CMS Releases CY 2025 Medicare Physician Fee Schedule Final Rule

The Centers for Medicare & Medicaid Services (CMS) on Nov. 1, 2024, released the calendar year (CY) 2025 Revisions to Payment Policies under the Physician Fee Schedule (MPFS) and Other Revisions to Medicare Part B (CMS-1807-F) Final Rule, which includes proposals related to Medicare physician payment and the Quality Payment Program (QPP).

Additionally, this rule updates the interpretation of the federal 60-day overpayment refund requirement (the Overpayment Statute). For an analysis of those changes, see Holland & Knight's blog post, "Final Medicare Overpayment Rules a Mixed Bag for Providers," Nov. 12, 2024.

More information about the Medicare Physician Fee Schedule Final Rule is available at the following resources:

• Final Rule
• Press Release
• MPFS Fact Sheet
• Medicare Shared Savings Program (MSSP) Fact Sheet
• QPP Fact Sheet
• Medicaid Drug Rebate Program (MDRP)

Key Proposals of Note

Finalized proposals made by CMS in the rule include:

• setting the MPFS conversion factor (CF) of $32.35 for CY 2025, a 2.83 percent decrease from the current CF of $33.29
• adding a new Hospital Inpatient or Observation (I/O) Evaluation and Management (E/M) add-on for infectious diseases
• expanding the definition of "Telecommunications System" to include audio-only services
• establishing an APP Plus quality measure set
• maintaining the performance threshold at 75 points for the CY 2025 performance period
• maintaining the 75 percent data completeness threshold at 75 percent through the 2028 performance period
• adding six new Merit-Based Incentive Payment System MIPS Value Pathways (MVPs) related to ophthalmology, dermatology, gastroenterology, pulmonology, urology and surgical care
• modifying currently finalized MVPs, including the consolidation of two currently finalized neurology-focused MVPs into a singular neurological MVP

Conversion Factor and Specialty Impacts

CMS finalized a MPFS conversion factor of $32.35 for CY 2025, a 2.83 percent decrease from the current CF of $33.29. Table 110 in the Final Rule shows the impact by specialty, which varies based on several factors. Notably, the table does not reflect the statutory fix which expires on Dec. 31, 2024. Thus, the actual impact on specialties would be approximately 2.93 percent lower than what is shown in Table 110. Additionally, CMS included an additional impact table for this rulemaking cycle (Table 111) that includes a facility/nonfacility breakout of payment changes. The 2025 anesthesia CF is finalized at a rate of $20.32, representing a 2.20 percent reduction from the 2024 anesthesia CF of $20.77.

Determination of Practice Expense Relative Value Units (RVUs)

CMS did not receive new wage data or other information for use in clinical labor pricing prior to the CY 2025 Proposed Rule, and thus finalized that CY 2025 clinical labor pricing be based upon CY 2024 pricing finalized in the CY 2024 final rule. However, CMS has incorporated utilization data for two new specialties: Marriage and Family Therapist (MFT) and Mental Health Counselor (MHC). In response to comments from stakeholders, CMS has finalized the delay of the use of 2017-based MEI for PFS rate setting in CY 2025.

Add-On Codes

CMS finalized a change to which situations G-2211 can be billed. The change allows for G-2211 to be billed when the underlying E/M service (99441-99446) is performed on the same day of service as an annual wellness visit, vaccine administration or any Medicare Part B preventative service when furnished in either the office or outpatient setting.

Additionally, CMS finalized a proposal to create a new Hospital Inpatient or Observation (I/O) Evaluation and Management (E/M) add-on for Infectious Diseases (HCPCS code G0545). The code describes intensity and complexity inherent to hospital inpatient or observation care associated with a confirmed or suspected infectious disease performed by a physician with specialized training in infectious diseases and would be valued at a work RVU of 0.89. CMS believes that there will be an analogous relationship between G2211 and its common base code of 99213 with G0545 and 99223. G0545 could be billed based on visit level; or initial, same day discharge, or subsequent hospital inpatient or observation codes. Additionally, the code will be separately reportable to 99221-99223 and 99231-99236.

Telehealth

CMS finalized several policy changes that impact coding and payment for the virtual elements of care delivery. Notably, CMS continues to maintain its lack of statutory authority to extend COVID-19 telehealth waivers set to expire at the end of this calendar year. Without legislative action, some major Medicare telehealth waivers will expire on Dec. 31, 2024. However, certain telehealth flexibilities do not require congressional action to be extended.

