NPC Comments on CMS CY 2023 Payment Policies under the Physician Fee Schedule

NPC's comments offer input on CMS's implementation of the Discarded Drug Refund Policy, support continuing the add-on payment for at-home COVID-19 vaccinations, and provide recommendations on the Quality Payment Program

September 6, 2022

The Honorable Chiquita Brooks-LaSure
Administrator, Centers for Medicare & Medicaid Services
Department of Health and Human Services
7500 Security Boulevard
Baltimore, MD 21244

Submitted electronically via 

RE: Medicare and Medicaid Programs; CY 2023 Payment Policies under the Physician Fee Schedule and Other Changes to Part B Payment Policies; Medicare Shared Savings Program Requirements; Medicare and Medicaid Provider Enrollment Policies, Including for Skilled Nursing Facilities; Conditions of Payment for Suppliers of Durable Medicaid Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS); and Implementing Requirements for Manufacturers of Certain Single-dose Container or Single-use Package Drugs to Provide Refunds with Respect to Discarded Amounts [CMS–1770–P]

Dear Administrator Brooks-LaSure:

The National Pharmaceutical Council (NPC) appreciates the opportunity to submit comments regarding the Centers for Medicare & Medicaid Services (CMS) notice of proposed rulemaking, Medicare and Medicaid Programs; CY 2023 Payment Policies under the Physician Fee Schedule, and Other Changes to Part B Payment Policies; Medicare Shared Savings Program Requirements; Medicare and Medicaid Provider Enrollment Policies, Including for Skilled Nursing Facilities; Conditions of Payment for Suppliers of Durable Medicaid Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS); and Implementing Requirements for Manufacturers of Certain Single-dose Container or Single-use Package Drugs to Provide Refunds with Respect to Discarded Amounts. 

NPC is a health policy research organization dedicated to the advancement of good evidence and science and to fostering an environment in the United States that supports medical innovation. NPC is supported by the major U.S. research-based biopharmaceutical companies. We focus on research development, information dissemination, education, and communication of the critical issues of evidence, innovation, and the value of medicines for patients. Our research helps inform important health care policy debates and supports the achievement of the best patient outcomes in the most efficient way possible. 

NPC’s comments and recommendations, which we provide more detail on below, are as follows:

I. Regarding CMS’s proposed implementation of the Discarded Drug Refund Policy, NPC recommends the Agency work to ensure that providers and manufacturers have sufficient information and time to comply with proposed requirements and to ensure the accuracy of refund payments.

II. NPC supports CMS’s proposal to continue the add-on payment for at-home COVID-19 vaccinations.

III. Regarding the Quality Payment Program, NPC recommends the Agency consider additional factors in its proposed oncology-specific Merit-based Incentive Payment System (MIPS) Value Pathway (MVP), efforts to incorporate health disparities and price transparency into the Consumer Assessment of Healthcare Providers and Systems (CAHPS) for MIPS Survey, and digital measure development initiative.

I. Proposed Implementation of Discarded Drug Refund Policy 

The Discarded Drug Refund Policy, as outlined in section 1847A(h) of the Social Security Act (SSA), will require manufacturers to provide a refund to CMS for certain discarded amounts from a refundable single-dose container or single-use package drug. Starting January 1, 2023, manufacturers will be responsible for refunds based on the value of discarded drug above 10% of the total allowed charges for that drug, with CMS having the authority to use a level other than 10% (SSA § 1847A(h)(3)) in unique circumstances.

To implement this requirement, CMS proposes requiring providers to use the JW modifier to identify discarded amounts per CMS’s current billing procedures and a separate new JZ modifier when there are no discarded amounts for dates of service on or after January 1, 2023. NPC has concerns regarding this proposed new provider billing requirement for the JZ modifier and the potential for confusion with providers billing discarded amounts. In the proposed rule, CMS notes that the current JW modifier used to report discarded amounts is often omitted on claims and that, as a result, JW modifier data is incomplete. Given the current challenges with provider use of the existing JW modifier, NPC is concerned that the proposed new requirement of the JZ modifier may pose additional challenges for providers to meet billing requirements and may lead to incorrectly reported discarded amounts. Should CMS proceed with this proposed new requirement, we urge the Agency to work closely with providers to ensure adequate guidance and support in transitioning to these new billing requirements to protect against creating additional administrative burden and ensure accurate reporting of discarded amounts as manufacturer refund amounts rely on this data.

Additionally, in the proposed rule, CMS cites its statutory authority to increase the applicable percentage used to determine the refund amounts for drugs with unique circumstances as described under section 1847A(h)(3)(B)(ii) of the Act. NPC appreciates CMS’s recognition that there may be unique circumstances for certain drugs which may warrant a higher applicable percentage when calculating refund amounts. We ask that the Agency provide additional clarity regarding the process for manufacturers of new drugs with such unique circumstances to request an increase in their applicable percentage. Further clarification will help manufacturers of new therapies for which a higher applicable percentage is warranted not to be penalized by this new policy.

