S. Food and Drug Administration Home Page, Office of
the Commissioner, https://www.fda.gov/media/99761/download.
\77\ Pain Management Best Practices Inter-Agency Task Force.
``Pain Management Best Practices.'' Available at https://www.hhs.gov/sites/default/files/pmtf-final-report-2019-05-23.pdf.
\78\ Ibid.
\79\ Ibid.
\80\ Davis, Matthew A., et al. ``Prescription Opioid Use among
Adults with Mental Health Disorders in the United States.'' The
Journal of the American Board of Family Medicine, vol. 30, no. 4,
2017, pp. 407-417, doi:10.3122/jabfm.2017.04.170112.
---------------------------------------------------------------------------
e. Other Considerations
Consistent with section 1902(oo)(1)(A)(iii) of the Act, as added by
section 1004 of the SUPPORT for Patients and Communities Act, the
provisions proposed to be implemented in Sec. 456.703(h)(1) would not
prohibit states from designing and implementing an automated claims
review process that provides for other processes for the prospective or
retrospective review of claims. Furthermore, none of these proposed
provisions would prohibit the exercise of clinical judgment by a
provider regarding the best or most appropriate care and treatment for
any patient.
We encourage states to develop prospective and retrospective drug
reviews that are consistent with medical practice patterns in the state
to help meet the health care needs of the Medicaid patient population.
In doing so, we encourage states to utilize, for example, the 2016 CDC
Guideline \81\ for primary care practitioners on prescribing opioids in
outpatient settings for chronic pain.
---------------------------------------------------------------------------
\81\ ``CDC Guideline for Prescribing Opioids for Chronic Pain--
United States, 2016.'' Centers for Disease Control and Prevention,
Centers for Disease Control and Prevention, 29 Aug. 2017, https://www.cdc.gov/mmwr/volumes/65/rr/pdfs/rr6501e1er.pdf.
---------------------------------------------------------------------------
In order to avoid abrupt opioid withdrawal, prior authorization may
be necessary for patients who will need clinical intervention to taper
off high doses of opioids to minimize potential symptoms of withdrawal
and manage their treatment regimen, while encouraging pain treatment
using non-pharmacologic therapies and non-opioid medications, where
available, and appropriate.
When implementing these requirements, we encourage states to offer
education and training and to provide consistent messaging across all
healthcare providers. Education and training of all providers on new
opioid-related provisions and on the treatment of acute and chronic
pain, and on behavioral health issues related to pain, would help
minimize workflow disruption and ensure beneficiaries have access to
their medications in a timely manner.
f. Program To Monitor Antipsychotic Medications in Children
Under section 1004 of the SUPPORT for Patients and Communities Act,
states must have a program (as designed and implemented by the state)
to monitor and manage the appropriate use of antipsychotic medications
by children enrolled under the state plan (or under a waiver of the
state plan), including any Medicaid expansion group for Children's
Health Insurance Program (CHIP).\82\ Additionally, states must annually
submit information on activities carried out under this program for
individuals not more than the age of 18 years old generally, and
children in foster care specifically, as part of the annual report
submitted to the Secretary under section 1927(g)(3)(D) of the Act, as
provided in section 1902(oo)(1)(D) of the Act.
---------------------------------------------------------------------------
\82\ Section 1902(oo)(1)(B) of the Act, as added by section 1004
of the SUPPORT for Patients and Communities Act.
---------------------------------------------------------------------------
Antipsychotic medications are increasingly used for a wide range of
clinical indications in diverse populations, including privately and
publicly insured youth.\83\ Antipsychotics' adverse metabolic effects
have heightened concern over growth in prescribing to youth, including
off-label prescribing and polytherapy of multiple antipsychotics.\84\
Studies have raised concerns regarding the long-term safety and
effectiveness of antipsychotics in this broadened population. Studies
in adults have found that antipsychotics can cause serious side effects
and long-term safety and efficacy for off-label utilization is a
particular concern in children.\85\ Some of the most concerning effects
include uncontrollable movements and tremors, an increased risk of
diabetes, substantial weight gain, elevated cholesterol, triglycerides
and prolactin, changes in sexual function, and abnormal lactation.\86\
Children appear to be at higher risk than adults for a number of
adverse effects, such as extrapyramidal symptoms and metabolic and
endocrine abnormalities. Some studies suggests that antipsychotic
treatment may be associated with increased mortality among children and
youths and the distal benefit/risk ratio for long-term off-label
treatment remains to be determined.87 88
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\83\ Crystal, Stephen et al. ``Broadened use of atypical
antipsychotics: safety, effectiveness, and policy challenges.''
Health affairs (Project Hope) vol. 28,5 (2009): w770-81.
doi:10.1377/hlthaff.28.5.w770.
\84\ Ibid.
\85\ Ibid.
\86\ Marder SR, et al. Physical health monitoring of patients
with schizophrenia. Am J Psychiatry. 2004;161(8):1334.
\87\ https://jamanetwork.com/journals/jamapsychiatry/article-abstract/2717966.
\88\ https://www.healthline.com/health/consumer-reports-antipsychotics-children#1.
---------------------------------------------------------------------------
In consideration of clinical recommendations to monitor and manage
the appropriate use of antipsychotic medications by children and to
assess the clinical benefits and harms of treatment on an ongoing
basis, we believe this program is necessary to assure children are
receiving appropriate treatment that is not likely to result in adverse
medical results, and to accomplish other purposes of the DUR program
under section 1927(g) of the Act and of the SUPPORT for Patients and
Communities Act. Accordingly, we are proposing at Sec.
456.703(h)(1)(v) that states be required to implement programs to
monitor and manage the appropriate use of antipsychotic medications by
children enrolled under the State plan, including any Medicaid
expansion groups for the Children's Health Insurance Program (CHIP). We
understand states need considerable flexibility when implementing this
program. These proposed provisions are not meant to prohibit the
exercise of clinical judgment by a provider regarding the best or most
appropriate care and treatment for any patient. States are expected to
consult national guidelines and are encouraged to work with their
pharmacy and therapeutics (P&T) and DUR committees to identify
clinically appropriate safety edits and reviews. We recommend states
consider expanding DUR programs to include reviews on children for
polytherapy (therapy that
[[Page 37312]]
uses more than one medication), inappropriate utilization or off label
utilization.
g. Fraud and Abuse Identification
Section 1902(oo)(1)(C) of the Act, as added by section 1004 of the
SUPPORT for Patients and Communities Act, provides that States must
have a process (as designed and implemented by the state) that
identifies potential fraud or abuse of controlled substances by
individuals enrolled under the state plan (or under a waiver of the
state plan), health care providers prescribing drugs to individuals so
enrolled, and pharmacies dispensing drugs to individuals so enrolled.
We propose to implement this requirement at Sec. 456.703(h)(1)(vi);
specifically, we propose that the state's DUR program must include a
process to identify potential fraud or abuse of controlled substances
by individuals enrolled under the State plan, health care providers
prescribing drugs to individuals so enrolled, and pharmacies dispensing
drugs to individuals so enrolled.
We intend that this proposed process would operate in a coordinated
fashion with other state program integrity efforts. States would have
flexibility to define specific parameters for reviews for fraud and
abuse, as well as protocols for recommendation, referral, or escalation
of reviews to the relevant Program Integrity/Surveillance Utilization
Review (SURS) unit, law enforcement, or state professional board, based
on patterns discovered through the proposed DUR process. Additionally,
state policy should specify the documentation required when suspected
fraud and/or abuse results in a recommendation, referral, or escalation
for further review, including the findings of any subsequent
investigation into the potential deviation from the standard of care.
States would be expected to ensure that DUR reviews conducted pursuant
to this proposed requirement are aligned with all applicable federal
requirements, including those specified in 42 CFR 455.12, 455.13
through 455.21 and 455.23 and section 1902(a)(64) of the Act.
We acknowledge that other initiatives, which many states are
already undertaking, could work synergistically with the proposed
requirement to help reduce fraud, misuse, and abuse related to opioids.
For example, patient review and restriction programs (lock-in programs)
\89\ and prescription drug monitoring programs \90\ also play an
important role in detecting and preventing opioid-related fraud, misuse
and abuse. Lock-in programs, also called patient review and restriction
or drug management programs, are meant to cut down on ``doctor
shopping''--the practice of going to several doctors or pharmacies to
fill multiple prescriptions for opioids or other controlled substances
for illicit sale or misuse or to support an addiction. Such programs
are used primarily to restrict overutilization of medications.