These flexibilities include virtual components of direct supervision and changes to the definition of "interactive telecommunication." CMS finalized several "temporary" codes on the Medicare telehealth list for at least another year, though CMS noted it will conduct a comprehensive analysis of all these codes to decide which should be made permanent and which should eventually be removed from the Medicare telehealth list. Notably, CMS reversed course on several requests to add codes to the lists. CMS also finalized its proposal not to reimburse the 16 new audio-visual and audio-only telemedicine E/M codes created by the Current Procedural Terminology (CPT) Editorial Panel.

Medicare Telehealth Services List. CMS finalized the addition of Healthcare Common Procedure Coding System (HCPCS) codes G0541-G0543, and G0539-G0540, and CPT Codes 97550, 97551, 97552, 96202 and 96203. Additionally, CMS finalized the addition of several codes to the Medicare Telehealth Services List on a permanent basis, including HCPCS codes G0011, G0013 and G0560.

Caregiving. CMS finalized three new HCPCS codes (G0451, G0452 and G0453) for caregiver training, allowing verbal consent and possible inclusion in telehealth services. These codes ensure that caregiver training aligns with the patient's treatment plan.

Telecommunications System. CMS finalized expanding the definition of "Telecommunications System" to include audio-only services. CMS clarified that no additional documentation, except for the appropriate modifier as mentioned above, are needed. Additionally, CMS expressed that upon review of comments and their analysis, CMS does not believe it would be appropriate at this time to permit two-way, real-time audio-only communication technology for telehealth services furnished at originating sites other than the patient's home.

Frequency Limitations. CMS finalized removal of the frequency limitations for Critical Care Consultation Services HCPCS Codes G0508 (requires telehealth consultation, critical care, initial visit and physicians typically spend 60 minutes communicating with the patient and providers via telehealth) and G0509 (telehealth consultation, critical care, subsequent, and physicians typically spend 50 minutes communicating with the patient and providers via telehealth) for CY 2025. Additionally, CMS finalized delaying implementation of the telehealth frequency limitations for subsequent nursing facility and inpatient hospital visits for an additional year, to include two-way, real-time audio-only communication technology for any telehealth service furnished to a beneficiary in their home, and to continue to permit the distant site practitioner to use their currently enrolled practice location instead of their home address when providing telehealth services from their home.

Distant/Originating Site Requirements. CMS finalized as proposed that, through CY 2025, CMS will continue to permit the distant site practitioner to use their currently enrolled practice location instead of their home address when providing Medicare telehealth services from their home. Additionally, CMS reiterated its assertion that the beneficiary's home continues to be a permissible originating site for certain types of services including those furnished for the diagnosis, evaluation or treatment of a mental health disorder, including a Substance Use Disorder (SUD), and for monthly End Stage Renal Disease (ESRD)-related clinical assessments described in section 1881(b)(3)(B). Further, CMS reiterated that the expiration of certain flexibilities for Medicare telehealth services is not expected to impact broader utilization of these services because reasonable and necessary services for the diagnosis or treatment of an illness or injury continue to be covered.

Services for Health-Related Social Needs

In the 2024 PFS final rule, CMS finalized several G-codes for Community Health Integration (G0019 and G0022), Social Determinants of Health Risk Assessment (G0136), and Principle Navigation Services (G0023, G0024, G0140 and G0146). In the 2025 MPFS proposed rule CMS sought comment on refinements and implementation, specifically how these codes are being furnished in conjunction with community-based organizations. CMS did not finalize any changes in response but will consider the comments received in future rulemaking.

Potentially Misvalued Codes

CMS finalized several determinations of misvalued codes.

