The Centers for Medicare & Medicaid Services (CMS) released the final Medicaid covered outpatient drug regulation on Thursday, January 21, 2016. The final rule will be effective on April 1, 2016, except that the expansion of the Medicaid program to include Puerto Rico and  the Territories will not be effective until April 1, 2017. CMS did not finalize, and is seeking comments on, the provisions regarding the definition and identification of line extension drugs. Comments are due 60 days after the date the final rule is published in the Federal Register, which is scheduled to occur on February 1, 2016. 
 
CMS also issued a fact sheet that summarizes key provisions of the regulation, as well as a press release. In a related bulletin issued on January 22, 2016, CMS announced that it will publish draft Federal Upper Limits (FULs) calculated in accordance with the final rule for two months beginning in January 2016 before publishing final FULs in late March 2016.
 
We have prepared two blacklines to assist in your review of the final rule. The first shows the final rule provisions marked against those of the 2007 Deficit Reduction Act final rule, and the second shows the final rule provisions marked against those of the 2012 proposed rule.

Background:  The Affordable Care Act (ACA), enacted in 2010, amended the Medicaid drug rebate statute in a number of ways, and this final rule is meant to implement those changes. It goes well beyond the ACA, however, to address a number of other issues that have been percolating in the program over the years. This rule is long-awaited, as its proposed version was issued nearly four years ago in February 2012, and will form the foundation for the program’s operations and manufacturer compliance in the years to come.

  • Effective date: The Final Rule is effective April 1, 2016, except that the provisions relating to the expansion of program to include Puerto Rico and the Territories (discussed further below) are not effective until one year later, April 1, 2017.
  • Prospective only: CMS repeats throughout the final rule that its provisions are prospective only but also references where requirements are based in the ACA itself, and therefore have been in effect already.

Presumed inclusion retained: The final rule retains the presumed inclusion approach to the calculation of AMP. CMS acknowledges stakeholders’ strong support for the presumed inclusion standard and its superiority to the “buildup” approach suggested in the 2012 proposed rule. As a necessary corollary to this decision, CMS repeatedly states that manufacturers may “presume, in the absence of guidance and adequate documentation to the contrary, that prices paid to manufacturers by wholesalers are for drugs distributed to retail community pharmacies.”
 
AMP calculation and RCP issues: The ACA overhauled the definition of Average Manufacturer Price (AMP)