Additionally, programs may require beneficiaries to receive all
prescriptions through one pharmacy, have all prescriptions written by
one prescriber, receive health care services from one clinical
professional, or all three depending on how the program is
designed.\91\
---------------------------------------------------------------------------
\89\ ``Pharmacy Lock-In Programs Slated For Expanded Use.'' OPEN
MINDS, www.openminds.com/market-intelligence/executive-briefings/pharmacy-lock-programs-slated-expanded-use/.
\90\ Office of National Drug Control Policy. Prescription Drug
Monitoring Program. Prescription Drug Monitoring Program, April
2011. https://www.ncjrs.gov/pdffiles1/ondcp/pdmp.pdf.
\91\ ``Pharmacy Lock-In Programs Slated For Expanded Use.'' OPEN
MINDS, www.openminds.com/market-intelligence/executive-briefings/pharmacy-lock-programs-slated-expanded-use/.
---------------------------------------------------------------------------
Section 5042 of the SUPPORT for Patients and Communities Act
requires covered providers who are permitted to prescribe controlled
substances and who participate in Medicaid to query qualified
Prescription Drug Monitoring Programs (PDMPs) before prescribing
controlled substances to most Medicaid beneficiaries, beginning October
1, 2021. PDMPs are database tools sometimes utilized by government
officials and law enforcement for reducing prescription drug fraud,
abuse and diversion, but which more frequently can be used to monitor
controlled substance use by healthcare providers including prescribers
and pharmacists. PDMPs collect electronically transmitted prescribing
and some dispensing data submitted by pharmacies and dispensing
practitioners. The data are monitored and analyzed to support states'
efforts in education, research, enforcement and abuse prevention.\92\
Data analytics can help to determine the extent to which beneficiaries
are prescribed high amounts of opioids, identify beneficiaries who may
be at serious risk of opioid misuse or overdose, and identify
prescribers with questionable opioid prescribing patterns for these
beneficiaries.93 94 The process required under the SUPPORT
for Patients and Communities Act and this proposed rule to identify
potential fraud or abuse, can help ensure that state officials and
staff implementing the state's program integrity, PDMP, and DUR
functions work collaboratively to identify opportunities for DUR
activities to assist in the identification of potential fraud and
abuse.
---------------------------------------------------------------------------
\92\ ``Prescription Drug Monitoring Frequently Asked Questions
(FAQ)[bond] The PDMP Training and Technical Assistance Center.''
Prescription Drug Monitoring Frequently Asked Questions (FAQ) [bond]
The PDMP Training and Technical Assistance Center,
www.pdmpassist.org/content/prescription-drug-monitoring-frequently-asked-questions-faq.
\93\ Beaton, Thomas. ``Preventing Provider Fraud through Health
IT, Data Analytics.'' HealthPayerIntelligence, 5 Oct. 2018, https://healthpayerintelligence.com/news/preventing-provider-fraud-through-health-it-data-analytics.
\94\ OIG, Opioids in Medicare Part D: Concerns about Extreme Use
and Questionable Prescribing, OEI-02-17-00250, July 2017. https://oig.hhs.gov/oei/reports/oei-02-17-00250.pdf.
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2. Other CMS Proposed Standards
In addition to codifying the SUPPORT for Patients and Communities
Act requirements, we are proposing additional minimum DUR standards in
this proposed rule that states would be required to implement as part
of their DUR programs at Sec. 456.703(h)(1)(vii). Specifically, under
our authority to implement section 1927(g) of the Act and consistent
with the goals of the SUPPORT for Patients and Communities Act to help
combat the nation's opioid overdose epidemic, we are proposing minimum
standards related to MAT and identification of beneficiaries who could
be at high risk of opioid overdose and should be considered for co-
prescription or co-dispensing of naloxone. These additional standards
are being included to ensure prescribed drugs are: (1) Appropriate; (2)
medically necessary; and (3) not likely to result in adverse medical
results.
State DUR programs would be required to include prospective safety
edit alerts, automatic retrospective claims review, or a combination of
these approaches as determined by the state, to identify cases where a
beneficiary is prescribed an opioid after the beneficiary has been
prescribed one or more drugs used for MAT, and prospective safety edit
alerts, automatic retrospective claims review, or a combination of
these approaches as determined by the state to expand appropriate
utilization of naloxone for dispensing to individuals at risk of
overdose. As further discussed below, we are proposing these minimum
requirements to further implement section 1927(g) of the Act to prevent
and reduce the inappropriate use of opioids and potentially associated
adverse medical results, consistent with the
[[Page 37313]]
provisions under section 1004 of the SUPPORT for Patients and
Communities Act.
a. Medication Assisted Treatment (MAT)
To further implement section 1927(g)(1) of the Act and consistent
with section 1004 of the SUPPORT for Patients and Communities Act, we
are proposing to require states to establish prospective safety edit
alerts, automatic retrospective claims review, or a combination of
these approaches as determined by the state, to identify cases where a
beneficiary is prescribed an opioid after the beneficiary has been
prescribed one or more drugs used for MAT or had an OUD diagnosis
within a specified number of days (as determined by the state), without
having a new indication to support utilization of opioids (such as a
new cancer diagnosis, new palliative care treatment or entry into
hospice).
MAT is treatment for opioid use disorder (OUD) that includes
addiction treatment and services plus a medication approved by FDA for
opioid addiction, detoxification, or maintenance treatment or relapse
prevention for opioid use disorder.\95\ The SUPPORT for Patient and
Communities Act defines MAT to include all FDA approved drugs and
licensed biological products to treat opioid disorders, as well as
counseling services and behavioral therapies with respect to the
provision of such drugs and biological products.\96\ MAT has proven to
be clinically effective in treating opioid use disorder and
significantly reduces the need for inpatient detoxification
services.\97\ Medications such as buprenorphine and methadone, in
combination with counseling and behavioral therapies, provide a whole-
patient approach to the treatment of opioid use disorders.
---------------------------------------------------------------------------
\95\ There are four drugs or drug combinations currently used in
MAT: Buprenorphine; naltrexone; buprenorphine in combination with
naloxone; and methadone.
\96\ Support for Patients and Communities Act, Section 1006(b).
Requirement For State Medicaid Plans To Provide Coverage For
Medication-Assisted Treatment.
\97\ ``Medication and Counseling Treatment''. September 28,
2015. Available at https://www.samhsa.gov/medication-assisted-treatment/treatment.
---------------------------------------------------------------------------
Using opioid medications during the course of MAT is dangerous from
a clinical perspective. A safety edit designed to notify healthcare
providers about the co-administration of MAT drugs and opioids would be
useful to alert the providers regarding a possible need for increased
coordination of care. We believe states could take effective action to
help prevent adverse medical results, possible OUD relapse, and
increase coordination of care in patients with a history of OUD. We
understand states need considerable flexibility when implementing these
reviews to address complicated patient populations. The proposed
prospective safety edits, automatic retrospective claims reviews, or a
combination of these approaches, would help identify cases where a
beneficiary is prescribed an opioid after the beneficiary has been
prescribed one or more drugs used for MAT or has received an OUD
diagnosis. Accordingly, we are proposing that states would have
flexibility to determine which of these DUR approaches the state would
implement, including the flexibility to incorporate both into an
effective DUR program. State flexibility also would extend to
specifying the time period between the prior episode of MAT or OUD
diagnosis (or most recent prior episode of MAT or OUD diagnosis) and
the subject opioid prescription that, if not met, would trigger the
alert (for example, an opioid prescription within 24 months of the end
of the most recent episode of MAT would trigger a prospective safety
edit). Flexibility could also extend to diagnoses where opioid use
after MAT is appropriate without compromising OUD treatment (for
example in end of life care or in cancer patients with severe pain
resulting from their disease or that does not respond to alternative
pain management options).
In consideration of clinical recommendations to ensure appropriate
MAT treatment, and to prevent opioid related abuse and misuse, we
believe the proposed prospective safety edits and/or retrospective
claim reviews are necessary to assure that prescriptions are
appropriate, medically necessary, and not likely to result in adverse
medical results, and to accomplish other purposes of the DUR program
under section 1927(g) of the Act and of the SUPPORT for Patients and
Communities Act. This proposed requirement is authorized by and
expected to advance the purposes of section 1927(g) of the Act and is
consistent with the purposes of section 1004 of the SUPPORT for
Patients and Communities Act. Accordingly, we are proposing at Sec.
