Q&A: CMS responds to alternative add-on question

Q. The IFC for MFN states on pp. 122–123, “Because Medicare allows the lesser of the applicable payment amount or the billed amount, MFN participants will have to ensure that they submit an appropriate billing amount (or charge) for the alternative add-on for the applicable quarter.”

The OPPS is a prospective payment system and the lesser of provisions do not apply for that payment system. Can a hospital submit a token or small charge and receive the full add-on payment amount? Asking hospitals to bill approximately $150 for each dose of a drug will significantly increase charges and distort cost to charge ratios. Will CMS clarify this in the OPPS January 1, 2021, transmittal and/or final rule?

A. Thank you for contacting the Centers for Medicare and Medicaid Services' (CMS) Most Favored Nation (MFN) Model Help Desk.

The OPPS claims processing system will apply the appropriate MFN alternative add-on payment amount (per covered unit) regardless of the charge that the MFN participant submits as the billed amount on the claim line.  This claims processing approach allows MFN participants that are paid under the OPPS to opt to submit a token charge to avoid impacting their cost to charge ratio.

For more information about the model, please visit the webpage or email MFN@cms.hhs.gov. We are available Monday-Friday from 8:30 a.m. to 7:30 p.m. EST., except federal holidays.

Editor’s note: This question was sent to CMS by Valerie Rinkle, MPA, CHRI, NAHRI Advisory Board member and a regulatory specialist for HCPro in Middleton, Massachusetts.