Five public nominations for misvalued codes/code sets include:

• Osteotomy of spine code set (CPT codes 22210, 22212, 22214 and 22216)
  • CMS concurred
• Arthrodesis of the sacroiliac joint Code (CPT code 27279)
  • CMS does not concur
• Sleep study code (CPT code 95800)
  • CMS does not concur
• Fine needle aspiration biopsy code set (CPT codes 10021, 10004, 10005 and 10006)
  • CMS does not concur
• Tympanostomy codes
  • CMS finalized the creation of a new add-on G code, HCPCS code G0561 to be billed with 69433, in order to describe the additional resource costs associated with using tympanostomy tube delivery services and/or systems falling under emerging technology and services categories.
  • CMS finalized contractor pricing for CY 2025

Direct/Virtual Supervision

CMS finalized as proposed to continue defining direct supervision to allow real-time audio and visual interactive telecommunications for direct supervision through Dec. 31, 2025. CMS noted that an abrupt transition to pre-public health emergency policies may pose a barrier to access, such as incident-to services. Additionally, CMS finalized permanent expansion of the definition of direct supervision to include audio-video for a subset for services. The services that will fall under this expanded definition, after Dec. 31, 2025, include "incident-to services described under § 410.26: (1) services furnished incident to a physician or other practitioner's service when provided by auxiliary personnel employed by the billing practitioner and working under their direct supervision, and for which the underlying HCPCS code has been assigned a PC/TC indicator of '5';10 and (2) services described by CPT code 99211 (Office or other outpatient visit for the evaluation and management of an established patient that may not require the presence of a physician or other qualified health care professional). As provided in the code descriptor for CPT code 99211, an office or other outpatient visit for the evaluation and management of an established patient may not require the presence of a physician or other practitioner and may be furnished incident to a physicians' service by a nonphysician employee of the physician under direct supervision."

Skin Substitutes

CMS finalized that billing and payment codes that describe skin substitutes would not be counted for purposes of identifying part B rebatable drugs for calendar quarters in 2025. CMS noted it plans to revisit discarded drug refund obligations for skin substitutes in future rulemaking.

In the 2025 proposed rule, CMS proposed to establish national pricing for HCPCS code G0465 (Autologous platelet rich plasma) for CY 2025, valued at 1.50 based upon the direct PE inputs included with CPT code 15271, with the additional inclusion of the 3C patch system (SD343) supply, priced in CY 2023. CMS specified that payment includes debridement, which may involve a wound reaching the bone. Therefore, debridement may not be billed separately.

In this final rule, CMS modified its original proposal and is instead finalizing national pricing for HCPCS code G0465 for CY 2025 using a crosswalk to CPT code 15275 (Application of skin substitute graft to face, scalp, eyelids, mouth, neck, ears, orbits, genitalia, hands, feet and/or multiple digits, total wound surface area up to 100 square centimeters; first 25 square centimeter or less wound surface area) instead of CPT code 15271. CMS asserts this is because CMS deems this code to more accurately reflect the work involved in furnishing the service described by HCPCS code G0465. Further, CMS finalized an increase in the supply price from $678.57 to $770.83. In instances in which prices appear inaccurate and direct inputs do not reflect the full range of available PRP products, CMS encourages interested parties to submit invoices or other relevant information by Feb. 10 of the following year to improve pricing accuracy in the direct PE database, following a process similar to its consideration of Relative Value Scale Update Committee (RUC) recommendations.

Additionally, CMS acknowledged that the service provided under HCPCS code G0465 may differ from skin substitutes, and CMS considers the work to be comparable, resulting in the use of CPT code 15275 as the crosswalk. CMS continued that the code descriptor for HCPCS code G0465 includes description of all other preparatory procedures and that CMS does not agree that the additional work described in the debridement codes referenced by commenters is not accounted for in the valuation of HCPCS code G0465. Therefore, CMS finalized a work RVU of 1.83 for HCPCS code G0465, which is higher than the work RVU for CPT code 15271, based on a crosswalk to CPT code 15275. Additionally, CMS finalized an increase in the supply price to $770.83.

Drugs and Biological Products Paid Under Medicare Part B

Refunds for Discarded Amounts of Certain Single-Dose Container or Single-Use Package Drugs (Sections 414.902 and 414.940). CMS finalized changing the method for identifying drugs excluded from the definition of refundable drugs if they have been paid under Part B for fewer than 18 months. CMS also finalized defining single-dose container drugs and requiring the JW modifier for discarded amounts during the preparation process if a billing supplier is not administering the drug.

Payment Limit Calculation with Negative or Zero Average Sales. CMS finalized calculating payment limits when manufacturers report negative or zero Average Sales Price (ASP) data. CMS aims to amend Section 414.904(i) to establish a payment limit for single-source drugs under these circumstances.