CMS also proposes to provide manufacturers annual reports with information for each calendar quarter which would include, per statute, the number of units of discarded and refund amounts that the manufacturer is liable for. As CMS proposes that the report be based on claims finalized by the end of the second calendar quarter (i.e., June 30) of the year in which the report is sent and would include lagged claims not included in the prior year’s report, we ask that CMS provide sufficient granularity in the report such that manufacturers can clearly distinguish the timespan for discarded units, particularly which units were from which quarters and which were from lagged claims. This is important to ensure transparency in the application of this policy and support the accuracy of refund payments. 

CMS also proposes calculating the refund using the payment limits for the quarter, but it is unclear how CMS defines the payment limit. We ask CMS to clarify that it will use the actual payment rate for the discarded drug on each claim for the quarter. This is important given that CMS may use different payment limits for different types of providers, as was the case with 340B providers in the hospital outpatient setting in CY 2018-2022.

NPC agrees with CMS that establishing a dispute resolution process will aid in the successful implementation of this policy and support CMS’s efforts to ensure each manufacturer has an opportunity to dispute the report. However, given the issues CMS has noted regarding the current JW modifier data being incomplete, we ask that the Agency provide manufacturers with a larger window of time beyond the 30-days proposed for submitting a dispute to allow manufacturers sufficient time to review the report, determine what errors, if any, are present, and provide supporting evidence for a dispute. A larger window would allow for a more efficient dispute resolution process that better addresses potential errors and supports accurate refund amounts under this policy. 

CMS asks for feedback on manufacturers’ audits, indicating audits will be addressed in future rulemaking. The manufacturer requirement under section 1847A(h) of the SSA is to provide refunds. NPC believes any manufacturer audit should be limited to whether the refund payment occurred.

Finally, we note that the refunds are a mandatory government payment, akin to a tax, and not a voluntary price concession. As such, they are excluded from Average Sales Price (ASP) and Medicaid price reporting metrics. CMS did not address this issue in the rule, and we ask CMS to issue guidance confirming refunds under section 1847A(h) of the SSA are excluded from ASP, Average Manufacturer Price, and Medicaid Best Price calculations.

II. Continued Add-On Payment for At-Home COVID-19 Vaccinations 

NPC supports CMS’s proposal to continue paying the add-on payment of $35.50 for at-home COVID-19 vaccinations for CY 2023 and believes that CMS should continue paying for these vaccinations during the public health emergency (PHE). We appreciate the Agency’s commitment to encouraging such vaccinations and agree that this payment policy is important to removing barriers to vaccinations and addressing the pandemic. Given the impact of the PHE on access to preventive care (such as vaccinations) and the potential adverse health outcomes, NPC encourages CMS to continue to monitor vaccine utilization during the PHE and consider additional policies to address potential access barriers limiting vaccine uptake and support patients receiving appropriate immunizations.

III. Additional Considerations Regarding Quality Payment Program Proposals

Proposed New Oncology-Specific MIPS Value-Pathway (MVP) 

In addition to the seven MVPs already finalized for the 2023 performance period, CMS proposes five new MVPs, including one oncology-specific MVP, Advancing Cancer Care. NPC appreciates CMS’s proposal of a new oncology MVP and encourages CMS to consider ways to recognize the complexity of cancer diagnoses and treatments, effectively balance cost and quality measures, and incorporate meaningful patient-reported outcome performance measures (PRO-PMs) as oncology is a complex branch of medicine that covers many site-specific diseases and patient types. CMS should consider this challenge in its oncology MVP, as multiple MVPs that focus on sub-populations of cancer patients (e.g., patients with individual types of cancer, patients with advanced or metastatic disease) may be more appropriate than an overarching oncology MVP. CMS should also design MVPs with cost measures appropriately balanced by meaningful quality measures that assess medication access and patient outcomes. In addition, NPC encourages CMS to consider including patient-reported measures (PRMs) and PRO-PMs in the MVP. Recognizing outcomes that are most important to patients (e.g., symptom management, quality of life) and ensuring care aligns with patient preferences, values, and goals can promote stronger patient engagement and better align incentives. The research that NPC and Discern Health conducted in 2019 identified high-priority areas for oncology PRO-PMs, including symptoms and symptom burden, physical functional status, care coordination, access to care, the experience of clinical processes, goal attainment, care concordance, and shared decision-making.[1] NPC recommends that CMS seek to address these high-priority areas through PRMs in this oncology-specific MVP. 

Proposed Additional Health Disparities and Price Transparency Questions to CAHPS for MIPS Survey

The CAHPS for MIPS survey was developed by CMS to measure a patient’s experience and care within a clinician group across several domains, including timely care, appointments, and information, provider communication, shared decision, and care coordination. 

CMS proposes adding an additional question to the CAHPS survey specific to health disparities that would focus on the patient’s experience with discrimination based on the characteristics of the patient. NPC supports CMS’s proposal to address health disparities in the survey, particularly as such information can help improve health equity and delivery of care.

