43618 Federal Register / Vol. 86, No. 151 / Tuesday, August 10, 2021 / Proposed Rules 

that complies with the provisions of the 

Act and applicable Federal regulations. 

42 U.S.C. 7410(k); 40 CFR 52.02(a). 

Thus, in reviewing SIP submissions, the 

EPA’s role is to approve state choices, 

provided that they meet the criteria of 

the CAA. Accordingly, this action 

merely approves state law as meeting 

Federal requirements and does not 

impose additional requirements beyond 

those imposed by state law. For that 

reason, this action: • Is not a significant regulatory action 

subject to review by the Office of 

Management and Budget under 

Executive Orders 12866 (58 FR 51735, 

October 4, 1993) and 13563 (76 FR 3821, 

January 21, 2011); 

• Does not impose an information 

collection burden under the provisions 

of the Paperwork Reduction Act (44 

U.S.C. 3501 et seq.); 

• Is certified as not having a 

significant economic impact on a 

substantial number of small entities 

under the Regulatory Flexibility Act (5 

U.S.C. 601 et seq.); 

• Does not contain any unfunded 

mandate or significantly or uniquely 

affect small governments, as described 

in the Unfunded Mandates Reform Act 

of 1995 (Pub. L. 104–4); 

• Does not have Federalism 

implications as specified in Executive 

Order 13132 (64 FR 43255, August 10, 

1999); 

• Is not an economically significant 

regulatory action based on health or 

safety risks subject to Executive Order 

13045 (62 FR 19885, April 23, 1997); 

• Is not a significant regulatory action 

subject to Executive Order 13211 (66 FR 

28355, May 22, 2001); 

• Is not subject to requirements of the 

National Technology Transfer and 

Advancement Act (NTTA) because this 

rulemaking does not involve technical 

standards; and 

• Does not provide EPA with the 

discretionary authority to address, as 

appropriate, disproportionate human 

health or environmental effects, using 

practicable and legally permissible 

methods, under Executive Order 12898 

(59 FR 7629, February 16, 1994). 

The SIP is not approved to apply on 

any Indian reservation land or in any 

other area where EPA or an Indian tribe 

has demonstrated that a tribe has 

jurisdiction. In those areas of Indian 

country, the rule does not have tribal 

implications and will not impose 

substantial direct costs on tribal 

governments or preempt tribal law as 

specified by Executive Order 13175 (65 

FR 67249, November 9, 2000). 

List of Subjects in 40 CFR Part 52 

Environmental protection, Air 

pollution control, Carbon monoxide, 

Incorporation by reference, Particulate 

matter, Volatile organic compounds. 

Dated: July 30, 2021. 

Edward H. Chu, 

Acting Regional Administrator, Region 7. 

For the reasons stated in the 

preamble, EPA proposes to amend 40 

CFR part 52 as set forth below: 

PART 52—APPROVAL AND 

PROMULGATION OF 

IMPLEMENTATION PLANS 

■ 1. The authority citation for part 52 

continues to read as follows: 

Authority: 42 U.S.C. 7401 et seq. 

Subpart AA—Missouri 

■ 2. In § 52.1320, the table in paragraph 

(c) is amended by revising the entry 

‘‘10–6.330’’ to read as follows: 

§ 52.1320 Identification of plan. 

* * * * * 

(c) * * * 

EPA-APPROVED MISSOURI REGULATIONS

Missouri citation Title 

State 

effective 

date 

EPA approval date Explanation 

Missouri Department of Natural Resources 

*******

Chapter 6—Air Quality Standards, Definitions, Sampling and Reference Methods, and Air Pollution Control Regulations for the State of 

Missouri 

*******

10–6.330 ........... Restriction of Emissions From 

Batch-Type Charcoal Kilns.

7/30/2020 [Date of publication of the final rule in the 

Federal Register], [Federal Register citation of the final rule].

*******

* * * * * 

[FR Doc. 2021–16846 Filed 8–9–21; 8:45 am] 

BILLING CODE 6560–50–P 

DEPARTMENT OF HEALTH AND 

HUMAN SERVICES 

Centers for Medicare & Medicaid 

Services 

42 CFR Part 513 

[CMS–5528–P] 

RIN 0938–AT91 

Most Favored Nation (MFN) Model 

AGENCY: Centers for Medicare & 

Medicaid Services (CMS), HHS. 