Payment of Radiopharmaceuticals in Physician Offices. CMS finalized codification in Section 414.904(e)(6) that for radiopharmaceuticals furnished outside hospital outpatient departments, Medicare Administrative Contractors (MACs) should determine payment limits based on methodologies in place on, or prior to, November 2003 .

Immunosuppressive Therapy. CMS finalized modifying regulations to include orally or enterally administered compounded formulations of U.S. Food and Drug Administration (FDA)-approved drugs with approved immunosuppressive indications, or those deemed reasonable and necessary by a MAC for specific immunosuppressive treatments.

Blood Clotting Factors. CMS highlighted that gene therapies have recently been FDA-approved for hemophilia treatment. In response, CMS finalized proposals to update regulatory text to clarify that blood clotting factors must be self-administered to qualify for the furnishing fee under existing CMS policy, and that the furnishing fee is only available to entities that furnish blood clotting factors.

Medicare Shared Savings Program

Prepaid Shared Savings. CMS finalized a new prepaid shared savings option for qualifying Accountable Care Organizations (ACOs) that include those participating in Levels C-E of the BASIC track or the ENHANCED track with consistent demonstration of shared savings. At least 50 percent of the earned shared savings will be required to be spent on direct beneficiary services that have a reasonable expectation of improving or maintaining the health or overall functioning of the beneficiary. Additionally, up to 50 percent can be spent on staffing and infrastructure costs. Applications would be accepted during the annual application cycle, with expectations of a Jan. 1, 2026, start date. Notably, CMS made a slight revision in the final rule to the definition of direct beneficiary services to include in-kind items or services provided to an ACO beneficiary that are not otherwise covered by Traditional Medicare but are evidence-based and medically appropriate for the beneficiary based on clinical and social risk factors (Table 117).

Health Equity Benchmark Adjustment (HEBA). Beginning Jan. 1, 2025, CMS finalized with modifications an adjustment to an ACO's historical benchmark using HEBA, based on the proportion of assigned beneficiaries enrolled in Part D LIS or dual-eligibility in Medicare and Medicaid. The adjustment would be based on the highest of three values: HEBA, a positive regional adjustment or the prior savings adjustment.

APP Plus. The APP Plus quality measure set is finalized with modification to timeline for incorporation. Beginning in performance year 2025, CMS will require MSSP ACOs to report on this measure set. The APP quality measure set will neglect to be an available reporting option. Over an extended timeline, the measure set will grow to include 11 measures, including five newly proposed measures and 6 previously utilized measures. MIPS CQMs would not be an available measure type. CMS expressed their intent to use Medicare CQMs as a transition step to adopt digital quality measurement. The MSSP eCQM incentive will be extended for an unspecified number of years and would only apply to APP Plus participants that report all eCQMs in the newly-proposed measure set and meet all data completeness requirements for those eCQMs. As a result of these modifications, there will be a total of six measures in the APP Plus quality measure set for the CY 2025 performance period/2027 MIPS payment year.

CMS finalized the definition of "primary care services under MSSP," with one modification, aimed to better capture services provided by primary care providers. Additions to the definition include Safety Planning Interventions, Post-Discharge Telephonic Follow-up, Virtual Check-in, Advanced Primary Care Management Services, Cardiovascular Risk Assessment and Management, Interprofessional Consultation, Direct Caregiver Training and Individual Behavior Management Caregiver Training.

Medicare Part B Payment for Preventive Vaccine Administration Services

CMS finalized the proposal to allow Rural Health Clinics (RHCs) and Federally Qualified Health Centers (FQHCs) to bill or Part B preventive vaccines and the administration at the time of service. Furthermore, payments for these claims will be made according to Part B preventive vaccine payment rates in other settings, to be annually reconciled with the facilities' actual vaccine costs on their cost reports. In acknowledgment of necessary operational changes necessary, CMS finalized as proposed that RHCs and FQHCs begin billing for preventive vaccines and their administration at the time of service, for dates of service on or after July 1, 2025.

Updates to the Quality Payment Program

CMS finalized maintaining the performance threshold at 75 points for the CY 2025 performance period. Additionally, CMS finalized maintaining the 75 percent data completeness threshold at 75 percent through the 2028 performance period.