  • What’s in and what’s out? The final rule largely adopts the provisions of the 2012 proposed rule regarding what is and is not eligible for the AMP calculation, with the incorporation of many helpful clarifications suggested by commenters. AMP remains limited to sales to retail community pharmacies (RCPs) and to wholesalers that resell product to RCPs. The final rule adopts CMS’ proposed definition of RCPs, which tracks the statutory definition.
  • Specialty pharmacies sometimes may be RCPs: CMS does not adopt its proposal to treat specialty pharmacies (SPs), home infusion pharmacies, and home health care providers as entities that “conduct business as” RCPs and that therefore would be eligible for AMP. CMS concludes the statutory RCP definition does not exclude these entities categorically, and that therefore these entities (and any others not excluded by the terms of the statutory RCP definition) may qualify as RCPs on a case-by-case basis. The primary concern with qualifying such entities as RCPs has been that entities that dispense product “primarily through the mail” are excluded from the statutory RCP definition, and SPs, for example, do in fact dispense through the mail. CMS seems to be open to a close parsing of that statutory language, however, with a statement on page 186 indicating that “other forms of home delivery that [SPs] may use, such as . . . delivery by a courier service, which may be an additional service offered by any type of pharmacy when specialized packaging and handling of the drug is required, would not necessarily qualify the [SP] as a pharmacy that primarily dispenses prescription medications through the mail.”
  • What about orals not sold through RCPs? Stakeholders have been concerned regarding how to calculate AMP for drugs that don’t have sales to wholesalers and RCPs and that don’t otherwise qualify for the 5i AMP definition (discussed below). These drugs include oral medications dispensed primarily through SPs. CMS seems to think this won’t be that much of an issue, indicating that the retention of the presumed inclusion standard, with its assumption that all sales to wholesalers are eligible for AMP, and manufacturer reasonable assumptions regarding which entities qualify as RCPs (see above) together should generate sufficient sales to support an AMP calculation for these products. CMS also makes clear that manufacturers may not apply the 5i AMP definition to such products because that definition is limited by statute to drugs that qualify as 5i and not generally dispensed through RCPs.
  • Smoothing: CMS finalizes its adoption of the Average Sales Price (ASP) methodology for “smoothing” lagged price concessions, and includes in the final rule itself (as the ASP regulation already does) a detailed example of how the smoothing calculation works. CMS also agrees it is reasonable for manufacturers to use a 12-month rolling average to estimate lagged/indirect ineligible sales. CMS does not mandate use of or define a methodology for doing so, but as with ASP, CMS makes clear it is reasonable for manufacturers to adapt the lagged price concession ratio for use in quantifying lagged ineligible sales.
  • Tricare treatment clarified: The final rule clarifies past guidance regarding the treatment of TRICARE utilization in AMP, making clear that such utilization should remain in AMP (and not be removed like a Federal Supply Schedule sale, for example) with any associated rebates ignored. This will simplify the AMP calculation for manufacturers in a number of respects and aligns the treatment of TRICARE utilization with other government program utilization that flows through the retail channel.
  • Bona fide service fees: The final rule retains the proposed qualitative standard for determining when a fee qualifies as “bona fide” but CMS refuses to provide any specific guidance regarding the determination of fair market value. CMS does make clear that, as with the ASP calculation, manufacturers may presume that no “passing on” of fees occurs absent any evidence of or notice to the contrary.
  • Returns: CMS finalizes its proposed treatment of returns, continuing to emphasize that such transactions do not impact AMP in the normal course, but that returns “disguise[d]” as price concessions would need to be included in the calculation. The 2012 proposed rule had asked for comments regarding what products qualify as “unsalable” and therefore returnable, but the final rule does not define that term, instead deferring to “standard industry practices and manufacturer policies.” 
  • Customary prompt pay: CMS rejects requests to exclude from AMP customary prompt pay discounts provided to AMP-eligible customers other than wholesalers. CMS explains that the statutory exclusion is limited to wholesalers and therefore that the regulatory exclusion must be so limited as well.
  • Patient programs: The final rule adopts CMS’ proposal to exclude patient programs of various types and adds clarifying language to the regulation that specifies the parameters for those exclusions, which largely track the parameters previously included in CMS guidance. 
  • Baseline AMP revisions: The final rule adopts CMS’ proposal to give manufacturers the option of recalculating the baseline AMP for a drug in accordance with the final rule, but manufacturers must do so within four questers of the final rule’s effective date (i.e., by April 1, 2017), and any revised baseline AMPs will apply only as of the effective date of the final rule.

The 5i AMP calculation and applicability: Legislation following the ACA created an alternative AMP definition for products that are inhaled, infused, instilled, implanted, or injected (5i) and not generally dispensed (NGD) through RCPs. The implementation of this alternative AMP formula creates a number of definitional and operational concerns.

  • 5i doesn’t need a definition: CMS does not finalize its proposed regulatory definition of a 5i drug, which had relied on FDA’s Routes of Administration, finding that manufacturers are knowledgeable about their products and that adopting a regulatory definition would just add complexity to what otherwise should be a relatively simple and straightforward determination.
  • NGD = 70/30 not 90/10: A 5i drug only qualifies for the alternative AMP formula if it also is “not generally dispensed through” RCPs. The proposed rule had included a “90/10” standard:  90% or more of a product’s sales had to go through non-RCPs to qualify for the alternative AMP definition. The final rule adopts a 70/30 standard instead, recognizing the breadth of the “not generally dispensed” language and seeking to reduce the likelihood that a drug alternates between the two AMP formulas, thereby providing more stability over time for rebate and, for multiple source drugs, federal upper limit amounts. In adopting the 70/30 standard, CMS rejects stakeholder requests for qualitative or other alternatives quantitative standards (such as 50/50).
  • NGD methodology: CMS clarifies that manufacturers should apply the 70/30 standard using a drug’s unit volume rather than sales dollars, as changes in a drug’s price over time could cause the latter approach to be skewed. CMS also permits but does not require manufacturers to use 12-months of historical data in the 70/30 calculation, recognizing that sales channel fluctuations in the short term otherwise could cause a drug to alternate between AMP formulas. 
  • NGD = Monthly: CMS adopts its proposal requiring manufacturers to perform the NGD determination for each 5i drug on a monthly basis, dismissing manufacturer concerns regarding the burden that such a process imposes. CMS is unconcerned regarding the accuracy of a quarterly AMP figure derived from monthly AMPs that are based on different AMP formulas. 
  • Single baseline AMP: CMS is not permitting manufacturers to calculate two distinct baseline AMPs for a 5i product to reflect the two distinct AMP definitions and the possibility that the drug may be subject to the different AMP formulas over time. CMS states that the statute contemplates and permits only a single baseline AMP for a product and seems unconcerned with the apples-to-oranges comparison that may result when calculating the additional rebate using a current quarter AMP figure that is based on a different AMP formula than that used to calculate the baseline AMP. The monthly NGD determination (discussed above) also means that the baseline AMP for a drug could be based on monthly AMP figures calculated using different AMP formulas.
  • Drug Data Reporting flag: CMS welcomed stakeholder suggestions that it add a “flag” to Drug Data Reporting (DDR) so that a manufacturer can designate the AMP formula used for a drug for a given month, and states that it already has added such an indicator to DDR (i.e., the “5i Threshold” field).
  • What’s in and what’s out? The final rule clarifies the customer and transactions types eligible and ineligible for the 5i AMP calculation, largely tracking the proposed rule, but with some clean-up and clarification. CMS also makes clear that while the 5i AMP statutory definition and final rule regulatory definition do not specifically exclude bona fide service fees for entities other than wholesalers and RCPs, CMS interprets the 5i AMP definition to not include such fees as they “do not represent a type of payment from, or discounts or rebates provided to” customers eligible for the 5i AMP calculation.