ACTION: Proposed rule. 

SUMMARY: This proposed rule proposes 

to rescind the Most Favored Nation 

Model interim final rule with comment 

period that appeared in the November 

27, 2020, Federal Register. 

DATES: To be assured consideration, 

comments must be received at one of 

the addresses provided below, by 

October 12, 2021. 

ADDRESSES: In commenting, please refer 

to file code CMS–5528–P. 

Comments, including mass comment 

submissions, must be submitted in one 


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1Nguyen X. Nguyen and Steve Sheingold. 

Medicare Part B Drugs: Trends in Spending and 

Utilization, 2006–2017. Washington, DC: Office of 

the Assistant Secretary for Planning and Evaluation, 

U.S. Department of Health and Human Services. 

November 20, 2020 (https://aspe.hhs.gov/pdfreport/medicare-part-b-drugs-spending-andutilization). 2 ‘‘Comparison of U.S. and International Prices 

for Top Medicare Part B Drugs by Total 

Expenditures’’ accessed via https://aspe.hhs.gov/ 

pdf-report/comparison-us-and-international-pricestop-medicare-part-b-drugs-total-expenditures; ElKilani Z, Finegold K, Mulcahy A, and Bosworth A. 

Medicare FFS Part B and International Drug Prices: 

A Comparison of the Top 50 Drugs. Washington, 

DC: Office of the Assistant Secretary for Planning 

and Evaluation, U.S. Department of Health and 

Human Services. November 20, 2020 (https://

aspe.hhs.gov/pdf-report/medicare-ffs-part-b-andinternational-drug-prices). 

3 Individual countries differ in the regulatory 

processes and standards governing approval of 

drugs and biologicals. Use of international drug 

prices in the MFN Model should not be interpreted 

to connote FDA approval or to otherwise describe 

any scientific or regulatory relationship between 

U.S.-approved and non-U.S.-approved products. 

4 2020 Annual Report of the Boards of Trustees 

of the Federal Hospital Insurance and Federal 

Supplementary Medical Insurance Trust Funds. 

Accessed via: https://www.cms.gov/files/document/ 

2020-medicare-trustees-report.pdf. 

5 ‘‘Comparison of U.S. and International Prices 

for Top Medicare Part B Drugs by Total 

Expenditures’’ accessed via https://aspe.hhs.gov/ 

pdf-report/comparison-us-and-international-pricestop-medicare-part-b-drugs-total-expenditures; ElKilani Z, Finegold K, Mulcahy A, and Bosworth A. 

Medicare FFS Part B and International Drug Prices: 

A Comparison of the Top 50 Drugs. Washington, 

DC: Office of the Assistant Secretary for Planning 

and Evaluation, U.S. Department of Health and 

Human Services. November 20, 2020 (https://

aspe.hhs.gov/pdf-report/medicare-ffs-part-b-andinternational-drug-prices). 

6 ‘‘Comparison of U.S. and International Prices for 

Top Medicare Part B Drugs by Total Expenditures’’ 

accessed via https://aspe.hhs.gov/pdf-report/ 

comparison-us-and-international-prices-topmedicare-part-b-drugs-total-expenditures; El-Kilani 

Z, Finegold K, Mulcahy A, Bosworth A. Medicare 

FFS Part B and International Drug Prices: A 

Comparison of the Top 50 Drugs. Washington, DC: 

Office of the Assistant Secretary for Planning and 

Evaluation, U.S. Department of Health and Human 

Services. November 20, 2020 (https://aspe.hhs.gov/ 

pdf-report/medicare-ffs-part-b-and-internationaldrug-prices). 

7MedPAC, June 2017, ‘‘Medicare Part B Drug 

Payment Policy Issues,’’ accessed via http://

medpac.gov/docs/default-source/reports/jun17_

ch2.pdf 

8Available at https://www.govinfo.gov/content/ 

pkg/FR-2020-11-27/pdf/2020-26037.pdf. 

9Available at https://innovation.cms.gov/ 

innovation-models/most-favored-nation-model. 

of the following three ways (please 

choose only one of the ways listed): 

1. Electronically. You may submit 

electronic comments on this regulation 

to http://www.regulations.gov. Follow 

the ‘‘Submit a comment’’ instructions. 

2. By regular mail. You may mail 

written comments to the following 

address ONLY: Centers for Medicare & 

Medicaid Services, Department of 

Health and Human Services, Attention: 

CMS–5528–P, P.O. Box 8013, Baltimore, 

MD 21244–8013. 