MVPs

Program Enhancements. CMS finalized several updates aimed to drive improvement in clinicians' performance and healthcare quality through payment policy. CMS received several comments noting the administrative burden that remains in the reporting of MVPs. Regardless, CMS reasserted plans to make MVPs mandatory. The timeline regarding this will be set in future rulemaking.

Six new MVPs were finalized for ophthalmology, dermatology, gastroenterology, urology, pulmonology and surgical care, bringing the total number of available MVPs to 21.

Advanced Primary Care Management (APCM). CMS finalized as proposed payment for APCM services provided by a physician or qualified healthcare professional responsible for all primary care during a calendar month. This includes a bundle of specific care management and communication technology-based services with a performance measurement requirement, reportable via the Value in Primary Care MVP.

The six new MVPs are:

• Complete Ophthalmologic Care
• Dermatological Care
• Gastroenterology Care
• Optimal Care for Patients with Urologic Conditions
• Pulmonology Care
• Surgical Care

Additionally, CMS implemented modifications to currently finalized MVPs. Additionally, CMS finalized the consolidation of two previously finalized neurology-focused MVPs into a singular neurological MVP, with modifications (see B.11: Quality Care for Patients with Neurological Conditions MVP).

MVP Reporting. CMS estimates 80 percent of specialties will have applicable MVPs available. Non-MIPS eligible practitioners would not need to report the MVP to furnish and bill for APCM services.

MVP and Subgroup Reporting. CMS is implementing MVPs and subgroup reporting to allow clinicians to report measures that directly reflect their clinical practice. Although traditional MIPS remains an option, CMS plans to fully adopt MVPs and eventually sunset traditional MIPS in the future.

Low Titer O+ Whole Blood Transfusion Therapy During Ground Ambulance Transport

CMS finalized expanding the ALS2 definition to include low titer O+ whole blood transfusions (WBT), making WBT an ALS2 level skill under the Medicare Ambulance Fee Schedule. The prior definition included the administration of one or more of seven specified advanced interventions.

CMS noted that CMS does not have the authority to provide an additional payment, such as an add-on payment for the administration of WBT under the AFS.

Additionally, CMS did not address alternative blood products in the proposed or final rules. Notably, CMS concurred with commenters that the administration of packed red blood cells (PRBCs) or plasma, or a combination of PRBCs and plasma, should independently qualify as ALS2 procedures.

Specifically, CMS is modifying the proposed policy to add the administration of low titer O+ whole blood to the list of procedures that independently qualify as an ALS2 procedure and finalizing a policy to change the definition of ALS2 at Section 414.605 by including all prehospital blood tranfusions (PHBTs) in the list of procedures that independently qualify as an ALS2 procedure. Further, CMS is modifying the definition of ALS2 at Section 414.605 so that the list of ALS2 procedures now includes PHBT as a new No. 8, which includes the administration of low titer O+ and O- whole blood, the administration of PRBCs, the administration of plasma or the administration of a combination of PRBCs and plasma.

This change will go into effect January 2025.

Medicare Part A and B Payment for Dental Services

CMS finalized its proposal to codify certain policies to permit payment for certain dental services that are inextricably linked to other covered services (certain dental services for patients receiving dialysis services to treat ESRD).

CMS finalized addition of an additional clinical scenario to the examples of clinical scenarios under which payment can be made for certain dental services under Section 411.15(i)(3)(i)(A). Specifically, CMS finalized amending the regulation at paragraph A to include: "dental or oral examination performed as part of a comprehensive workup in either the inpatient or outpatient setting prior to Medicare-covered dialysis services when used in the treatment of ESRD; and medically necessary diagnostic and treatment services to eliminate an oral or dental infection prior to, or contemporaneously with Medicare-covered dialysis services when used in the treatment of ESRD."

CMS noted it will address comments in response to the request for feedback on furnishing oral devices used to treat obstructive sleep apnea, including CPAP devices in future rulemaking.

Expanding Colorectal Cancer Screening

CMS finalized updating and expanding coverage for colorectal cancer (CRC) screening to advance health equity by addressing health disparities. CMS believes computed tomography colonography (CTC) is reasonable and necessary as a CRC screening test, especially for those preferring a less invasive option than a screening colonoscopy. The goal is for patients and clinicians to make informed choices considering the risks and benefits of each test.