Line extension rebate: The ACA created an alternative rebate formula for so-called “line extension” drugs, and that alternative rebate formula has the very real potential to increase the Medicaid rebate for a drugs falling into that category.  

  • Broad definition of “line extension” not finalized: The final rule does not adopt CMS’ proposed definition of “line extension,” which broadly interpreted the term and relied on FDA’s chemical type codes for purposes of identifying line extension products. CMS’ proposal was subject to much commentary given its breadth, which arguably extended beyond the four corners of the statutory language, and also because of public policy concerns. The proposed definition would have imposed the alternative rebate formula on combination products and new formulations that incorporate abuse-deterrent technologies, both of which are promoted by public health officials. CMS also had proposed to rely on the FDA’s chemical type categories for identifying line extensions, which became problematic when the FDA revised its chemical type framework just months before the final rule was issued. For the time being, therefore, the statutory definition of line extension remains the standard for determining whether the alternative rebate applies.
  • More comments wanted: The Final Rule is styled as a “Final Rule With Comment Period,” with CMS seeking comments only on the topic of “the definition and identification of line extension drugs.”  Comments on this topic are due 60 days after the date the final rule is published in the Federal Register. If the final rule is published as scheduled on February 1, 2016, comments will be due by Friday April 1, 2016.
  • Both drugs = SODs: The statutory language indicates that the alternative rebate formula applies only to drugs that are solid oral dosage forms (SODs). CMS finalizes its proposed definition of that term.  The proposed rule preamble had made very clear that both the original drug and its line extension had to be SODs, which was important because the language of the proposed rule itself was cumbersome and not particularly clear on this point. CMS does not address this issue specifically, other than to recount that this was the proposal, but the final rule’s language defining the rebate formula is the same as that which was proposed, implying that the final rule retains this position.
  • Applies only if corporate relationship between manufacturers of both drugs: The alternative rebate formula relies on rebate data relating to the original version of the drug. Many commenters expressed concern regarding the ability of the line extension manufacturer to obtain such data from the original drug manufacturer where the two companies are unrelated, as well as regarding confidentiality and competition concerns regarding such data sharing. The final rule addresses these concerns by applying the alternative rebate formula to a line extension only when the same manufacturer makes both drugs or the manufacturers of the line extension and the original drug have a “corporate relationship.”
  • Original drug must be in MDRP: The final rule recognizes the practical reality that the alternative rebate formula can only work when the original drug is active in the Medicaid drug rebate program, as Medicaid rebate data for the original drug are needed to calculate the alternative rebate amount.  Therefore, where the original drug is terminated or not otherwise active in the MDRP, the alternative rebate formula does not apply.

