Medicare Drug Price Negotiation Guidance Released – Industry News, March 2023

Medicare Drug Price Negotiation Guidance Released

On March 15, 2023, the U.S. Department of Health and Human Services (HHS) issued initial guidance outlining the requirements and parameters for the Medicare Drug Price Negotiation Program for price applicability year 2026.

For the first time, because of measures outlined in the Inflation Reduction Act, Medicare has been granted the ability to negotiate prices directly with drug companies. As laid out in the Drug Price Negotiation Program Timeline, this initial guidance – with requests for public comment – is one of several steps for the first year of negotiation. The newly released guidance outlines how Medicare intends to use its new authority to effectively approach the first rounds of negotiations, which will occur during 2023 and 2024, with drug companies for lower prices effective in 2026. Additional key dates include:

  • September 1, 2023, the first 10 Medicare Part D drugs will be selected for initial price effective in 2026.
  • September 1, 2024, the negotiated maximum fair prices for these 10 drugs will be published, effective in 2026.
  • 15 additional Part D drugs will be selected by CMS for price negotiation for 2027.
  • 20 additional Part D drugs will be selected by CMS for price negotiation for 2028.

Comments on the released initial guidance are encouraged by CMS and must be submitted by April 14, 2023. CMS anticipates revied guidance to be issued for the first year of negotiation in Summer of 2023.

CMS Issues E/M Corrections

On March 15, 2023, CMS released corrections to the CY 2023 Medicare Physician Fee Schedule (MPFS). The corrections include updates to prolonged services for “Other” Evaluation and Management (E/M) Visits, specifically the time thresholds which must be met in order to bill for prolonged services.

CMS reviewed how time was calculated for determining when the prolonged service code, G0316 could be billed. The previous times by CMS indicated significantly higher thresholds the level 3 code for initial or subsequent hospital visits had to meet in order to bill G0316.

CMS has a rounded threshold billing time of 95 minutes for CPT® 99236, indicating the provider would need to spend 15 minutes beyond the 95 minutes, setting a threshold of 110 minutes for this code. The AMA has defined CPT® 99236 with 85 minutes in the definition, 15 minutes beyond this is 100 minutes. Providers must ensure they verify the payer for the respective services to ensure the correct thresholds and codes are supported and billed based on the variances in these prolonged services. The table below reflects the updates by CMS in the correction release.
mar 2023 fig 1
Initial Inpatient and Observation Care Example HCPCS G0316 **UPDATED by CMS**
mar 2023 fig 2
Subsequent Inpatient and Observation Care Example HCPCS G0316 **UPDATED by CMS**
mar 2023 fig 3

FDA Approves AI Ultrasound

Clarius Mobile Health has received approval by the U.S. Food and Drug Administration (FDA) for their artificial intelligence (AI) ultrasound application for musculoskeletal (MSK) imaging.

The new MSK AI model automatically identifies, measures, and analyzes specific anatomical sites within the foot, ankle and kneen including the plantar fascia, Achilles tendon, and patellar tendon in real-time. When clinicians pause the image, the device uses AI to identify the tendon using a transparent overlay, label the tendon, and determine the thickest region. Measurement calipers can also be adjusted by users to allow for any adjustments to support clinical decision-making.

“AI automation is the new frontier and we’re excited to be the world’s first to receive FDA clearance to use AI for musculoskeletal ultrasound. This application will blow the doors open for physiotherapists and orthopedic clinicians to use ultrasound to deliver faster patient care.”
–Clarius President and CEO Ohad Arazi

MedPAC Recommends Pay Increase

The Medicare Payment Advisory Commission (MedPAC) recommended an increase in fee-for-service pay under the physician fee schedule (PFS) for calendar year 2024.

In their yearly report released March 15, 2023, the commission recommended an increase in payments under the PFS payment system by 50 percent of the projected increase in the Medicare Economic Index (MEI). Based on current 2024 MEI projections, the recommendation would equate to a 1.45% increase in PFS payments. The commission also recommended this calculated update become permanent and built into subsequent years’ payment rates. This would replace the current laws which are set to increase payment rates by 1.25% in 2024 but then expire at the end of the year.

The report also outlined the commission’s recommendation for a new safety-net policy which would enact a non-budget-neutral add-on payment under the PFS payment system for services provided to low-income Medicare beneficiaries. This add-on payment would not be subject to beneficiary cost sharing and is recommended to equal a clinician’s allowed charges for applicable beneficiaries multiplied by:

  • 15 percent for primary care clinicians and
  • 5 percent for non-primary care clinicians

The commission believes the safety-net payments to clinicians would encourage the maintenance or improvement of access to care for low-income beneficiaries.

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Prescription Drug Inflation Rebate Program

The Department of Health and Human Services (HHS), through the Centers for Medicare and Medicaid Services (CMS) announced a list of prescription drugs which Medicare Part B beneficiaries may see lower coinsurances effective April 1 – June 30, 2023.

As part of the Inflation Reduction Act, The Medicare Prescription Drug Inflation Rebate Program aims to reduce coinsurance for beneficiaries with Part B coverage while discouraging drug companies from increasing drug prices faster than inflation. CMS released a list of 27 prescription drugs which beneficiaries may see a savings between $2 and $390 per average dose, depending on individual coverage for the time period of April 1 to June 30, 2023.

For the first time, within the April 2023 Medicare Part B Quarterly Sales Pricing (ASP) file, coinsurance adjustments for Part B rebatable drugs will be included as required by the Inflation Reduction Act. The list of Part B drugs impacted by the coinsurance adjustment may be adjusted quarterly. Additional information can be located within the Fact Sheet.

ACR Requests MRI Safety Guideline Input

The American College of Radiology (ACR) is requesting community feedback on their newly released ACR Manual on Magnetic Resonance (MR) Safety draft. The newest version contains substantial new content and safety recommendations while building off prior editions.

The safety manual, utilized by practitioners, technologists, administrators, and patients applies not only to clinical diagnostic imaging but also to research and atypical settings such as linear accelerator MR and interventional MR.
The ACR Committee on MR Safety is requesting comments from radiologists, medical physicists, technologists and other stakeholders related to changes including:

  • Updated MR personnel training levels and associated level-specific elements of MR Safety training.
  • Updated MR personnel staffing recommendations, including in routine, emergency and remote scanning scenarios.
  • Updated guidance on “full stop/final check” processes in routine and emergency/complex situations, with associated elements of final patient/subject preparation.
  • Expanded and updated information related to objects, equipment and implanted devices; recommendations to help minimize projectile risk with use of pocketless attire for MR personnel and tethering of external equipment in Zone III/Zone IV.
  • New MR Risk Assessment Appendix as it pertains to management of patients with implanted devices with unclear MR conditions for safe scanning.
  • New extensive checklist of elements to consider in site MR safety policies and standard operating procedures patterned on the ACR MR safety checklist required for ACR MR accredited facilities.

Stakeholders have until April 14, 2023, to submit comments and recommendations.