456.703(h)(1)(vii)(A) that states be required to implement reviews to
alert when the beneficiary is prescribed an opioid after the
beneficiary has been prescribed one or more drugs used for Medication
Assisted Treatment (MAT) for an opioid use disorder or has been
diagnosed with an opioid use disorder, within a timeframe specified by
the state, in the absence of a new indication to support utilization of
opioids (such as new cancer related pain diagnosis or entry into
hospice care). In addition to helping ensure appropriate utilization of
medications, these edits would assist in coordination of care, and
potentially in improved treatment of pain.
b. Naloxone
To further implement section 1927(g)(1) of the Act, and consistent
with section 1004 of the SUPPORT for Patients and Communities Act, we
are proposing and seeking comment on requiring states to establish
prospective safety edit alerts, automatic retrospective claims review,
or a combination of these approaches as determined by the state, to
identify beneficiaries who could be at high risk of opioid overdose and
should be considered for co-prescription or co-dispensing of naloxone
with the goal of expanding appropriate utilization of naloxone to
individuals at risk of opioid overdose. Naloxone is a medication
designed to rapidly reverse opioid overdose by binding to opioid
receptors and reversing the effects of opioids. Naloxone works quickly
to restore normal respiration to a person whose breathing has slowed or
stopped as a result of an opioid overdose, including both illicit and
prescription opioids. However, naloxone only works if a person has
opioids in their system; the medication has no effect if opioids are
absent.\98\
---------------------------------------------------------------------------
\98\ ``Understanding Naloxone.'' Harm Reduction Coalition.
Available at https://harmreduction.org/issues/overdose-prevention/overview/overdose-basics/understanding-naloxone/.
---------------------------------------------------------------------------
The prescribing or coprescribing of naloxone in patients at
elevated risk for opioid overdose or for those who have overdosed on
opioids can save lives.\99\ We recommend states consider ways for
expanded use, distribution and access to naloxone when clinically
appropriate.
---------------------------------------------------------------------------
\99\ NEJM Journal Watch: Summaries of and Commentary on Original
Medical and Scientific Articles from Key Medical Journals, HHS-
recommends-coprescribing-naloxone-with-opioids-high. https://www.jwatch.org/fw114907/2018/12/20/hhs-recommends-coprescribing-naloxone-with-opioids-high.
---------------------------------------------------------------------------
When implementing this review, states should determine standards
for identifying individuals at high risk for opioid overdose, such as
individuals who have been discharged from emergency medical care
following opioid overdose, individuals who use heroin or misuse
prescription pain relievers as well as those who use high dose opioids
for long-term management of chronic pain.\100\ Before starting and
[[Page 37314]]
periodically during continuation of opioid therapy, clinicians should
evaluate risk factors for opioid-related harms. When prescribing
opioids, the CDC Guideline recommends clinicians should incorporate
strategies to mitigate opioid risks, including considering offering
naloxone when factors that increase risk for opioid overdose, such as
history of overdose, history of substance use disorder, higher opioid
dosages (>=50 MME/day), or concurrent benzodiazepine use, are
present.\101\ We understand states need considerable flexibility when
implementing this review to address a complex problem and are proposing
that states would have flexibility to determine which DUR approach the
state would implement into an effective DUR program: Either or both of
prospective safety edits and/or retrospective claims reviews. Further,
we propose that states would have flexibility to determine the
particular criteria they would use to identify which beneficiaries may
be at high risk of opioid overdose such that they should be considered
for co-prescription or co-dispensing of naloxone.
---------------------------------------------------------------------------
\100\ Ibid.
\101\ ``CDC Guidelines for Prescribing Opioids for Chronic
pain.'' Available at https://www.cdc.gov/drugoverdose/pdf/guidelines_at-a-glance-a.pdf.
---------------------------------------------------------------------------
In consideration of clinical recommendations to expand naloxone use
to prevent adverse medical events among those who are prescribed
opioids or those who may be at high risk of opioid overdose or have
previously overdosed, we believe this review is necessary to assure at
risk individuals are receiving appropriate treatment that is not likely
to result in adverse medical results, and to accomplish other purposes
of the DUR program under section 1927(g) of the Act and of the SUPPORT
for Patients and Communities Act. Accordingly, we are proposing at
Sec. 456.703(h)(1)(vii)(B) that states be required to implement
prospective safety edit alerts, automatic retrospective claims review,
or a combination of these approaches as determined by the state to
identify when a beneficiary could be at high risk of opioid overdose
and should be considered for co-prescription or co-dispensing of
naloxone. We anticipate that this proposal may help expand appropriate
utilization of naloxone, including by facilitating dispensing to
individuals at risk of overdose.
3. Exclusions
The above described DUR requirements added to section 1902(oo) of
the Act by section 1004 of the SUPPORT for Patients and Communities
Act, which we propose to implement along with additional related
proposals under section 1927(g) of the Act at Sec. 456.703(h)(1)(i)
through (vii)(B), do not and would not apply for individuals who are
receiving hospice or palliative care or those in treatment for cancer;
residents of a long-term care facility, a facility described in section
1905(d) of the Act (that is, an intermediate care facility for the
intellectually disabled), or of another facility for which frequently
abused drugs are dispensed for residents through a contact with a
single pharmacy; or other individuals the state elects to treat as
exempted from such requirements.
States are expected to consult national guidelines and are
encouraged to work with their pharmacy and therapeutics (P&T) and DUR
committees to identify other clinically appropriate patient populations
for possible exclusion from the safety reviews specified in Sec.
456.703(h)(1)(i) through (vii) to avoid impeding critical access to
needed medication when managing specific complex disease states.
We understand states need considerable flexibility when
implementing these reviews to address complicated patient populations.
We propose to implement this statutory exclusion at Sec.
456.703(h)(2), such that states would not be required to implement the
specified DUR requirements with respect to these populations. However,
while states are not required to comply with these requirements with
respect to these individuals, we clarify, and propose to codify in the
regulation, that states voluntarily may apply to them the prospective
safety edits and claims review automated processes otherwise required
under the SUPPORT for Patients and Communities Act and this proposed
rule.\102\ We also recognize that it is important for patients who are
taking opioid-based MAT drugs to continue their therapy without
disruption. In this regard, states may at their discretion include
these drugs in their DUR reviews under section 1927(g) of the Act.
---------------------------------------------------------------------------
\102\ Section 1902(oo)(3) of the Act, as added by section 1004
of the SUPPORT for Patients and Communities Act.
---------------------------------------------------------------------------
4. Managed Care Requirements
Consistent with section 1902(oo)(1)(A)(ii) of the Act, as added by
the SUPPORT for Patients and Communities Act, states also must ensure
that their contracts with MCOs under section 1903(m) of the Act and
managed care entities (MCEs) under section 1905(t)(3) of the Act
require that the MCOs or MCEs have safety edits, an automated review
processes, a program to monitor antipsychotic medications in children,
and fraud and abuse identification requirements as described in this
proposed rule for individuals eligible for medical assistance under the
state plan (or waiver of the state plan) who are enrolled with the
entity, subject to the exclusions of individuals as proposed in section
1902(oo)(1)(C) of the Act.\103\ States must include these DUR
provisions in managed care contracts by October 1, 2019. Although the
foregoing provisions added by the SUPPORT for Patients and Communities
Act address only MCOs and MCEs in the managed care context, we propose
also to extend these requirements to contracts with prepaid ambulatory
health plans (PAHPs) and prepaid inpatient health plans (PIHPs) under
our authority in section 1902(a)(4) under which existing PIHP and PAHP
requirements are based. Thus, under this proposed rule, states would be
required to include prepaid ambulatory health plans (PAHPs) and prepaid
inpatient health plans (PIHPs) when uniformly implementing the updates
and requirements specified in the SUPPORT for Patients and Communities
Act for all Medicaid managed care plans. Furthermore, as required by
section 1004 of the SUPPORT for Patients and Communities Act, each
Medicaid MCO and MCE within a state must also operate a DUR program
that complies with the above specified requirements. We are proposing
to define MCEs in Sec. 438.2 to have the meaning given to the term
under section 1932(a)(1)(B) of the Act, which defines the term to mean
a Medicaid managed care organization, as defined in section
1903(m)(1)(A), that provides or arranges for services for enrollees
under a contract pursuant to section 1903(m) of the Act, or a primary
care case manager, as defined in section 1905(t)(2) of the Act. Managed
care regulations at Sec. 438.3(s)(4) require Medicaid managed care DUR
programs in which an MCO, PIHP, or PAHP contracts to provide coverage
for covered outpatient drugs to operate consistently with section
1927(g) of the Act and part 456, subpart K, and that state contracts
must be updated to include these requirements. We are proposing to
amend the regulation at Sec. 438.3(s) and (s)(4) and (5) to require
that MCEs comply with the requirements in section 1902(oo)(1)(A) of the
Act as implemented in these proposed regulations, similar to MCOs,
PIHPs, and PAHPs.