CMS also proposes to add a more general price transparency question that would encompass additional areas of a patient’s care, such as whether the patient talked with anyone on their health care team about the cost of health care services and equipment. Currently, the CAHPS for MIPS survey includes a question regarding whether a patient has talked to anyone on the health care team regarding their prescription medicines costs in the last six months. NPC supports transparency and improved information access for all stakeholders, particularly patients, to promote informed decisions about appropriate care and improve health. We appreciate CMS’s proposal to take a more holistic approach to costs that addresses the 16% of health care spending from prescription drug spending as well as the other 84% of health care spending.[2]  However, we also believe it is important that the survey questions address other factors that may impact patient access and cost. Through our 2019 collaboration with the Pharmacy Quality Alliance, the Access to Care Roundtable identified several medication access barriers, including side effects, low patient health literacy, transportation, and geographic location, provider availability, language barriers, cultural differences, and insurance and formulary issues.[3] We encourage CMS to develop survey questions that address these barriers to care. Clinicians should consider the full spectrum of variables that apply to individual patients when making treatment decisions including, but not limited, to cost. As discussed during NPC and PQA’s Access to Care Roundtable, conversations about costs alone may result in patients making short-term decisions without fully considering future costs or impact on clinical outcomes. 

Request for Information Regarding Digital Quality Measures 

In this proposed rule, CMS seeks input on a future refined definition of digital quality measures and potential considerations, or challenges, related to non-electronic health record (EHR) data sources.

NPC agrees with the goals of the digital quality measurement initiative. Current systems for collecting quality measurement data do not adequately capture the information needed for meaningful outcome measures, including patient-reported measures (PRMs). NPC’s research finds that the use of PRMs, including patient-reported outcome measures (PROMs), patient-reported performance measures (PR-PMs), and patient-reported outcome performance measures (PRO-PMs), should be promoted as these measures have the potential to emphasize what is most meaningful to patients.[4] Research performed by NPC and Discern Health identifies several key priority areas for PR-PM development, focused on cancer care, for use in value-based payment. These areas included patient-reported concepts focused on: 

  1. Symptoms interfering with daily activities, 
  2. Collection and conveyance of symptoms and functioning to providers, 
  3. Provider assessment of patients for emotional or social status or concerns and offer of referral to treatment, and 
  4. Consideration of patient goals and values across the treatment process.[5] 

Patients’ views of quality may differ from those of providers and policymakers. To understand and hold clinicians accountable for the patient perspective, CMS should prioritize PRMs developed in collaboration with patients and families as an area of focus in its digital quality measurement portfolio. 

NPC further recommends that CMS focus its digital quality measure development efforts on cross-cutting quality measures that apply broadly across clinical specialties. While many accountable care measure sets include some cross-cutting measures, measures related to medication adherence and access to specialists and non-physician clinicians remain limited. As described in NPC and Discern Health’s 2014 report “Accountable Care Measures for High-Cost Specialty Care, and Innovative Treatment,” gaps in cross-cutting measures include: lifestyle modification, education and monitoring for diet and exercise, health risk assessment, monitoring disease progression, comorbid condition referral/treatment, referrals to non-physician services, education, means to prevent disease transmission, and measures of clinical effectiveness.[6] 

NPC recommends that CMS prioritize the advancement of PR-PMs and cross-cutting measures in its digital quality measurement portfolio and continue incorporating stakeholder feedback to ensure quality measures are meaningful and used effectively to improve patient care.

IV. Conclusion

NPC appreciates CMS’s efforts to ensure continued access to COVID-19 at-home vaccinations and improve the Quality Payment Program. For the Quality Payment Program, we ask that the Agency consider the complexities of oncology care in its proposal for an oncology-specific MVP and that it move beyond cost in its questions for the CAPHS for MIPS Survey. NPC also encourages CMS to work to advance PR-PMs and cross-cutting measures in its digital quality measure initiative, given that such measures emphasize what is most meaningful to patients. In addition, regarding the proposed implementation of the Discarded Drug Refund Policy, NPC recommends the Agency work to ensure that providers and manufacturers have sufficient information and time to comply with proposed requirements and ensure the accuracy of refund payments.

Thank you for the opportunity to provide comments. We look forward to continuing this conversation and would be happy to meet to expand upon our comments and share our research. 


John M. O’Brien, PharmD, MPH
President and Chief Executive Officer

[1] Valuck T, Schmidt T, Perkins B, et al. Improving patient-reported measures in oncology. February 21, 2019. 
[2] Kleinrock M, Westrich K, Buelt L, Aitken M, Dubois RW. Reconciling the Seemingly Irreconcilable: How Much Are We Spending on Drugs? January 11, 2019.  
[3] Pharmacy Quality Alliance & National Pharmaceutical Council. Access to care: Development of a medication access framework for quality measurement. March 2019. 
[4] Valuck T, Blaisdell D, Dugan DP, et al. Improving Oncology Quality Measurement in Accountable Care: Filling Gaps with Cross-Cutting Measures. J Manag Care Spec Pharm. 2017;23(2):174-181. doi:10.18553/jmcp.2017.23.2.174.
[5] Valuck T, Schmidt T, Perkins B, et al. Improving patient-reported measures in oncology. February 21, 2019. 
[6] McClellan M, Penso J, Valuck T, et al. Accountable care measures for high-cost specialty care and innovative treatment. October 27, 2014.