Please allow sufficient time for mailed 

comments to be received before the 

close of the comment period. 

3. By express or overnight mail. You 

may send written comments to the 

following address ONLY: Centers for 

Medicare & Medicaid Services, 

Department of Health and Human 

Services, Attention: CMS–5528–P, Mail 

Stop C4–26–05, 7500 Security 

Boulevard, Baltimore, MD 21244–1850. 

For information on viewing public 

comments, see the beginning of the 

SUPPLEMENTARY INFORMATION section. 

FOR FURTHER INFORMATION CONTACT: Lara 

Strawbridge, (410) 786–7400 or MFN@

cms.hhs.gov. 

SUPPLEMENTARY INFORMATION: Inspection 

of Public Comments: All comments 

received before the close of the 

comment period are available for 

viewing by the public, including any 

personally identifiable or confidential 

business information that is included in 

a comment. We post all comments 

received before the close of the 

comment period on the following 

website as soon as possible after they 

have been received: http://

www.regulations.gov. Follow the search 

instructions on that website to view 

public comments. CMS will not post on 

Regulations.gov public comments that 

make threats to individuals or 

institutions or suggest that the 

individual will take actions to harm any 

individual. CMS continues to encourage 

individuals not to submit duplicative 

comments. We will post acceptable 

comments from multiple unique 

commenters even if the content is 

identical or nearly identical to other 

comments. 

I. Background 

Increases in Part B prescription drug 

spending significantly outpace the 

growth in spending on other Medicare 

Part B services,1 and prices in the 

United States (U.S.) for most Medicare 

Part B drugs with the highest Medicare 

spending far exceed prices in other 

countries.2 3 Specifically, drugs have 

consistently been a major contributor to 

the overall Medicare Part B spending 

trend. Medicare Part B fee-for-service 

(FFS) spending for separately payable 

physician-administered drugs and drugs 

furnished in a hospital outpatient 

department represented about 11 

percent of Medicare Part B FFS benefit 

spending in 2015, but accounted for 

about 37 percent of the change in 

Medicare Part B FFS benefit spending 

from 2015 to 2020.4 In addition to the 

continued growth in spending, 

Medicare pays substantially more than 

other countries for many of the highestcost Medicare Part B drugs that 

beneficiaries receive in an outpatient 

setting for which Medicare Part B allows 

separate payment.5 In many instances, 

Medicare pays more than twice as much 

for certain drugs as other countries do.6

This imbalance in payment arises 

because Medicare generally establishes 

the payment for separately payable 

Medicare Part B drugs using the 

methodology in section 1847A of the 

Social Security Act (the Act). In most 

cases, this means payment is based on 

the average sales price (ASP) plus a 

statutorily mandated 6 percent add-on. 

Under this methodology, the Medicare 

program does not get the benefit of the 

substantial discounts provided in other 

countries, because ASP is calculated 

using only the prices that manufacturers 

charge to certain U.S.-based purchasers. 

ASP-based payments may also 

encourage the use of more expensive 

drugs because the dollar amount of the 

6 percent add-on portion is larger for 

drugs with higher ASPs.7

The Most Favored Nation (MFN) 

Model interim final rule with comment 

period (85 FR 76180) 8 (hereafter, 

referred to as ‘‘the November 2020 

interim final rule’’) was published in the 

Federal Register on November 27, 2020, 

and was effective the same day, with a 

60-day comment period. The 60-day 

comment period on the November 2020 

interim final rule closed on January 26, 

2021. The November 2020 interim final 

rule established a 7-year nationwide, 

mandatory MFN Model, under section 

1115A of the 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 (including 

biosimilar biologicals). For additional 

information on the MFN Model, see the 

November 2020 interim final rule and 

the MFN Model website.9

In the November 2020 interim final 

rule, Waiver of Proposed Rulemaking 

and Delay in Effective Date, we stated 

that we found that there was good cause 

to waive the notice and comment 

requirements under sections 553(b)(B) 

of the Administrative Procedure Act and 

section 1871(b)(2)(C) of the Act because 

of the particularly acute need for 

affordable Medicare Part B drugs in the 

midst of the COVID–19 pandemic (85 

FR 76249). 

