CMS Proposes to Rescind the Most Favored Nation Interim Final Rule and Associated Regulations

On August 10, 2021, CMS published a proposed rule (86 Fed. Reg 43618) to rescind the Most Favored Nation Model interim final rule that was published on November 27, 2020.

The November 2020 interim final rule established a 7-year nationwide, mandatory MFN Model, under section 1115A of the Social Security Act, with the model performance period beginning on January 1, 2021. The MFN Model would test an alternative way for Medicare to pay for certain Medicare Part B single source drugs and biologicals and biosimilars.  In the interim final rule CMS stated that it found that there was good cause to waive the notice and comment requirements under sections 553(b)(B) of the Administrative Procedure Act because of the particularly acute need for affordable Medicare Part B drugs during the COVID–19 pandemic.  However, on December 28, 2020, the U.S. District Court for the Northern District of California issued a nationwide preliminary injunction which preliminarily enjoined HHS from implementing the MFN Model and the November 2020 interim final rule. 

CMS believes that the nationwide preliminary injunction precluding implementation of the MFN Model on January 1, 2021, findings by multiple courts of procedural issues with the November 2020 interim final rule, and stakeholders’ expressions of concern about the model start date, formed an adequate reason to rescind regulations added by the November 2020 interim final rule and remove the associated regulatory text.  CMS does not believe there would be any disruption to reliance interests or Medicare program administration if this proposed rule were to take effect.  CMS is inviting comments on its proposal to rescind and remove the regulations at 42 CFR part 513, which also would withdraw the MFN Model.

Comments are due on October 12, 2021.

Read the notice here, and submit comments here.

Advocacy contact: Linwood Rayford at (202) 401-6880 or email at linwoodrayford@sba.gov.