AHA Comments on the Centers for Medicare & Medicaid Services’ Most Favored Nation Model Proposed Rule

The Honorable Chiquita Brooks-LaSure
Administrator
Centers for Medicare & Medicaid Services
Hubert H. Humphrey Building
200 Independence Avenue, S.W., Room 445-G
Washington, DC 20201

Re: CMS–5528–P: Most Favored Nation Model Proposed Rule (Vol. 86, No. 151), August 10, 2021

Dear Administrator Brooks-LaSure:

On behalf of our nearly 5,000 member hospitals, health systems and other health care organizations, our clinician partners – including more than 270,000 affiliated physicians, 2 million nurses and other caregivers – and the 43,000 health care leaders who belong to our professional membership groups, the American Hospital Association (AHA) appreciates the opportunity to comment on the Centers for Medicare & Medicaid Services’ (CMS) Most Favored Nation (MFN) Model Proposed Rule.

The AHA strongly supports CMS’ proposal to rescind the November 2020 MFN interim final rule and its associated regulatory text. We appreciate CMS’ consideration of our concerns regarding the model and encourage the agency to replace it with a thoughtful effort at drug pricing reform. In our comments submitted Jan. 25, 2021 on the interim final rule, AHA expressed significant concerns about the MFN model’s legality and structure. We also were very concerned about its potential effects on beneficiaries’ access to needed drugs, and had urged the agency not to proceed with its implementation. We noted that the MFN rule’s legal infirmities fell within three major categories: (1) failure to follow proper procedures in promulgating the rule, (2) exceeding statutory authority, and (3) constitutional violations.

AHA also raised concerns about the MFN rule’s unnecessarily blunt approach to addressing drug prices. For example, instead of enacting targeted policies that attempt to lower drug prices and reduce patient out-of-pocket costs, the model instead would have drastically reduced reimbursement to hospitals and put patients at risk. CMS itself estimated that, within three years, nearly one in five Medicare Part B enrollees may have had no access to drugs subject to the MFN rule, and that the reduction in utilization of these drugs would account for half of the rule’s projected savings to Medicare. We noted that it was particularly disturbing that this operationally burdensome policy was to be implemented in the middle of the COVID-19 pandemic.

Therefore, again, the AHA strongly supports CMS’s proposal to rescind the MFN rule. We look forward to working with the agency to replace it with a serious effort at reforming drug pricing. We have worked with our members to document the challenges hospitals and health systems face with drug prices and to develop policy solutions that protect access to critical therapies while encouraging and supporting much-needed innovation. Our full set of recommendations are outlined on the AHA’s webpage.

We appreciate your consideration of these issues. Please contact me if you have questions or feel free to have a member of your team contact Roslyne Schulman, AHA’s director for policy, at rschulman@aha.org.

Sincerely,

/s/

Stacey Hughes
Executive Vice President