In December 2020, while the 

comment period was open, four 

lawsuits were filed related to CMS’s 

waivers of proposed rulemaking and 

delay in effective date as well as other 

aspects of the MFN Model and the 


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10For example, commenters stated that the MFN 

Model should not start during the COVID–19 

pandemic, and in addition that the model should 

not begin on January 1, 2021, while the public 

comment period for the November 2020 interim 

final rule was ongoing (until January 26, 2021). 

Further, commenters stated that CMS failed to 

allow MFN participants sufficient time to prepare 

for model start and to develop and deploy new 

systems with distributors and customers to exclude 

model sales from ASP reporting. 

November 2020 interim final rule: 

Association of Community Cancer 

Centers v. Azar, No. 8:20–cv–03531 (D. 

Md.); California Life Sciences Ass’n v. 

CMS, No. 3:20–cv–08603 (N.D. Ca); 

Regeneron Pharmaceuticals v. HHS, No. 

7:20–cv–10488 (S.D.N.Y.); and 

Community Oncology Alliance, Inc. v. 

HHS, No.1:20–cv–03604 (D.D.C.). On 

December 28, 2020, the U.S. District 

Court for the Northern District of 

California issued a nationwide 

preliminary injunction in California Life 

Sciences, which preliminarily enjoined 

HHS from implementing the MFN 

Model and the November 2020 interim 

final rule. The lawsuits in the U.S. 

District Court for the District of 

Maryland and the U.S. District Court for 

the District of Columbia were stayed 

based on the nationwide preliminary 

injunction. On December 30, 2020, the 

U.S. District Court for the Southern 

District of New York issued a 

preliminary injunction in Regeneron 

Pharmaceuticals v. HHS, which 

preliminarily enjoined HHS from 

applying the November 2020 interim 

final rule to Regeneron’s drug EYLEA®

(aflibercept). 

On January 8, 2021, the Solicitor 

General determined not to appeal the 

preliminary injunction issued in 

California Life Sciences. On January 19, 

2021, at the parties’ request, the U.S. 

Northern District of California stayed 

the case until at least April 23, 2021. 

Subsequently, on April 26, 2021, 

another stay was granted until July 26, 

2021. On July 29, 2021, another stay was 

granted until September 27, 2021. 

In Regeneron Pharmaceuticals, on 

February 2, 2021, the plaintiff filed a 

letter seeking leave to file a motion for 

summary judgment, and HHS filed a 

letter seeking leave to file a motion for 

a stay. On February 10, 2021, the U.S. 

District Court for the Southern District 

of New York granted HHS’s request and 

stayed the case for 90 days (that is, 

through May 11, 2021). On May 10, 

2021, the stay in this case was extended 

for an additional 90 days, until August 

9, 2021, to give HHS time to consider 

how to proceed with the rule in light of 

the ‘‘unanimous’’ court decisions to 

date. In its order, the court noted that 

HHS should ‘‘not assume that another 

stay will be granted,’’ as the stays gave 

HHS ‘‘a half-year to reach a conclusion 

regarding how to proceed[.]’’ 

As a result of the nationwide 

preliminary injunction, the MFN Model 

was not implemented on January 1, 

2021, as contemplated in the November 

2020 interim final rule. While the 

nationwide preliminary injunction has 

been in place, CMS considered how to 

proceed given stakeholders’ concerns 

about potential impacts of the MFN 

Model. 

II. Provisions of the Proposed 

Regulations 

We received approximately 1,166 

timely pieces of correspondence in 

response to the November 2020 interim 

final rule. We appreciate the comments 

that we received. We note that many 

commenters agreed with HHS about the 

urgency of addressing high prescription 

drug prices, but nearly all of the 

commenters expressed concern about 

beginning the model on January 1, 2021, 

including starting the model during the 

COVID–19 pandemic. Given that the 

nationwide preliminary injunction 

precluded implementation of the MFN 

Model on January 1, 2021, as 

contemplated, that multiple courts 

found procedural issues with the 

November 2020 interim final rule, and 

that stakeholders expressed concern 

about the model start date,10 we are 

proposing to rescind regulations added 

by the November 2020 interim final rule 

and remove the associated regulatory 

text at 42 CFR part 513. We believe this 

proposed rule communicates how we 

wish to proceed with the November 

2020 interim final rule to the courts and 

the public. Since the preliminary 

injunctions prevented the November 

2020 interim final rule from taking 

effect, we do not believe there would be 

any disruption to reliance interests or 

Medicare program administration if this 

proposed rule were to take effect. If 

finalized, our proposal would allow us 

to take time to further consider the 

issues identified by commenters and 

would address the November 2020 

interim final rule’s procedural 

deficiencies by rescinding it. We note 

that this proposed rule (that is, our 

proposal to effectively withdraw an 

interim final rule with comment period) 

is limited to the codification of the 

November 2020 interim final rule, and 

does not reflect any judgment by HHS 

regarding future policy. 

