CMS Guidance for Inflation Rebates

Since we originally published this post, CMS has updated their guidance. You can find the latest information here.

The Centers for Medicare and Medicaid Services (CMS) released its initial guidance yesterday for the implementation of the Medicare Part B and Part D Prescription Drug Inflation Rebates. CMS is seeking public comment on a number of provisions in the guidance, and finalizing others without soliciting comments. Here are the highlights:

Part B [Guidance]

CMS is seeking comments on the processes it intends to use for the following:

  • To determine the number of drug units for calculating rebates,
  • To identify and remove 340B units for calculating rebates,
  • To identify and remove units for which a Medicaid drug rebate was paid for a covered outpatient drug,
  • To reduce or waive the rebate amount in the case of a drug shortage or severe supply chain disruption,
  • To allocate the financial responsibility for the rebate amount for a calendar quarter where there is more than one manufacturer of the Part B rebatable drug, and
  • To ensure the integrity of the rebate determination.

CMS is also seeking comment on operational considerations related to the inclusion of units furnished to beneficiaries who are enrolled in Medicare Advantage plans.

In its guidance, CMS notes:

[d]ue to timing constraints to implement the adjustment to beneficiary cost sharing for April 2023, CMS is issuing guidance on certain topics in this memorandum as final, without a comment solicitation:

  • Determination of Part B Rebatable Drugs (section 30);
  • Computation of Beneficiary Coinsurance and Amounts Paid Under Section 1833(a)(1)(EE) of the Social Security Act (section 40); and
  • Identification of the Specified Amount for the Calendar Quarter, Payment Amount Benchmark Quarter, Benchmark Quarter CPI-U, and Rebate Period CPI-U as well as the Determination of Inflation-Adjusted Payment Amount and Adjustments for Changes to HCPCS Codes (subsections 50.2-50.7 and 50.9).”


Part D [Guidance]


CMS is seeking comment for the implementation of the Part D inflation rebates on topics such as:

  • Options to identify the Part D rebatable drug billing units on the prescription claim and PDE file to assure that manufacturers are being accurately billed for Part D drug inflation rebates,
  • Options for methods to identify 340B units to exclude them from Part D rebatable drug units beginning in 2026,
  • Options to bill manufacturers in the future for Part D inflation rebates for Part D rebatable drugs of manufacturers that do not have an agreement in effect under the Medicaid Drug Rebate Program (MDRP), as well as Part D rebatable drugs that are not covered outpatient drugs under the MDRP,
  • The processes CMS intends to use to reduce or waive the rebate amount in the case of a drug shortage or severe supply chain disruption,
  • The mechanisms CMS intends to use to ensure integrity of the Part D drug inflation rebate invoicing process, including the use of Preliminary Rebate Reports and Preliminary True-Up Reports, and
  • The process CMS intends to use to impose Civil Monetary Penalties (CMPs) on manufacturers that fail to pay rebates.

Comments are due to by March 11, 2023.

The CMS Comment Request is posted in the Federal Register.

Here is a CMS Fact Sheet about the guidance.

Published on Feb. 10, 2023 by Scott Hoffman

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