Medicare Drug Price Negotiation Program – Industry News, January 2023

Dates for Medicare Drug Price Negotiation Program

The U.S. Department of Health and Human Services (HHS) announced an estimated timeline for the first year of the Medicare Drug Price Negotiation Program under the Inflation Reduction Act (IRA), which aims to lower drug costs by allowing Medicare to negotiate prescription drug prices.

The IRA gives Medicare the authority to directly negotiate drug prices for certain high expenditure, single source Medicare Part B and Part D drugs. The initial negotiated price of a selected 10 Part D high expenditure, single source drugs will begin in year 2026. An additional 15 Part D drug prices will be negotiated and applicable for year 2027, 15 Part B or Part D drugs for 2028 and 20 Part B or Part D drugs for year 2029.

CMS stresses the importance of public feedback including patients and consumers, Part D plan sponsors and Medicare Advantage organizations, drug manufactures, hospitals and health care providers, wholesalers, pharmacies and others for the implementation and success of the program for the initial price applicability year 2026.

“We cannot do this important work alone and will engage with the public early and often. We are proactively seeking feedback and insights from a broad range of interested parties throughout implementation of this historic law.”
CMS Administrator Chiquita Brooks-LaSure

Members of the public are welcome to share feedback and input in writing by email at:

Additional Resources

Concerns Raised Over Newly Approved Prostate Treatment

Experts have voiced some concerns centered around the referral process, supply issues, and patient selection upon initiating prostate cancer radiotherapy with lutetium Lu 177 vipivotide tetraxetan, known as Pluvicto™.

The Dana Farber Cancer Institute reported of the 146 patients referred to them between May and October 2022 to undergo therapy using Pluvicto™, less than half of the approved patients had completed one cycle of treatment.

The report highlights the three main obstacles of treatment as listed below:

  1. Referral process – The authors of the report indicated the need for a referral process that includes case reviewed during multidisciplinary tumor board.
  2. Supply issues – The institute reported patient treatment delays by three months due to low supply of the therapy agent, including 5% patient death while awaiting treatment. The concern of original treatment plans, which are based on PSMA PET/CT imaging, remaining appropriate have also been raised due to the time delay in treatment.
  3. Patient selection – A patient being SPMA-avid does not automatically qualify them for Pluvicto™ treatment. In order to be approved for the new treatment, patients need to have already undergone chemotherapy and a novel androgen receptor-directed therapy.

The authors of the report conclude: “We believe that close collaboration between medical oncology and nuclear medicine, multidisciplinary TBs, and careful patient selection can address these challenges through streamlined processes, which will be necessary as the demands for treatment are likely to increase pending data from trials evaluating 177Lu-PSMA-617 in earlier settings of prostate cancer disease.”

Public Health Emergency Slated to End

On January 11, 2023, Secretary of Health and Human Services, Xavier Becerra, renewed the Public Health Emergency (PHE) that was originally declared January 31, 2020. Becerra stated the renewal was in response to the continued consequences of the COVID-19 pandemic and was made after consultation with public health officials. This declaration extends the PHE until April 11.

On January 31, 2023, it was announced the intent to extend the PHE until May 11, 2023. After repeatedly ensuring at least a 60-day notice of the end of the PHE, the current announcement meets that requirement, providing 101 days until the emergency officially ends. Some waivers and flexibilities granted during the COVD-19 PHE will end on May 11, 2023, with the PHE; others will extend 151 days after.

In August 2022, CMS released Creating a Roadmap for the End of the COVID-19 Public Health Emergency which provided CMS’ strategic plan to support the health care system and address the support both during and after the PHE.

Payment Processing Issue Identified

With the recent deletion of observation codes (99217-99220, 99224-99226), a payment issue involving the appropriate reporting of observation visits has been identified by multiple payers. With the consolidation of Inpatient and Observation E/M codes, some payers have been denying codes 99221-99223 and 99231-99233 with place of service (POS) code 22 (on campus-outpatient hospital) in error, as reported by First Coast Service Options.

As a reminder, typically observation visits are considered outpatient for billing purposes and should be billed with outpatient PSO 22 as directed by the AMA within the below Q&A from the E/M 2023:Advancing landmark updates across more settings of care webinar.


Additional information can be located within the CPT® E/M guidelines.

New EOM Factsheet Available

The Enhancing Oncology Model (EOM) works to build off of insights gained from the Oncology Care Model (OCM) and aims to enhance quality of care furnished to beneficiaries undergoing chemotherapy while reducing Medicare spending.