On July 9, 2021, President Biden 

signed an Executive Order on Promoting 

Competition in the American Economy 

that, in part, directs the Secretary of 

HHS to take steps to lower the prices of 

and improve access to prescription 

drugs and biologicals. HHS is exploring 

opportunities to promote value-based 

care for our beneficiaries; to address the 

high cost of Medicare Part B drugs, 

manufacturers’ pricing, and the 

resulting growth in Medicare Part B 

drug spending; and to modernize the 

Medicare program to improve the 

quality and cost of care for beneficiaries. 

We will continue to carefully consider 

the comments we received on the 

November 2020 interim final rule as we 

explore all options to incorporate value 

into payments for Medicare Part B drugs 

and improve beneficiaries’ access to 

evidence-based care. 

We invite comments on our proposal 

to rescind and remove the regulations at 

42 CFR part 513, which also would 

withdraw the MFN Model. 

III. Collection of Information 

Requirements 

As stated in section 1115A(d)(3) of the 

Act, Chapter 35 of title 44, United States 

Code, shall not apply to the testing and 

evaluation of CMS Innovation Center 

Models. However, costs incurred 

through information collections were 

described in sections III.H., III.I.b., and 

VI.C.5. of the November 2020 interim 

final rule (85 FR 76221, 76222, and 

76244, respectively) . If this proposed 

rule is finalized, requirements related to 

the information collection described in 

the November 2020 interim final rule 

would not continue. As such, resulting 

savings are included in the estimate of 

the impact of our proposal to withdraw 

the MFN Model in section V.C. of this 

proposed rule. Further, this proposed 

rule does not impose information 

collection requirements, that is, 

reporting, recordkeeping or third-party 

disclosure requirements. Consequently, 

there is no need for review by the Office 

of Management and Budget under the 

authority of the Paperwork Reduction 

Act of 1995 (44 U.S.C. 3501 et seq.). 

IV. Response to Comments 

Because of the large number of public 

comments we normally receive on 

Federal Register documents, we are not 

able to acknowledge or respond to them 

individually. We will consider all 

comments we receive by the date and 

time specified in the DATES section of 

this preamble, and, when we proceed 

with a subsequent document, we will 

respond to the comments in the 

preamble to that document. 

V. Regulatory Impact Analysis 

A. Statement of Need 

The purpose of this proposed rule is 

to propose the rescission of the Most 

Favored Nation Model, codified by an 

interim final rule with comment period 


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that appeared in the November 27, 2020 

Federal Register, and remove the 

associated regulatory text at 42 CFR part 

513, which also would withdraw the 

MFN Model. 

B. Overall Impact 

We have examined the impact of this 

rule as required by Executive Order 

12866 on Regulatory Planning and 

Review (September 30, 1993), Executive 

Order 13563 on Improving Regulation 

and Regulatory Review (January 18, 

2011), the Regulatory Flexibility Act 

(RFA) (September 19, 1980, Pub. L. 96– 

354), section 1102(b) of the Act, section 

202 of the Unfunded Mandates Reform 

Act of 1995 (March 22, 1995; Pub. L. 

104–4), Executive Order 13132 on 

Federalism (August 4, 1999), and the 

Congressional Review Act (5 U.S.C. 

804(2)). 

Executive Orders 12866 and 13563 

direct agencies to assess all costs and 

benefits of available regulatory 

alternatives and, if regulation is 

necessary, to select regulatory 

approaches that maximize net benefits 

(including potential economic, 

environmental, public health and safety 

effects, distributive impacts, and 

equity). Section 3(f) of Executive Order 

12866 defines a ‘‘significant regulatory 

action’’ as an action that is likely to 

result in a rule: (1) Having an annual 

effect on the economy of $100 million 

or more in any one year, or adversely 

and materially affecting a sector of the 

economy, productivity, competition, 

jobs, the environment, public health or 

safety, or state, local or tribal 

governments or communities (also 

referred to as ‘‘economically 

significant’’); (2) creating a serious 

inconsistency or otherwise interfering 

with an action taken or planned by 

another agency; (3) materially altering 

the budgetary impacts of entitlement 

grants, user fees, or loan programs or the 

rights and obligations of recipients 

thereof; or (4) raising novel legal or 

policy issues arising out of legal 

mandates, the President’s priorities, or 

the principles set forth in the Executive 

Order. 