---------------------------------------------------------------------------
\103\ H.R. 6. 24 Oct. 2018, www.congress.gov/115/bills/hr6/BILLS-115hr6enr.pdf. Page 17.
---------------------------------------------------------------------------
[[Page 37315]]
5. Reporting Requirements
Consistent with section 1927(g)(3)(D) of the Act, we require each
State Medicaid agency to submit to us an annual report on the operation
of its Medicaid DUR program. Under Sec. 456.712(a), the state must
require the DUR Board to prepare and submit, on an annual basis, a
report to the State Medicaid agency. Under Sec. 456.712(b), each State
Medicaid agency must in turn submit this report to us, as well as
specified additional information, including but not limited to
descriptions of the nature and scope of the state's prospective and
retrospective DUR programs, detailed information on the specific DUR
criteria and standards in use, a description of the actions taken to
ensure compliance with predetermined standards requirements in Sec.
465.703, a summary of the educational interventions used and an
assessment of their effect on quality of care, and an estimate of the
cost savings generated as a result of the DUR program. We have compiled
state FFS Medicaid DUR annual reports since 1995 and has published them
on Medicaid.gov since 2010. Since 2016, Sec. 438.3(s)(4) requires any
MCO, PIHP or PAHP that covers covered outpatient drugs to operate a DUR
program that complies with section 1927(g) of the Act and 42 CFR part
456, subpart K, as though these requirements applied to the MCO, PIHP,
or PAHP instead of the state, including requirements related to annual
DUR reporting. Given the commercial nature of many managed care
entities, incorporation of information posted to Medicaid.gov provides
new considerations with regards to public disclosure of information
received by CMS.
In an effort to share and encourage innovative and collaborative
practices, we also are proposing to publish all information received in
annual DUR reports from managed care programs and FFS programs on a CMS
website. Accordingly, we are proposing to add new paragraph (c) to
Sec. 456.712 to provide that all FFS and managed care DUR reports
received by CMS under Sec. 456.712(b) and, as applicable, pursuant to
Sec. 438.3(s), will be publicly posted on a website maintained by CMS
for the sharing of reports and other information concerning Medicaid
DUR programs.
6. State Plan Amendment (SPA) Requirements
The SUPPORT for Patients and Communities Act amended the state plan
requirements in section 1902(a) of the Act to include a new paragraph
(85), which requires the state plan to provide that the state is in
compliance with the new drug review and utilization requirements set
forth in section 1902(oo) of the Act, as also added by the SUPPORT for
Patients and Communities Act. The SUPPORT for Patients and Communities
Act also requires all states to implement these requirements by October
1, 2019, and to submit an amendment to their state plan no later than
December 31, 2019, consistent with the state plan amendment
requirements in 42 CFR part 430, subpart B, to describe how the state
addresses these provisions in the state plan. States are also expected
to give appropriate tribal notification, as required, if applicable.
Guidance regarding requirements was issued to states in a CMS
informational bulletin https://www.medicaid.gov/federal-policy-guidance/downloads/cib080519-1004.pdf. If provisions in this proposed
rule that would implement the amendments made by section 1004 of the
SUPPORT for Patients and Communities Act are finalized, an additional
state plan amendment potentially could be needed to ensure that state
plans are in compliance with applicable final regulations. We would
expect to provide related guidance in connection with any final rule.
III. Collection of Information Requirements
Under the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3501 et
seq.), we are required to provide 60-day notice in the Federal Register
and solicit public comment before a ``collection of information''
requirement is submitted to the Office of Management and Budget (OMB)
for review and approval. For the purposes of the PRA and this section
of the preamble, collection of information is defined under 5 CFR
1320.3(c) of the PRA's implementing regulations.
To fairly evaluate whether an information collection must be
approved by OMB, section 3506(c)(2)(A) of the PRA requires that we
solicit comment on the following issues:
The need for the information collection and its usefulness
in carrying out the proper functions of our agency.
The accuracy of our estimate of the information collection
burden.
The quality, utility, and clarity of the information to be
collected.
Recommendations to minimize the information collection
burden on the affected public, including automated collection
techniques.
We are soliciting public comment on each of these issues for the
following sections of this proposed rule that contain information
collection requirements.
A. Wage Estimates
To derive average costs, we used data from the U.S. Bureau of Labor
Statistics' May 2018 National Occupational Employment and Wage
Estimates (http://www.bls.gov/oes/current/oes_nat.htm). Table 3
presents the mean hourly wage, the cost of fringe benefits and overhead
(calculated at 100 percent of salary), and the adjusted hourly wage.
Table 3--National Occupational Employment and Wage Estimates
----------------------------------------------------------------------------------------------------------------
Fringe
Occupation Mean hourly benefits and Adjusted
Occupation title code wage ($/hr) overhead ($/ hourly wage ($/
hr) hr)
----------------------------------------------------------------------------------------------------------------
Chief Executives................................ 11-1011 96.22 96.22 192.44
Data Entry and Information Processing Workers... 43-9020 17.05 17.05 34.10
General Operations Mgr.......................... 11-1021 59.56 59.56 119.12
----------------------------------------------------------------------------------------------------------------
[[Page 37316]]
As indicated, we are adjusting our employee hourly wage estimates
by a factor of 100 percent. This is necessarily a rough adjustment,
both because fringe benefits and overhead costs vary significantly from
employer to employer, and because methods of estimating these costs
vary widely from study to study. Nonetheless, we believe that doubling
the hourly wage to estimate total cost is a reasonably accurate
estimation method.
B. Proposed Information Collection Requirements (ICRs)
1. ICRs Regarding State Plan Requirements, Findings, and Assurances
(Sec. 447.518(d)(1) and (2))
The following proposed changes will be submitted to OMB for
approval under control number 0938-TBD (CMS-10722). The control number
is currently to be determined (TBD) but will be issued by OMB upon
their clearance of this proposed rule's information collection request
(a.k.a., ``PRA package''). The subsequent final rule will set out the
assigned control number.
Under section 1902(a)(30)(A) the Act, we are granted the authority
to require that methods and procedures be established by states
relating to the utilization of, and the payment for, care and services
available under the state plan process (including but not limited to
utilization review plans) as may be necessary to safeguard against
unnecessary utilization of such care and services and to assure that
state payments to providers of Medicaid services are consistent with
efficiency, economy, and quality of care.
To that end, as part of the state plan approval process relative to
the VBP program, this rule proposes new reporting requirements that
would affect the 51 state Medicaid programs (the 50 states and the
District of Columbia). Specifically, a State participating in value-
based purchasing arrangements must report data described in Sec.
447.518(d)(1) and (2) on an annual basis and no later than 60 days
after the end of each year. The reported data would include: The State
name, National drug code(s) (for drugs covered under the VBP), product
FDA list name, number of prescriptions, cost to the State to administer
VBP (for example: Systems changes, tracking evidence or outcomes-based
measures, etc.), and the total savings generated by the supplemental
rebate due to the VBP. The reporting requirements would be applicable
to both FFS and MCO COD claims. Following our evaluation of the
response to this proposed rule, we may decide to issue a form to help
ensure that the proper information is reported at the proper address.
We estimate it would take an additional 4 hours at $119.12/hr for a
general operations manager to collect the supplemental rebate agreement
VBP drug utilization information, add this data to the state's
quarterly report when due annually (we will choose the quarter in which
the annual data will be due), and submit the report to CMS. In
aggregate we estimate an ongoing annual burden of 306 hours (6 hr/
report x 1/year x 51 respondents) at a cost of $36,444.60 (816 hr x
$119.12/hr).
2. ICRs Regarding Requirements for States (Sec. 447.511(b), (d) and
(e))
The following proposed changes will be submitted to OMB for
approval under control number 0938-0582 (CMS-R-144). Subject to
renewal, the control number is currently set to expire on July 31,
2020. It was last approved on March 14, 2019, and remains active.
Under proposed Sec. 447.511(b) states, territories, and the
District of Columbia would be required to ensure by certification that
the quarterly rebate invoices sent to manufacturers that participate in
the MDRP no later than 60 days after the end of each rebate period via
CMS-R-144 (Quarterly Medicaid Drug Rebate Invoice), mirrors the data
sent to us. This rule would not impose any changes to the CMS-R-144
form.