EOM is a 5-year voluntary model that requires participating oncology practices to take on financial and performance accountability for chemotherapy episodes of care surrounding common cancer types. The anticipated model launch date is set for July 1, 2023.

The dedicated EOM website provides a multitude of resources to include the new benchmarking fact sheet, FAQs, and several recorded webinars. CMS also encourages stakeholders to sign up for the EOM listserv to receive timely updates.

FDA Updates Radiation Protection Recs

The U.S. Food and Drug Administration (FDA) has provided amended and repealed sections of their radiologic health regulations in regard to their recommendations for radiation protection during medical procedures.

Effective February 21, 2023, the FDA published a rule entitled Radiological Health Regulations; Amendments to Records and Reports for Radiation Emitting Electronic Products; Amendments to Performance Standards for Diagnostic X-ray, Laser, and Ultrasonic Products. Within the rule, the FDA finalized regulations for amendment or repeal of radiation protection recommendations for specific uses, records and reporting requirements for electronic products, applications for variances, and performance standards for diagnostic x-ray systems and their major components, laser products, and ultrasonic therapy products.

The rule finalized the repeal of gonadal shielding during exams involving ionizing radiation which the FDA stated have become “outdated and unnecessary.” The rule also removes and reduces certain annual reports and test record requirements by FDA and State regulators, revise timing for report submissions for accidental radiation occurrences (AROs), repeal performance of standard for ultrasonic products limited to a subset of physical therapy devices, among other revisions.

The National Council on Radiation Protection and Measurements (NCRP) published an informative pamphlet that further explains the reasoning and support behind shielding changes.

OIG Recommends CMS Assist in ASP Calculations

The Department of Health and Human Services’ Office of Inspector General (OIG) released a report in which they identified inconsistencies in how average sales prices (ASPs) for Part B drugs are calculated and recommended the Centers for Medicare and Medicaid Services (CMS) provide guidance to ensure accurate and consistent calculations.

Addressing concerns regarding the accuracy of ASPs and as directed by Congress in the Consolidated Appropriations Act, 2021, the OIG conducted a review of manufacturer-reported ASP data. The OIG found, through manufacturer surveys, a small number of inconsistencies in manufacturer calculations of the ASPs. Through information gathered from the surveys, the OIG also noted manufacturers expressed concerns that CMS had published fewer regulations and less overall guidance in calculating ASPs leaving manufacturers to rely on their own assumptions when performing their calculations.

As a result of their review, the OIG recommends CMS review current guidance, as it relates to the areas addressed in the reports, to determine if additional guidance would ensure more accurate manufacturer calculations with special attention to be paid to guidance regarding TRICARE-related sales and determinations of bona fide service fees. CMS has concurred with OIG’s recommendations.

HHS to Decide 340B Underpayment Remedy

In a recent decision by the U.S. District Court for the District of Columbia, the Department of Health and Human Services (HHS) will be allowed to propose an appropriate remedy to past underpayments to hospitals which participate in the 340B drug pricing program.

After a U.S. Supreme Course decision in 2022, HHS was ordered to cease their 22.5% 340B reimbursement cuts for the remainder of 2022. Within the 2023 outpatient prospective payment system (OPPS) final rule, HHS said it would address any proposals to remedy CYs 2018-2021 underpayments before the 2024 OPPS rulemaking is complete. In it’s most recent ruling, the district court has granted HHS discretion on how to remediate the previous years of underpayment; a decision which hospitals find disappointing as the cuts represent an estimated $1.6 billion loss to hospitals. Hospitals want repayment with interest as the cuts span five years of under funding to 340B participating hospitals.

“We are disappointed the district court gave the Department of Health and Human Services discretion in how to remediate the department’s unlawful payment cuts for 340B hospitals. These steep reductions have undermined essential hospitals and have come at the worst possible time, as providers struggle with the heavy financial pressures of COVID-19.”
Dr. Bruce Siegel, present and CEO of American’s Essential Hospitals

Helpful Resources

  • Find clarification and helpful information at First Coast’s 2023 E/M Center, which includes an E/M interactive worksheet.
  • Ensure you are prepared for July 1, 2023 JZ reporting requirements with – Medicare Program Discarded Drugs and Biologicals – JW Modifier and JZ Modifier Policy Frequently Asked Questions
  • Stay up-to-date on revisions with the most updated Chimeric Antigen Receptor T-cell Therapy NCD
  • Review a multitude of topics with Noridian’s A/B YouTube Playlist for on demand education.
  • Ensure you are appending the correct Modifier with CGS. Part A and Part B Modifier Finder Tools.
  • Novitas’ New Provider Roadmap provides a tool to guide new providers through the Medicare process.