A regulatory impact analysis (RIA) 

must be prepared for major rules with 

significant regulatory actions or with 

economically significant effects ($100 

million or more in any 1 year). Based on 

our estimates, OMB’s Office of 

Information and Regulatory Affairs has 

determined this rulemaking is 

‘‘economically significant’’ as measured 

by the $100 million threshold. 

Accordingly, we have prepared an RIA 

that to the best of our ability presents 

the costs and benefits of the rulemaking. 

C. Detailed Economic Analysis 

Removing the regulatory text at 42 

CFR part 513, which also would 

withdraw the MFN Model, would mean 

that the annualized/monetarized 

estimates of costs and transfers 

presented in the November 2020 interim 

final rule (85 FR 76235 through 76248) 

would not be realized. The regulatory 

impact analysis of the November 2020 

interim final rule estimated that the 

MFN Model would result in substantial 

overall savings for the Medicare 

program, the Medicaid program, and 

beneficiaries, and that model 

participants would experience costs 

associated with complying with the 

regulations, survey completion, and 

potential requests for financial hardship 

exemption. 

In the November 2020 interim final 

rule, we presented estimates from the 

CMS Office of the Actuary (OACT) (85 

FR 76236) and the HHS Office of the 

Assistant Secretary for Planning and 

Evaluation (ASPE) (85 FR 76240). We 

noted that there is much uncertainty 

around the assumptions for both the 

OACT and ASPE estimates, and refer 

readers to section VI.C. of the November 

2020 interim final rule for a more 

complete discussion of the estimated 

impacts of the MFN Model. These 

potential impacts were estimated to 

occur beginning January 2021 through 

December 2028, in alignment with a 

January 1, 2021 model start. However, 

because the MFN Model was not 

implemented on January 1, 2021, as 

contemplated in the November 2020 

interim final rule, such effects have not 

occurred. 

Nevertheless and notwithstanding the 

nationwide preliminary injunction, this 

analysis uses a baseline in which the 

November 2020 interim final rule was 

implemented on January 1, 2021, to 

calculate the monetized estimates of the 

effects of this proposed rule. We 

maintain the analytical approach 

described in the regulatory impact 

analysis of the November 2020 interim 

final rule, and for the purpose of 

quantifying the effects of this proposed 

rule, assume that the regulations added 

by the November 2020 interim final rule 

will be in full effect if this proposed rule 

is not finalized. As a result of the 

rescission of the regulations added by 

the November 2020 interim final rule, 

this proposed rule would, if finalized, 

prevent the occurrence of the estimated 

costs and transfers presented in the 

November 2020 interim final rule. We 

summarize this result in Tables 1 and 2, 

which illustrate, inversely, the 

monetized estimates contained in Table 

17 (85 FR 76247) and Table 18 (85 FR 

76248) of the November 2020 interim 

final rule. The period covered shown in 

Tables 1 and 2 begins January 2021 in 

alignment with the accounting 

statements and tables presented in the 

November 2020 interim final rule. This 

approach illustrates that this proposed 

rule, if finalized, would prevent the 

realization of the annualized/ 

monetarized estimates of costs and 

transfers that were presented in the 

November 2020 interim final rule. 

Because the MFN Model was not 

implemented, readers should 

understand that this proposed rule does 

not affect conditions in the past. 

TABLE 1—ACCOUNTING STATEMENT: ESTIMATED IMPACTS FROM CY 2021 TO CY 2028 AS A RESULT OF PROVISIONS OF

THIS PROPOSED RULE BASED ON THE OACT ESTIMATE

Category Estimates 

Units 

Year dollar Discount rate 

(%) Period covered 

Costs: 

Annualized Monetized ($million/year) ...... ¥29.4 2018 7 January 2021—December 2028. 

¥27.1 2018 3 January 2021—December 2028. 

To Whom ........................................................ Hospital/physicians. 