Other rebate issues

  • Capped at 100% of AMP for innovators: The final rule includes the statutory cap on the rebate for single source and innovator multiple source drugs of 100% of AMP.
  • Exclusively pediatric indications: The ACA increased the minimum Medicaid rebate for single source and innovator multiple source drugs from15.1% to 23.1% but created an alternative minimum rebate of 17.1% for drugs approved exclusively for pediatric indications. The proposed rule would have applied this lower rebate rate only where the product’s labeling specified that the patient population was age 16 or younger. In response to comments indicating that the FDA standards for defining “pediatric” were more flexible than such a date range, the final rule adds that a drug also could qualify if there is “an explanation elsewhere in the labeling that makes it clear that the drug is for use only in a pediatric age group, or a subset of this group.”
  • Clotting factors: The ACA also applies the lower 17.1% minimum rebate to certain clotting factor products. Recognizing that the process for identifying such products as eligible for the lower minimum rebate can take some time, the final rule makes clear that the lower rebate rate applies back to the product’s market date. 
  • Additional rebate for N drugs: The Bipartisan Budget Act of 2015, enacted in November 2015, amended the Medicaid statute to extend the additional rebate to non-innovator multiple source drugs.  Neither the preamble nor the final rule itself makes reference to this revised rebate formula for N drugs, possibly because the statutory changes under the Budget Act only apply beginning with the first quarter 2017 and CMS has not yet had the opportunity to publish or solicit comments regarding how it intends to implement the new additional rebate through regulation.

Welcome territories! The final rule adopts CMS’ proposal to define “states” and “United States” to include Puerto Rico and the Territories, thereby expanding the Medicaid drug rebate program to include those locations both in terms of identifying customers that are eligible for AMP/BP, as well as the utilization subject to a Medicaid rebate. The final rule gives all parties (manufacturers, Puerto Rico, and the Territories) an additional year to prepare for this change by delaying the effective date for this aspect of the final rule until April 1, 2017.

Original New Drug Application (NDA) = Any NDA, except for “narrow” exceptions: The Medicaid statute applies the higher single source (S) and innovator multiple source (I) rebate formula only to those drugs marketed under an “original” NDA. CMS previously had not defined that term, which created ambiguity for products that, through the peculiarities of the FDA’s regulatory system over time, were in fact approved under NDAs but that otherwise never received any of the market benefits typically derived from an NDA, such as market exclusivity and patent protection. CMS had proposed to treat all NDAs as original NDAs, which would have had the effect of imposing the higher rebate formula on drugs that were generics for all intents and purposes. Stakeholders strongly resisted this proposal, arguing that such an interpretation was impermissible from a statutory point of view — it would ignore the word “original” in the statute — and from a policy point of view, because products that never received any market exclusivity or patent protection should not be subject to the higher rebate.  In response, the final rule adopts CMS’ proposal but also creates an “exception process” whereby a manufacturer can request that a product with an NDA be treated as a non-innovator. The final rule refers to a “narrow exception” that applies in “limited circumstances.” For existing products, manufacturers will have up to four quarters after the final rule’s effective date to apply for an exception. 

Best price

  • What’s in and what’s out? The final rule adopts CMS’ proposal to delete the existing regulation’s laundry list of BP-eligible customer types and replace it with the more concise language of the statutory definition. The final rule also makes clear that price concessions eligible for BP consideration (such as rebates and chargebacks) are only relevant if they involve one of the customer types included in the revised regulatory definition. The final rule also largely conforms the BP inclusions/exclusions to the final rule’s AMP definition, such as in the case of patient programs for example.
  • Follow-the-pill? CMS includes some troubling language in the preamble (see pages 290-1) thatcould be read to suggest that CMS now believes manufacturers must aggregate discounts across customers when determining BP, suggesting that BP is measured as the manufacturer’s price per unit net of all discounts provided on that unit across all customers (hence the “follow-the-pill” shorthand for this approach), rather than the price realized by an individual customer and determined on a customer-by-customer basis. This would be an unanticipated and marked departure from CMS’ guidance and language in the 2007 final rule, which defined only AMP as being measured from the manufacturer’s point of view (Average Manufacturer Price) and BP as being measured from the customer’s point of view. The final rule, as with the 2007 final rule, continues to define BP as the price available to a given customer, which indicates that BP should be measured on a customer-by-customer basis, but the commentary in the final rule preamble should be reviewed carefully.
  • Clinical trial product: CMS includes helpful guidance indicating that sales of clinical trial product to another manufacturer likely can be excluded from BP under the revised BP definition. CMS notes that the revised regulatory definition, which conforms to the statutory language, does not include manufacturers as a customer type in BP. CMS points out that the revised BP definition does include wholesalers, consistent with the statute, such that a manufacturer may qualify for BP as a wholesaler if it distributes product to RCPs, but that it is unlikely a manufacturer is functioning in that capacity when purchasing clinical trial product.  
  • 340B any price exception retained: CMS retreats from its proposal to limit the BP exception for 340B covered entities to only those sales “under the 340B Drug Pricing program.” This proposal was problematic given the broad language of the statute, which exempts “any price” to covered entities.  The final rule includes the “any price” exception and makes clear that “any price” means just that, and applies to sub-ceiling prices, prices above the ceiling price (for Medicaid carve-out purchases for example), as well as voluntary discounts on orphan drugs to those covered entities subject to the orphan drug exclusion.
  • Bundle muddle: While applying to both AMP and BP, bundled sales tend to have a more significant impact on BP and so we discuss this issue here. CMS had proposed language intended to clarify the scope of the bundled sale definition, particularly in relation to contingent and non-contingent discounts. The final rule adopts some but not all of the revised language, and in the preamble discussion of the revision seems to focus on multi-product bundles and when a product is or is not part of a bundle. CMS does not clearly address the more nuanced issue of where a product in a bundle is subject to both contingent and non-contingent discounts and whether the non-contingent discount must be reallocated along with the contingent discounts. CMS reiterates that it does not intend to revise the policy in its 2007 final rule and that discount reallocation must include all discounts on all products in the bundle.