Under proposed Sec. 447.511(d) states would now be required to
certify that their SDUD meets the requirements specified under proposed
Sec. 447.511(e) via a certification statement. We believe the
certification would not impose a significant burden as we will provide
systems access to state certifiers to log in once per quarter to
certify their SDUD report. Certifiers would have to apply for a CMS
user ID and password, and keep current with required annual computer-
based training, as current state staff with access to our systems must
do. To comply with the proposed certification requirements, States must
already have system edits in place to find and correct SDUD outliers
prior to reporting to manufacturers and CMS.
We estimate it would take 5 hours at $192.44/hr for the State
Medicaid Director, Deputy State Medicaid Director, another individual
with equivalent authority, or an individual with directly delegated
authority from one of the above to obtain current CMS systems access.
In aggregate we estimate a one-time system ID/password access burden of
280 hours (5 hr x 56 respondents) at a cost of $53,883 (280 hr x
$192.44/hr).
We also estimate an additional annual burden of 2 hours (or 30
minutes/quarter) at $192.44/hr for a chief executive to certify such
data and to add the state data certification language in their
submission. In aggregate we estimate a burden of 112 hours (2 hr x 56
respondents) at a cost of $21,553 (112 hr x $192.44/hr).
3. ICRs Regarding the Payment of Claims 18 (Sec. 433.139(b)(2),
(b)(3)(i) and (b)(3)(ii)(B))
The following proposed changes will be submitted to OMB for
approval under control number 0938-1265 (CMS-10529). Subject to
renewal, the control number is currently set to expire on April 30,
2021. It was last approved on June 10, 2019, and remains active.
This proposed rule would implement provisions of Bipartisan Budget
Act of 2018 (BBA 2018) (Pub. L. 115-123, enacted February 9, 2018),
which includes several provisions that modify COB and TPL in both
statute and regulation related to special treatment of certain types of
care and payment in Medicaid and Children's Health Insurance Program
Reauthorization Act of 2009 (CHIPRA) (Pub. L. 111-3, enacted February
4, 2009). Section 53102 of BBA 2018 amended the TPL provision at
section 1902(a)(25) of the Act. Effective February 9, 2018, section
53102(a)(1) of the BBA 2018 amended section 1902(a)(25)(E) of the Act
to require states to cost avoid claims for prenatal care for pregnant
women including labor and delivery and postpartum care, and to allow
the state Medicaid agency 90 days instead of 30 days to pay claims
related to medical support enforcement services, as well as requiring
states to collect information on TPL before making payments. Effective
April 18, 2019, section 7 of the Medicaid Services Investment and
Accountability Act of 2019 (the MSIAA) amended section 1902(a)(25)(E)
of the Act to allow 100 days instead of 90 days to pay claims related
to medical support enforcement services, as well as requiring states to
collect information on TPL before making payments.
On April 18, 2019, section 7 of the MSIAA amended section
1902(a)(25)(E) of the Act to allow 100 days instead of 90 days to pay
claims related to medical support enforcement and preventive pediatric
services, as well as requiring all states, the District of Columbia,
and the territories (56 respondents) to collect information on third
party TPL before making payments (Sec. 433.139(b)(2), (b)(3)(i) and
(b)(3)(ii)(B)). Under the authority in section 1902(a)(25)(A) of the
Act, our regulations at 42 CFR part 433, subpart D establishes
[[Page 37317]]
requirements for state Medicaid agencies to support the coordination of
benefits (COB) effort by identifying TPL. Sections 433.139(b)(2),
(b)(3)(i) and (b)(3)(ii)(B) detail the exception to standard COB cost
avoidance by allowing pay and chase for certain types of care, as well
as the timeframe allowed prior to Medicaid paying claims for certain
types of care. Title XIX of the Act requires state Medicaid programs to
identify and seek payment from liable third parties, before billing
Medicaid.
We estimate it would take 1 hour at $34.10/hr for a data entry/
information processing worker to collect information on TPL and report
that information to CMS on CMS-64 (approved by OMB under the
aforementioned OMB control number and CMS ID number) on a quarterly
basis. In aggregate we estimate an annual burden of 224 hours (1 hr/
response x 4 responses/year x 56 respondents) at a cost of $7,638 (224
hr x $34.10/hr).
C. Summary of Proposed Requirements and Annual Burden Estimates
Table 4 sets out our proposed annual burden estimates.
Table 4--Summary of Annual Requirement and Burden
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Time per
Section under Title 42 of the CFR Number of Responses (per response Total time Labor rate ($/ Total cost ($) OMB Control No. (CMS ID No.)
respondents year) (hours) (hours) hr)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Sec. 447.511................................ 56 1 5 280 192.44 53,883 0938-0582 (CMS-R-144).
Sec. 447.511................................ 56 4 0.5 112 192.44 21,553 0938-0582 (CMS-R-144).
Sec. 447.518(d)(1) and (2).................. 51 1 6 306 119.12 36,440 0938-TBD (CMS-10722).
Sec. 433.139(b)(2), (b)(3)(i) and 56 4 1 224 34.10 7,638 0938-1265 (CMS-10529).
(b)(3)(ii)(B).
-------------------------------------------------------------------------------------------------------------------------------------------------
Total..................................... 56 13 Varies 1,432 Varies 180,276 n/a.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
D. Submission of PRA-Related Comments
We have submitted a copy of this proposed rule to OMB for its
review of the rule's information collection requirements. The
requirements are not effective until they have been approved by OMB and
a final rule is issued.
To obtain copies of the supporting statement and any related forms
for the proposed collections discussed above, please visit the CMS
website at www.cms.hhs.gov/Paperwork ReductionActof1995, or call the
Reports Clearance Office at 410-786-1326.
We invite public comments on these potential information collection
requirements. If you wish to comment, please submit your comments
electronically as specified in the DATES and ADDRESSES Section of this
proposed rule and identify the rule (CMS-2482-P) the ICR's CFR
citation, and OMB control number.
V. Response to Comments
Because of the large number of public comments we normally receive
on Federal Register documents, we are not able to acknowledge or
respond to them individually. We will consider all comments we receive
by the date and time specified in the DATES section of this preamble,
and, when we proceed with a subsequent document, we will respond to the
comments in the preamble to that document.
VI. Regulatory Impact Statement
A. Statement of Need
This proposed rule would implement changes to:
Section 1927 of the Act
Statutory changes from the Medicaid Services Investment
and Accountability Act of 2019 (Pub. L. 116-16, enacted April 18,
2019), BBA 2018 and the Affordable Care Act;
Section 602 of BBA 2015, which amended section 1927(c)(3)
of the Act;
Section 2501(d) of the Affordable Care Act, which added
section 1927(c)(2)(C) of the Act;
Section 1927(b)(2)(A) of the Act requiring states to
report to each manufacturer not later than 60 days after the end of
each rebate period;
Changes and additions to section 1927(g)(1) of the Act as
set forth by section 1004 of the SUPPORT for Patients and Communities
Act; and
Title XIX of the Act and section 7 of the Medicaid
Services Investment and Accountability Act of 2019 amending section
1902(a)(25)(E) of the Act ((Sec. 433.139(b)(2), (b)(3)(i) and
(b)(3)(ii)(B)).
Changes made by Public Law 116-59, the Continuing
Appropriations Act, 2020, and Health Extenders Act of 2019 (Health
Extenders Act), which made changes to section 1927(k)(1) and
1927(k)(11) of the Act.
B. Overall Impact
We have examined the impact of this rule as required by Executive
Order 12866 on Regulatory Planning and Review (September 30, 1993),
Executive Order 13563 on Improving Regulation and Regulatory Review
(January 18, 2011), the Regulatory Flexibility Act (RFA) (September 19,
1980, Pub. L. 96-354), section 1102(b) of the Act, section 202 of the
Unfunded Mandates Reform Act of 1995 (March 22, 1995; Pub. L. 104-4),
Executive Order 13132 on Federalism (August 4, 1999) and Executive
Order 13771 on Reducing Regulation and Controlling Regulatory Costs
(January 30, 2017).
Executive Orders 12866 and 13563 direct agencies to assess all
costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits (including potential economic, environmental, public
health and safety effects, distributive impacts, and equity). A
regulatory impact analysis (RIA) must be prepared for major rules with
economically significant effects ($100 million or more in any 1 year).
This rule does not reach the economic threshold and thus is not
considered a major rule.