Annualized Monetized ($million/year) ...... ¥0.4 2018 7 January 2021—December 2027. 

¥0.4 2018 3 January 2021—December 2027. 

Transfers: 


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TABLE 1—ACCOUNTING STATEMENT: ESTIMATED IMPACTS FROM CY 2021 TO CY 2028 AS A RESULT OF PROVISIONS OF

THIS PROPOSED RULE BASED ON THE OACT ESTIMATE—Continued 

Category Estimates 

Units 

Year dollar Discount rate 

(%) Period covered 

Annualized Monetized ($million/year) ...... 11,502.5 2018 7 January 2021—December 2027. 

11,906.3 2018 3 January 2021—December 2027. 

From Whom to Whom .................................... Federal Government to hospitals/physicians and MA plans. 

Annualized Monetized ($million/year) ...... 4,087.2 2018 7 January 2021—December 2027. 

4,228.3 2018 3 January 2021—December 2027. 

From Whom to Whom .................................... Beneficiaries to hospitals/physicians and MA plans. 

Annualized Monetized ($million/year) ...... 577.5 2018 7 January 2021—December 2027. 

596.5 2018 3 January 2021—December 2027. 

From Whom to Whom .................................... States to hospitals/physicians and MA plans. 

TABLE 2—ACCOUNTING STATEMENT: ESTIMATED IMPACTS FROM CY 2021 TO CY 2028 AS A RESULT OF THE PROVISIONS

OF THIS PROPOSED RULE BASED ON THE ASPE ESTIMATE

Category Estimates 

Units 

Year dollar Discount rate 

(%) Period covered 

Costs: 

Annualized Monetized ($million/year) ...... ¥29.4 2018 7 January 2021—December 2028. 

¥27.1 2018 3 January 2021—December 2028. 

To Whom ........................................................ Hospital/physicians 

Annualized Monetized ($million/year) ...... ¥0.4 2018 7 January 2021—December 2027. 

¥0.4 2018 3 January 2021—December 2027. 

Transfers: 

Annualized Monetized ($million/year) ...... 7,058.3 2018 7 January 2021—December 2027. 

7,276.5 2018 3 January 2021—December 2027. 

From Whom to Whom .................................... Federal Government to hospitals/physicians and MA plans 

Annualized Monetized ($million/year) ...... 4,504.9 2018 7 January 2021—December 2027. 

4,638.6 2018 3 January 2021—December 2027. 

From Whom to Whom .................................... Beneficiaries to hospitals/physicians and MA plans 

Annualized Monetized ($million/year) ...... 342.4 2018 7 January 2021—December 2027. 

351.6 2018 3 January 2021—December 2027. 

From Whom to Whom .................................... States to hospitals/physicians and MA plans 

D. Regulatory Flexibility Act (RFA) 

The RFA requires agencies to analyze 

options for regulatory relief of small 

entities. For purposes of the RFA, small 

entities include small businesses, 

nonprofit organizations, and small 

governmental jurisdictions. Most 

hospitals and most other providers and 

suppliers are small entities, either by 

nonprofit status or by having revenues 

of less than $8 million to $41.5 million 

in any 1 year. Individuals and states are 

not included in the definition of a small 

entity. For details, see the Small 

Business Administration’s ‘‘Table of 

Small Business Size Standards’’ at 

https://www.sba.gov/document/support- 

-table-size-standards. The rule of thumb 

used by HHS for determining whether 

an impact is ‘‘significant’’ is an adverse 

effect equal to 3 percent or more of total 

annual revenues. 

This proposed rule, if finalized, 

would impact the vast majority of 

Medicare-participating providers and 

suppliers that submit claims for 

separately payable Medicare Part B 

drugs by preventing the impacts 

described in the November 2020 interim 

final rule (85 FR 76246) from being 

realized. There are over 20,000 small 

entities that would be included or 

affected by the MFN Model if the model 

was implemented. We refer readers to 

Table 3 and Table 8 in the November 

2020 interim final rule (85 FR 76195 

and 76219, respectively) to see the 

number of entities, as well as the types 

of providers and suppliers, that would 

be most likely impacted by the MFN 

Model. This proposed rule proposes to 

withdraw the MFN Model, and therefore 

would likely impact these same entities. 