Authorized generics harder to include in AMP? The CMS press release states that the final rule closes “loopholes,” and that may be what CMS is attempting to do here. The statutory definition of wholesaler introduced by the ACA in 2010 includes manufacturers that act as wholesalers, and on that basis, manufacturers have been able to include in a branded product’s AMP calculation sales of an authorized generic to a secondary manufacturer where that secondary manufacturer acts as a wholesaler, i.e., distributes product to RCPs. The final rule itself appears not to disturb that interpretation, but the preamble discussion states that if the secondary manufacturer relabels the authorized generic product with its own NDC it is a manufacturer rather than a wholesaler and not eligible for AMP. The challenge with this interpretation is twofold: (1) the statutory wholesaler definition itself (which CMS mirrors in the final rule) specifically includes manufacturers, own-label distributors, and private-label distributors, and (2) thestatutory definition of manufacturer specifically excludes  manufacturers acting as wholesalers. As to this second point, it is important to note that final rule definition of manufacturer has not been updated to include this component of the statutory definition, and the final rule does not otherwise address these considerations. 

Covered outpatient drugs: This issue gives the final rule its name. Covered Outpatient Drugs (CODs) are those products regulated by FDA as drugs and are the products for which participating manufacturers must report pricing data and for which state Medicaid programs must provide coverage. CMS finalizes its proposed definition of the term, which largely tracks the statute, but without the requirement that manufacturers list their products with the FDA. Where a drug product does not have a formal FDA approval but the manufacturer otherwise believes the product qualifies as a COD, the manufacturer must provide evidence to CMS demonstrating that the product meets the definition. CMS also clarifies that CODs paid for under bundled payments, such as End Stage Renal Disease (ESRD) drugs, are not subject to rebates.

Medicaid MCO utilization: The ACA expanded Medicaid rebate liability from fee-for-service (FFS) utilization to include Medicaid managed care organization (MCO) utilization as well. 

  • Attribution date for MCO utilization: The final rule clarifies that MCO utilization is attributed to a quarter for rebate purposes based on dispense date, in contrast to FFS utilization, which is attributed based on the date the state pays the pharmacy claim. This clarification is important given anecdotal reports that states that were delayed in accumulating MCO utilization were attributing such utilization to later quarters and obtaining higher rebates as a result.
  • Coverage mandate: CMS continues with its position that MCOs “may continue to have some flexibility in maintaining formularies of drugs regardless of whether the manufacturers of those drugs participate in the drug rebate program,” but then emphasizes that beneficiaries still must have access to CODs. Where a COD is not on an MCO formulary, the drug must be available either through a prior authorization program or through a state carve-out.
  • MCO data: CMS does not finalize its proposal regarding the specific data that MCOs must provide to states to support rebate invoices, and instead finalizes only the state reporting requirements.
  • 340B double dipping: The final rule recognizes the statute’s prohibition on Medicaid rebates for drugs sold at the 340B price but does not impose any specific mechanism for implementing this prohibition, relying instead on a broader instruction to states to ensure compliance with this prohibition.