The RFA requires agencies to analyze options for regulatory relief
of small entities. For purposes of the RFA, small entities include
small businesses, nonprofit organizations, small pharmaceutical
manufacturers participating in the Medicaid Drug Rebate Program, and
small governmental jurisdictions. Most hospitals and most other
providers and suppliers are small entities, either by nonprofit status
or by having revenues of less than $8.0 million to $41.5 million in any
1 year. Individuals and states are not included in the definition of a
small entity. We are not preparing an analysis for the RFA because we
have determined, and the Secretary certifies, that this proposed rule
would not have a significant economic impact on a substantial number of
small entities.
In addition, section 1102(b) of the Act requires us to prepare an
RIA if a rule may have a significant impact on the operations of a
substantial number of small rural hospitals. This analysis must conform
to the provisions of section 603
[[Page 37318]]
of the RFA. For purposes of section 1102(b) of the Act, we define a
small rural hospital as a hospital that is located outside of a
Metropolitan Statistical Area for Medicare payment regulations and has
fewer than 100 beds. We are not preparing an analysis for section
1102(b) of the Act because we have determined, and the Secretary
certifies, that this proposed rule with comment period would not have a
significant impact on the operations of a substantial number of small
rural hospitals.
Section 202 of the Unfunded Mandates Reform Act of 1995 also
requires that agencies assess anticipated costs and benefits before
issuing any rule whose mandates require spending in any 1 year of $100
million in 1995 dollars, updated annually for inflation. In 2020, that
threshold is approximately $156 million. This rule would have no
consequential effect on state, local, or tribal governments or on the
private sector.
Executive Order 13132 establishes certain requirements that an
agency must meet when it issues a proposed rule (and subsequent final
rule) that imposes substantial direct compliance costs on state and
local governments, preempts state law, or otherwise has federalism
implications. Since this regulation does not impose any substantial
direct compliance costs on state or local governments, preempt state
law, or otherwise have federalism implications, the requirements of
Executive Order 13132 are not applicable.
Executive Order 13771 (January 30, 2017) requires that the costs
associated with significant new regulations ``to the extent permitted
by law, be offset by the elimination of existing costs associated with
at least two prior regulations.'' This proposed rule is not subject to
the requirements of E.O. 13771 because it is expected to result in no
more than de minimis costs.
In accordance with the provisions of Executive Order 12866, this
regulation was reviewed by the Office of Management and Budget.
List of Subjects
42 CFR Part 433
Administrative practice and procedure, Child support, Claims, Grant
programs-health, Medicaid, Reporting and recordkeeping requirements.
42 CFR Part 438
Grant programs-health, Medicaid, Reporting and Recordkeeping
requirements.
42 CFR Part 447
Accounting, Administrative practice and procedure, Drugs, Grant
programs-health, Health facilities, Health professions, Medicaid,
Reporting and recordkeeping requirements, Rural areas.
42 CFR Part 456
Administrative practice and procedure, Drugs, Grant programs-
health, Health facilities, Medicaid, Reporting and recordkeeping
requirements.
For the reasons set forth in the preamble, the Centers for Medicare
& Medicaid Services proposes to amend 42 CFR chapter IV as set forth
below:
PART 433--STATE FISCAL ADMINISTRATION
0
1. The authority citation for part 433 is revised to read as follows:
Authority: 42 U.S.C. 1302.
0
2. Section 433.139 is amended by--
0
a. Removing and reserving paragraph (b)(2); and
0
b. Revising paragraphs (b)(3)(i) and (b)(3)(ii)(B).
The revisions read as follows:
Sec. 433.139 Payment of claims.
* * * * *
(b) * * *
(2) [Reserved]
(3) * * *
(i) The claim is for preventive pediatric services, including early
and periodic screening, diagnosis and treatment services provided for
under part 441, subpart B of this chapter, that are covered under the
State plan; or
(ii) * * *
(B) For child support enforcement services beginning February 9,
2018, the provider certifies that before billing Medicaid, if the
provider has billed a third party, the provider has waited 100 days
from the date of the service and has not received payment from the
third party.
* * * * *
PART 438--MANAGED CARE
0
3. The authority citation for part 438 continues to read as follows:
Authority: 42 U.S.C. 1302.
0
4. Section 438.2 is amended by adding the definition of ``Managed care
entities (MCEs) in alphabetical order to read as follows:
Sec. 438.2 Definitions.
* * * * *
Managed care entity (MCE) means a Medicaid managed care
organization, as defined in section 1903(m)(1)(A) of the Act, that
provides or arranges for services for enrollees under a contract
pursuant to section 1903(m) of the Act or a primary care case manager,
as defined in section 1905(t)(2) of the Act.
* * * * *
0
5. Section 438.3 is amended by revising paragraphs (s) introductory
text, (s)(4) and (5) to read as follows:
Sec. 438.3 Standard contract requirements.
* * * * *
(s) Requirements for MCOs, MCEs, PIHPs, or PAHPs that provide
covered outpatient drugs. Contracts that obligate MCOs, MCEs, PIHPs or
PAHPs to provide coverage of covered outpatient drugs must include the
following requirements:
* * * * *
(4) The MCO, MCE, PIHP or PAHP must operate a drug utilization
review program that complies with the requirements described in section
1927(g) of the Act and part 456, subpart K of this chapter, as if such
requirement applied to the MCO, MCE, PIHP, or PAHP instead of the
State.
(5) The MCO, MCE, PIHP or PAHP must provide a detailed description
of its drug utilization review program activities to the State on an
annual basis.
* * * * *
PART 447--PAYMENTS FOR SERVICES
0
6. The authority citation for part 447 continues to read as follows:
Authority: 42 U.S.C. 1302 and 1396r-8.
0
7. Section 447.502 is amended--
0
a. In the definition of ``Bundled sale'' by adding paragraph (3);
0
b. By adding the definition of ``CMS-authorized supplemental rebate
agreement'' in alphabetical order;
0
c. By revising the definition of ``Innovator multiple source drug'';
0
d. By adding the definition of ``Line extension'' in alphabetical
order;
0
e. By revising the definition of ``Multiple source drug'';
0
f. By adding the definition of ``New formulation'' in alphabetical
order;
0
g. By revising the definitions of ``Oral solid dosage form'' and
``Single source drug'';
0
h. By adding the definitions of ``Value-based purchasing (VBP)
arrangement'' in alphabetical order; and
0
i. By revising the definition of ``Wholesaler''.
The additions and revisions read as follows:
Sec. 447.502 Definitions.
* * * * *
[[Page 37319]]
Bundled sale * * *
(3) Value-based purchasing (VBP) arrangements may qualify as a
bundled sale, if the arrangement contains a performance requirement
such as an outcome(s) measurement metric.
* * * * *
CMS-authorized supplemental rebate agreement means an agreement
that is approved through a state plan amendment (SPA) by CMS, which
allows a state to enter into single and/or multi-state supplemental
drug rebate arrangements that generate rebates that are at least as
large as the rebates set forth in the Secretary's national rebate
agreement with drug manufacturers. Revenue from these rebates must be
paid directly to the state and be used by the state to offset a state's
drug expenditures resulting in shared savings with the Federal
government.
* * * * *
Innovator multiple source drug means a multiple source drug,
including an authorized generic drug, that is marketed under a new drug
application (NDA) approved by FDA, unless the Secretary determines that
a narrow exception applies (as described in this section or any
successor regulation). It also includes a drug product marketed by any
cross-licensed producers, labelers, or distributors operating under the
NDA and a covered outpatient drug approved under a biologics license
application (BLA), product license application (PLA), establishment
license application (ELA) or antibiotic drug application (ADA).
* * * * *
Line extension means, for a drug, a new formulation of the drug,
but does not include an abuse-deterrent formulation of the drug (as
determined by the Secretary).
* * * * *
Multiple source drug means, for a rebate period, a covered
outpatient drug, including a drug product approved for marketing as a
non-prescription drug that is regarded as a covered outpatient drug
under section 1927(k)(4) of the Act, for which there is at least 1
other drug product which meets all of the following criteria:
(1) Is rated as therapeutically equivalent (under the FDA's most
recent publication of ``Approved Drug Products with Therapeutic
Equivalence Evaluations'' which is available at http://www.accessdata.fda.gov/scripts/cder/ob/).
(2) Except as provided at section 1927(k)(7)(B) of the Act, is
pharmaceutically equivalent and bioequivalent, as defined at section
1927(k)(7)(C) of the Act and as determined by FDA.
(3) Is sold or marketed in the United States during the period.
