Proposed Operational Updates to the Discarded Drug Refund Policy

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Summary

In CY 2024 rulemaking, CMS proposes operational clarification to the discarded drug refund policy finalized last year.

Background

In prior Insights, Avalere has highlighted operationalization considerations for discarded drug refund policies, including modifier implementation requirements, unique circumstances for increased applicable percentages, and opportunities for stakeholders to engage and build a response strategy.

In the Calendar Year (CY) 2024 Medicare Physician Fee Schedule (MPFS) Notice of Proposed Rulemaking (NPRM), the Centers for Medicare & Medicaid Services (CMS) builds on policies finalized last year for refunds for any amount discarded for applicable single-dose container and single-use package drugs and proposes additional clarification on the operationalization of this policy.

In the NPRM, the CMS proposed several concepts to further operationalize the drug refund provision, including:

  • A timeline to operationalize wastage reports and refund payments, including a methodology for calculating refund amounts in lagged claims data (initial refund reports for 2023 claims would be issued no later than December 31, 2024)
  • Clarification that Medicare Advantage claims are excluded from refund amount calculations
  • A methodology for calculating the refund for a drug with multiple manufacturers
  • Additional increases to the applicable percentage for specific low-volume dose drugs and for orphan drugs with low patient volume
  • An application process for manufacturers to request an increased applicable percentage for individual drugs with unique circumstances
    • Manufacturers must submit a written request, Food & Drug Administration-approved labeling, and justification for the increased percentage.
    • CMS also specified specific product types it proposed would not be eligible for an increased applicable percentage.

As part of the rulemaking process, stakeholders may provide input on these proposed policies by September 11, 2023. CMS will provide final decisions related to the policies proposed here in the MPFS rule expected in late October or early November 2023.

Have You Evaluated the Steps You Should Take?

Stakeholders have an opportunity to engage with CMS to continue to shape operationalization of this policy via the public comment period. To learn how Avalere’s Part B reimbursement and policy experts can support your response planning and risk mitigation strategies, connect with us.

Webinar | A Closer Look at Patient Support On June 6 at 2 PM ET, Avalere experts will explore how potential implications of the Inflation Reduction Act (IRA)’s out-of-pocket cap, in addition to other key regulatory and policy activities shaping benefit design and patient cost-share (e.g., EHB), could impact patient commercial and foundation assistance. Learn More
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