Accordingly, we have determined that a 

Regulatory Flexibility Analysis (RFA) is 

required. As its measure of significant 

economic impact on a substantial 

number of small entities, HHS uses a 


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Federal Register / Vol. 86, No. 151 / Tuesday, August 10, 2021 / Proposed Rules 43623 

change in revenue of more than 3 to 5 

percent. We do believe that this 

threshold will be reached by the 

requirements in this proposed rule. 

Therefore, the Secretary has certified 

that this proposed will have a 

significant economic impact on a 

substantial number of small entities. 

The RFA presented in the November 

2020 interim final rule (85 FR 76245) 

describes the potential impact of the 

MFN Model, if it was implemented, on 

small entities. If finalized, this proposed 

rule would prevent those impacts from 

being realized. Specifically, the lower 

drug payments and alternative add-on 

payments described in section III.F. of 

the November 2020 interim final rule 

would not occur. Instead, payment for 

submitted claims would be made under 

the applicable Medicare payment 

methodology. This RFA, together with 

the preamble, constitutes the required 

analysis. 

In addition, section 1102(b) of the Act 

requires us to prepare an RIA if a rule 

may have a significant impact on the 

operations of a substantial number of 

small rural hospitals. This analysis must 

conform to the provisions of section 603 

of the RFA. For purposes of section 

1102(b) of the Act, we define a small 

rural hospital as a hospital that is 

located outside of a Metropolitan 

Statistical Area for Medicare payment 

regulations and has fewer than 100 

beds. Similar to urban entities, we 

estimate that this proposed rule, if 

finalized, would have a significant 

impact on small rural hospitals by 

preventing the impacts described in the 

November 2020 interim final rule (85 FR 

76246) from being realized. Specifically, 

if the MFN Model was implemented, 

these rural entities would experience 

drug payment reductions and overall 

payment reductions similar to urban 

entities. Instead, if this proposed rule is 

finalized, payment for submitted claims 

would be made under the applicable 

Medicare payment methodology. 

We welcome comments on our 

estimate of significantly affected 

providers and suppliers and the 

magnitude of estimated effects for this 

proposed rule. 

E. Unfunded Mandates Reform Act 

(UMRA) 

Section 202 of the Unfunded 

Mandates Reform Act of 1995 (UMRA) 

also requires that agencies assess 

anticipated costs and benefits before 

issuing any rule whose mandates 

require spending in any 1 year of $100 

million in 1995 dollars, updated 

annually for inflation. In 2021, that 

threshold is approximately $158 

million. As discussed in section V.C. of 

this proposed rule, the financial impacts 

for States (that is, an estimated overall 

reduction in State spending) presented 

in the November 2020 interim final rule 

(85 FR 76235 through 76248) would not 

be realized. This proposed rule does not 

mandate any spending by State, local, or 

tribal governments, or by the private 

sector, and hence an UMRA analysis is 

not required. 

F. Federalism 

Executive Order 13132 establishes 

certain requirements that an agency 

must meet when it promulgates a 

proposed rule (and subsequent final 

rule) that imposes substantial direct 

requirement costs on State and local 

governments, preempts State law, or 

otherwise has Federalism implications. 

As discussed in section V.C. of this 

proposed rule, the financial impacts for 

States (that is, an estimated overall 

reduction in State spending) presented 

in the November 2020 interim final rule 

(85 FR 76235 through 76248) would not 

be realized. Since this regulation does 

not impose any costs on State or local 

governments, preempt State law, or 

otherwise have Federalism implications, 

the requirements of Executive Order 

13132 are not applicable. 

In accordance with the provisions of 

Executive Order 12866, this proposed 

rule was reviewed by the Office of 

Management and Budget. 

Chiquita Brooks-LaSure, 

Administrator of the Centers for 

Medicare & Medicaid Services, 

approved this document on July 21, 

2021. 

List of Subjects for 42 CFR 513 

Administrative practice and 

procedure, Health facilities, Medicare, 

Reporting and recordkeeping 

requirements. 

PART 513—[REMOVED] 

■ For the reasons set forth in the 

preamble and under the authority at 5 

U.S.C. 301, the Centers for Medicare & 

Medicaid Services proposes to remove 

42 CFR part 513. 

Dated: August 3, 2021. 

Xavier Becerra, 

Secretary, Department of Health and Human 

Services. 

[FR Doc. 2021–16886 Filed 8–6–21; 4:15 pm] 

BILLING CODE 4120–01–P 


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