* * * * *
New formulation means, for a drug, any change to the drug, provided
that the new formulation contains at least one active ingredient in
common with the initial brand name listed drug. New formulations
include, but are not limited to: Extended release formulations; changes
in dosage form, strength, route of administration, ingredients,
pharmacodynamics, or pharmacokinetic properties; changes in indication
accompanied by marketing as a separately identifiable drug (for
example, a different NDC); and combination drugs, such as a drug that
is a combination of two or more drugs or a drug that is a combination
of a drug and a device.
* * * * *
Oral solid dosage form means an orally administered dosage form
that is not a liquid or gas at the time the drug enters the oral
cavity.
* * * * *
Single source drug means a covered outpatient drug, including a
drug product approved for marketing as a non-prescription drug that is
regarded as a covered outpatient drug under section 1927(k)(4) of the
Act, which is produced or distributed under a new drug application
approved by the FDA, including a drug product marketed by any cross-
licensed producers or distributors operating under the new drug
application unless the Secretary determines that a narrow exception
applies (as described in this section or any successor regulation), and
includes a covered outpatient drug that is a biological product
licensed, produced, or distributed under a biologics license
application approved by the FDA.
* * * * *
Value-based purchasing (VBP) arrangement means an arrangement or
agreement intended to align pricing and/or payments to an observed or
expected therapeutic or clinical value in a population (that is,
outcomes relative to costs) and includes, but is not limited to:
(1) Evidence-based measures, which substantially link the cost of a
drug to existing evidence of effectiveness and potential value for
specific uses of that product.
(2) Outcomes-based measures, which substantially link payment for
the drug to that of the drug's actual performance in patient or a
population, or a reduction in other medical expenses.
Wholesaler means a drug wholesaler that is engaged in wholesale
distribution of prescription drugs to retail community pharmacies,
including but not limited to repackers, distributors, own-label
distributors, private-label distributors, jobbers, brokers, warehouses
(including distributor's warehouses, chain drug warehouses, and
wholesale drug warehouses), independent wholesale drug traders, and
retail community pharmacies that conduct wholesale distributions.
0
8. Section 447.504 is amended by--
0
a. Removing paragraph (b)(2);
0
b. Redesignating paragraph (b)(3) as paragraph (b)(2);
0
c. Revising paragraphs (c)(25) through (29); and
0
d. Revising paragraphs (e)(13) through (17).
The revisions read as follows:
Sec. 447.504 Determination of average manufacturer price.
* * * * *
(c) * * *
(25) Manufacturer coupons to a consumer redeemed by the
manufacturer, agent, pharmacy or another entity acting on behalf of the
manufacturer, but only to the extent that the manufacturer ensures the
full value of the coupon is passed on to the consumer and the pharmacy,
agent, or other AMP-eligible entity does not receive any price
concession.
(26) Manufacturer-sponsored programs that provide free goods,
including but not limited to vouchers and patient assistance programs,
but only to the extent that the manufacturer ensures: The voucher or
benefit of such a program is not contingent on any other purchase
requirement; The full value of the voucher or benefit of such a program
is passed on to the consumer; and the pharmacy, agent, or other AMP-
eligible entity does not receive any price concession.
(27) Manufacturer-sponsored drug discount card programs, but only
to the extent that the manufacturer ensures the full value of the
discount is passed on to the consumer and the pharmacy, agent, or the
other AMP eligible entity does not receive any price concession.
(28) Manufacturer-sponsored patient refund/rebate programs, to the
extent that the manufacturer ensures that the manufacturer provides a
full or partial refund or rebate to the patient for out-of-pocket costs
and the pharmacy, agent, or other AMP eligible entity does not receive
any price concession.
(29) Manufacturer copayment assistance programs, to the extent that
the manufacturer ensures the program benefits are provided entirely to
the
[[Page 37320]]
patient and the pharmacy, agent, or other AMP eligible entity does not
receive any price concession
* * * * *
(e) * * *
(13) Manufacturer coupons to a consumer redeemed by the
manufacturer, agent, pharmacy or another entity acting on behalf of the
manufacturer, but only to the extent that the manufacturer ensures the
full value of the coupon is passed on to the consumer and the pharmacy,
agent, or other AMP-eligible entity does not receive any price
concession.
(14) Manufacturer-sponsored programs that provide free goods,
including, but not limited to vouchers and patient assistance programs,
but only to the extent that the manufacturer ensures: The voucher or
benefit of such a program is not contingent on any other purchase
requirement; The full value of the voucher or benefit of such a program
is passed on to the consumer; and the pharmacy, agent, or other AMP
eligible entity does not receive any price concession.
(15) Manufacturer-sponsored drug discount card programs, but only
to the extent that the manufacturer ensures the full value of the
discount is passed on to the consumer and the pharmacy, agent, or the
other AMP-eligible entity does not receive any price concession.
(16) Manufacturer-sponsored patient refund/rebate programs, to the
extent that the manufacturer ensures the manufacturer provided a full
or partial refund or rebate to the patient for out-of-pocket costs and
the pharmacy agent, or other AMP eligible entity does not receive any
price concession.
(17) Manufacturer copayment assistance programs, to the extent that
the manufacturer ensures the program benefits are provided entirely to
the patient and the pharmacy agent, or other AMP eligible entity does
not receive any price concession
* * * * *
0
9. Section 447.505 is amended--
0
a. In paragraph (a), by revising the definition of ``Best price'';
0
b. In paragraphs (c)(8) and (9), by removing the phrase ``extent that''
and adding in its place the phrase ``extent the manufacturer ensures
that'';
0
c. In paragraphs (c)(10), (11) and (12), by removing the phrase ``that
the'' and adding in its place the phrase ``that the manufacturer
ensures the''; and
0
d. By revising paragraphs (d)(3).
The revisions reads as follows:
Sec. 447.505 Determination of best price.
(a) * * *
Best price means, for a single source drug or innovator multiple
source drug of a manufacturer (including the lowest price available to
any entity for an authorized generic drug), the lowest price available
from the manufacturer during the rebate period to any wholesaler,
retailer, provider, health maintenance organization, nonprofit entity,
or governmental entity in the United States in any pricing structure
(including capitated payments) in the same quarter for which the AMP is
computed. The lowest price available from a manufacturer may include
varying best price points for a single dosage form and strength as a
result of a value based purchasing arrangement (as defined at Sec.
447.502).
* * * * *
(d) * * *
(3) The manufacturer must adjust the best price for a rebate period
if cumulative discounts, rebates, or other arrangements subsequently
adjust the prices available, to the extent that such cumulative
discounts, rebates or other arrangements are not excluded from the
determination of best price by statute or regulation.
0
10. Section 447.506 is amended by revising paragraph (b) to read as
follows:
Sec. 447.506 Authorized generic drugs.
* * * * *
(b) Exclusion of authorized generic drugs from AMP by a primary
manufacturer. The primary manufacturer must exclude from its
calculation of AMP any sales of authorized generic drugs to wholesalers
for drugs distributed to retail community pharmacies when reporting the
AMP of the brand name drug of that authorized generic drug.
* * * * *
0
11. Section 447.509 is amended--
0
a. By revising paragraphs (a)(4)(i) introductory text, (a)(4)(i)(A),
(a)(4)(ii) introductory text, (a)(4)(ii)(A), and (a)(5);
0
b. In paragraph (a)(6) introductory text, by removing word ``rebate''
and adding in its place the phrase ``basic rebate''; and
0
c. By adding paragraphs (a)(7), (8) and (9).
The revisions and additions read as follows:
Sec. 447.509 Medicaid drug rebates (MDR).
(a) * * *
(4) * * *
(i) In the case of a drug that is a line extension of a single
source drug or an innovator multiple source drug, provided that the
initial single source drug or innovator multiple source drug is an oral
solid dosage form, the rebate obligation for the rebate periods
beginning January 1, 2010 through September 30, 2018 is the amount
computed under paragraphs (a)(1) through (3) of this section for such
new drug or, if greater, the product of all of the following:
(A) The AMP of the line extension of a single source drug or an
innovator multiple source drug.
* * * * *
(ii) In the case of a drug that is a line extension of a single
source drug or an innovator multiple source drug, provided that the
initial single source drug or innovator multiple source drug is an oral
solid dosage form, the rebate obligation for the rebate periods
beginning on or after October 1, 2018 is the amount computed under
paragraphs (a)(1) through (3) of this section for such new drug or, if
greater, the amount computed under paragraph (a)(1) of this section
plus the product of all of the following:
(A) The AMP of the line extension of a single source drug or an
innovator multiple source drug.