CMPs and pricing data restatements: CMS does not finalize its proposal to add provisions regarding civil monetary provisions (CMPs) for late and inaccurate data to the regulation on the theory that it is the Office of Inspector General (OIG) of the U.S. Department of Health & Human Services that has the CMP authority rather than CMS, and also in response to concerns that the proposed language implied that CMPs could be applied automatically and with no predicate fact-finding or review process. CMS does finalize all but one of its proposed exceptions to the 12-quarter limit for the restatement of pricing data. CMS does not finalize the broad exception to the 12-quarter limit for “good cause“ because it remained unclear what scenarios that exception might address that were not covered by the other exceptions. CMS also revises the exception for restatements resulting from a manufacturer’s internal investigation, a CMS or court order, or an OIG or Department of Justice investigation to make clear that such an exception could apply in the case of rebate overpayments as well as underpayments.

Pharmacy reimbursement and Federal Upper Limits (FULs): In addition to the Medicaid rebate-related implications of the final rule, the final rule also is significant in relation to how it will impact Medicaid reimbursement, particularly in relation to multiple source drugs. Multiple source drugs are subject to what amounts to a federal cap on a state’s reimbursement rate, known as a FUL. The ACA revised how FULs are calculated and required FULs to be based on AMP data, as calculated in accordance with the new statutory (and now regulatory) definitions. 

  • Actual Acquisition Cost (AAC) and reimbursement: CMS finalizes its replacement of Estimated Acquisition Cost (EAC) with AAC as the basis for drug reimbursement rates and focuses on the importance of basing reimbursement rates on actual cost data. CMS does not specify how AAC must be calculated, although it suggests as possible sources AMP data (to which states have access), retail pharmacy survey data — either as determined by the state or published by CMS in its National Average Drug Acquisition Cost (NADAC) files, and CMS’ own FUL data. Given the pharmacy community’s concerns regarding the adequacy of AAC-based payment rates, the final rule does require that where a state proposes to change either the ingredient cost or the professional dispensing fee reimbursement, it must evaluate the proposed changes in accordance with the final rule to ensure that total reimbursement complies with section 1902(a)(30)(A) of the Social Security Act. States must submit State Plan Amendments on this issue (and certain others) no later than June 30, 2016 with an effective date no later than April 1, 2017. While much of the reimbursement focus has been on multiple source drugs and the FULs applicable to them, the final rule makes clear that AAC-based reimbursement applies to single source drugs as well.
  • FUL applicability: CMS finalizes its proposal to calculate and impose a FUL only when the U.S. Food and Drug Administration has rated three drugs as therapeutically and pharmaceutically equivalent, or A-Rated, and CMS has received a calculated AMP and AMP units for those drugs. CMS relies this latter requirement to confirm that each of the drugs is available to RCPs on a nationwide basis, which is a statutory requirement for a FUL to apply. Drugs terminated from the program will not be included in the FUL calculation.  Drugs subject to the 5i AMP formula will neither be included in the FUL calculation nor subject to a FUL, based on the assumption that such drugs by definition have limited distribution through RCPs. 
  • Multiplier = Greater of 175% of weighted average AMPs or NADAC: The statute provides that a FUL shall be calculated as no less than 175% of the weighted average AMP of the drugs in the multiple source group. CMS had proposed using the 175% multiplier but pharmacies were concerned the resulting FULs would be inadequate to cover acquisition costs in all instances. CMS’ own NADAC data supported that concern, and so the final rule sets the AMP multiplier at 175%, except where the resulting figure is less than the latest NADAC, in which case the multiplier will be increased to result in a FUL that matches the NADAC.
  • Implementation: CMS updated the FUL page of its website and, as noted above, provided a bulletin on January 22, 2016 detailing the timeline for implementing AMP-based FULs.

Reasonable assumptions remain key: The final rule is replete with references to manufacturer use of reasonable assumptions in implementing the ACA statutory changes and the provisions of the final rule, and in all cases CMS makes clear that such assumptions must be documented.  
 
We have attempted to summarize key aspects of the final rule, but as is readily apparent based on its sheer length, the final rule addresses many topics, sometimes in passing. For example, CMS addresses value-based arrangements in a single paragraph and acknowledges that more guidance is needed regarding how value-based arrangements affect a manufacturer’s BP. It therefore is incredibly important for you to review the final rule closely and in its entirety to ensure you identify all issues relevant to your organization.