* * * * *
(5) Limit on rebate. In no case will the total rebate amount exceed
100 percent of the AMP of the single source or multiple source
innovator drug.
* * * * *
(7) Additional rebate for noninnovator multiple source drugs. In
addition to the basic rebate described in paragraph (a)(6) of this
section, for each dosage form and strength of a noninnovator multiple
source drug, the rebate amount will be increased by an amount equal to
the product of the following:
(i) The total number of units of such dosage form and strength paid
for under the State plan in the rebate period.
(ii) The amount, if any, by which:
(A) The AMP for the dosage form and strength of the drug for the
period exceeds: (B) The base date AMP for such dosage form and
strength, increased by the percentage by which the consumer price index
for all urban consumers (United States city average) for the month
before the month in which the rebate period begins exceeds such index
associated with the base date AMP of the drug. The base date AMP has
the meaning of AMP set forth in sections 1927(c)(2)(A)(ii)(II),
1927(c)(2)(B) and 1927(c)(3)(C) of the Act.
(8) Total rebate. The total rebate amount for noninnovator multiple
source drugs is equal to the basic rebate amount plus the additional
rebate amount, if any.
(9) Limit on rebate. In no case will the total rebate amount exceed
100 percent of the AMP for the noninnovator multiple source drug.
* * * * *
[[Page 37321]]
0
12. Section 447.510 is amended by adding paragraph (b)(1)(vi) to read
as follows:
Sec. 447.510 Requirement for manufacturers.
* * * * *
(b) * * *
(1) * * *
(vi) The change is a result of a VBP arrangement, as defined in
Sec. 447.502, requiring the manufacturer to make changes outside of
the 12-quarter rule, when the outcome must be evaluated outside of the
12-quarter period.
* * * * *
0
13. Section 447.511 is amended--
0
a. In paragraph (a) introductory text, by removing the phrase
``following data:'' and adding in its place the phrase ``following data
and any subsequent changes to the data fields on the CMS-R-144 Medicaid
Drug Rebate Invoice form:'';
0
b. By revising paragraph (b); and
0
c. By adding paragraphs (d) and (e).
The revision and additions read as follows:
Sec. 447.511 Requirements for States.
* * * * *
(b) Data submitted to CMS. On a quarterly basis, the State must
submit drug utilization data to CMS, which will be the same information
as submitted to the manufacturers on the CMS-R-144, as specified in
paragraph (a) of this section. The state data submission will be due no
later than 60 days after the end of each rebate period. In the event
that a due date falls on a weekend or Federal holiday, the submission
will be due on the first business day following that weekend or Federal
holiday. Any adjustments to previously submitted data will be
transmitted to the manufacturer and CMS in the same reporting period.
* * * * *
(d) State data certification. Each data submission in this section
must be certified by one of the following:
(1) The State Medicaid Director (SMD);
(2) The Deputy State Medicaid Director (DSMD);
(3) An individual other than the SMD or DSMD, who has authority
equivalent to an SMD or DSMD; or
(4) An individual with the directly delegated authority to perform
the certification on behalf of an individual described in paragraphs
(d)(1) through (3) of this section.
(e) State data certification language. Each data submission by a
state must include the following certification language: ``I hereby
certify, to the best of my knowledge, that the state's data submission
is complete and accurate at the time of this submission, and was
prepared in accordance with the state's good faith, reasonable efforts
based on existing guidance from CMS, section 1927 of the Act and
applicable federal regulations. I further certify that the state has
transmitted data to CMS, including any adjustments to previous rebate
periods, in the same reporting period as provided to the manufacturer.
Further, the state certifies that it has applied any necessary edits to
the data for both CMS and the labeler to avoid inaccuracies at both the
NDC/line item and file/aggregate level. Such edits are to be applied in
the same manner and in the same reporting period to both CMS and the
manufacturer.''
0
14. Section 447.518 is amended by adding paragraphs (d)(1) and (2) to
read as follows:
Sec. 447.518 State plan requirements, findings, and assurances.
* * * * *
(d) * * *
(1) A State participating in value-based purchasing arrangements
must report data described in paragraph (d)(2) of this section on an
annual basis.
(2) Within 60 days of the end of each year, the State must submit
all of the following data:
(i) State.
(ii) National drug code(s) (for drugs covered under the VBP).
(iii) Product FDA list name.
(iv) Number of prescriptions.
(v) Cost to the State to administer VBP (for example, systems
changes, tracking outcomes, etc.).
(vi) Total savings generated by the supplemental rebate due to VBP.
PART 456--UTILIZATION CONTROL
0
15. The authority citation for part 456 is revised to read as follows:
Authority: 42 U.S.C. 1302.
0
16. Section 456.703 is amended by--
0
a. Redesignating paragraph (h) as (i); and
0
b. Adding a new paragraph (h).
The addition reads as follows:
Sec. 456.703 Drug use review programs.
* * * * *
(h) Minimum standards for DUR programs. (1) Minimum standards. In
operating their DUR programs, states must include the following minimum
standards:
(i) Prospective safety edit limitations for opioid prescriptions,
as specified by the State, on:
(A) Days' supply for patients not currently receiving opioid
therapy for initial prescription fills;
(B) Quantity of prescription dispensed for initial and subsequent
prescription fills;
(C) Therapeutically-duplicative initial and subsequent opioid
prescription fills; and
(D) Early refills, for subsequent prescription fills.
(ii) Prospective safety edit limitations for opioid prescriptions,
as specified by the State, on the maximum daily morphine milligram
equivalent for treatment of chronic pain, for initial and subsequent
prescription fills.
(iii) A retrospective claims review automated process that
indicates prescription fills of opioids in excess of the prospective
safety edit limitations specified by the state under paragraphs
(h)(1)(i) or (ii) of this section to provide for the ongoing review of
opioid claims data to identify patterns of fraud, abuse, excessive
utilization, inappropriate or medically unnecessary care, or
prescribing or billing practices that indicate abuse or provision of
inappropriate or medically unnecessary care among prescribers,
pharmacists and individuals receiving Medicaid benefits.
(iv) A retrospective claims review automated process and, at the
option of the state, prospective safety edits that monitor when an
individual is concurrently prescribed opioids and:
(A) Benzodiazepines; or
(B) Antipsychotics.
(v) A program to monitor and manage the appropriate use of
antipsychotic medications by children enrolled under the State plan,
including any Medicaid expansion groups for the Children's Health
Insurance Program (CHIP).
(vi) A process to identify potential fraud or abuse of controlled
substances by individuals enrolled under the State plan, health care
providers prescribing drugs to individuals so enrolled, and pharmacies
dispensing drugs to individuals so enrolled.
(vii) Prospective safety edits, retrospective claims review
automated processes, or a combination of these approaches as determined
by the state, to identify when:
(A) A beneficiary is prescribed an opioid after the beneficiary has
been prescribed one or more drugs used for Medication Assisted
Treatment (MAT) of an opioid use disorder or has been diagnosed with an
opioid use disorder, within a timeframe specified by the state, in the
absence of a new indication to support utilization of opioids (such as
new cancer diagnosis or entry into hospice care); and
(B) A beneficiary could be at high risk of opioid overdose and
should be considered for co-prescription or co-dispensing of naloxone.
[[Page 37322]]
(2) Exclusion. The requirements in paragraphs (h)(1)(i) through
(vii) of this section do not apply with respect to individuals
receiving hospice or palliative care or treatment for cancer;
individuals who are residents of long-term care facilities,
intermediate care facilities for the intellectually disabled, or
facilities that dispense frequently abused drugs through a contract
with a single pharmacy; or other individuals the state elects to
exempt. While States are not required to apply these requirements with
respect to these individuals, States may elect to do so.
* * * * *
0
17. Section 456.712 is amended by adding paragraph (c) to read as
follows:
Sec. 456.712 Annual report.
* * * * *
(c) Public availability. All FFS and managed care DUR reports
received by CMS under paragraph (b) of this section and, as applicable,
pursuant to Sec. 438.3(s) of this chapter, will be publicly posted on
a website maintained by CMS for the sharing of reports and other
information concerning Medicaid DUR programs.
Dated: February 6, 2020.
Seema Verma,
Administrator, Centers for Medicare & Medicaid Services.
Dated: June 11, 2020.
Alex M. Azar II,
Secretary, Department of Health and Human Services.
[FR Doc. 2020-12970 Filed 6-16-20; 4:15 pm]
BILLING CODE 4120-01-P