CAR-T Updates

CMS finalized the replacement of four Category III codes with new CPT codes (38225–38228) detailing the physician-performed steps of chimeric antigen receptor T-cell (CAR-T) therapy, with CMS accepting the RUC's recommended work RVUs for each.

Medicare Prescription Drug Inflation Rebate Program

Under the Inflation Reduction Act of 2022 (IRA), drug companies must pay inflation rebates if they raise prices for certain Part B and Part D drugs faster than the rate of inflation. CMS states that it is using rulemaking to modify the Inflation Rebate Program in 2025 because the IRA permits the implementation of the Medicare Part D Drug Inflation Rebate Program through program instruction or other forms of guidance only through 2024. CMS seeks to establish policies for both Part B and Part D inflation rebates in regulations.

In this rule, CMS proposes to codify policies previously established in guidance for the Medicare Prescription Part B Drug Inflation Rebate Program and Part D Inflation Rebate Revised Guidance. Unless otherwise specified, CMS finalized that the provisions with respect to Part B rebatable drugs would apply for all calendar quarters beginning with Jan. 1, 2023, and with respect to Part D rebatable drugs, for all applicable periods beginning with Oct. 1, 2022. CMS also finalized new policies.

Part B Inflation Rebates policies finalized by CMS include:

• CMS will compare payment amounts in the quarterly pricing files published by CMS to the inflation-adjusted payment amounts for the respective quarters to determine if the criteria for a coinsurance adjustment are met.
• For a Part B rebatable drug first approved or licensed by the FDA on or before Dec. 1, 2020, but first marketed after Dec. 1, 2020, the payment amount benchmark quarter will be the third full calendar quarter after the drug's first marketed date. For a Part B rebatable drug billed under a not otherwise classified (NOC) code during the calendar quarter starting July 1, 2021, or the third full calendar quarter after the drug's first marketed date, whichever is later, the payment amount benchmark quarter will be the third full calendar quarter following the assignment of a billing and payment code other than a NOC code.
• CMS will exclude 340B units from professional claims with dates of service in 2024 (and 2023) submitted by Medicare suppliers listed by the Health Resources and Services Administration (HRSA) 340B Office of Pharmacy Affairs Information System as participating in the 340B Program. This will be done by identifying these suppliers and their claims using National Provider Identifiers and/or Medicare Provider numbers. CMS previously planned to rely on modifiers for 2024 exclusions.
• CMS revised the definition "[r]efundable single-dose container or single-use package drug" to exclude units of refundable single-dose container or single-use package drugs subject to discarded drug refunds from the calculation of rebate amounts, generally during the reconciliation process.
• A reconciliation of rebate amounts must be performed within 12 months of sending Rebate Reports if CMS identifies any agency errors in calculation or manufacturer misreporting.
• Civil money penalties (CMPs) will be enforced on manufacturers that fail to pay rebate amounts equal to 125 percent of the rebate amount.

For Part D Inflation Rebates, CMS proposes to:

• For a Part D rebatable drug first approved or licensed by the FDA on or before Oct. 1, 2021, that lacks AMP data reported under section 1927(b)(3) of the Act for any quarters between Jan. 1, 2021, and Sept. 30, 2021, CMS will set the payment amount benchmark period as the first calendar year, starting no earlier than 2021, in which the drug has at least one quarter of average manufacturer price (AMP) reported.
• For a subsequently approved Part D rebatable drug (first approved or licensed after Oct. 1, 2021) without reported AMP data for any quarters in the first calendar year following its first marketed date, the payment amount benchmark period will be the first calendar year in which the drug has at least one quarter of AMP reported. CMS is also seeking comments on alternative policies for cases where AMP data is not reported for certain NDC-9s of a Part D rebatable drug.
• For claims with dates of service on or after Jan. 1, 2026, CMS will exclude from the total 36 units used to calculate the rebate amount for a Part D rebatable drug those units for which a manufacturer provided a discount under the 340B Program. CMS will determine these units using data reflecting the total number of such units dispensed during the applicable period and may apply adjustments as needed. After consideration of public comments, CMS is not finalizing the estimation methodology for the applicable period that begins on Oct. 1, 2025. Instead, CMS will continue to explore potential avenues to implement Section 1860D-14B(b)(1)(B) of the Social Security Act, which requires the exclusion from the total number of units for a Part D rebatable drug those units for which a manufacturer provides a discount under the 340B Program starting Jan. 1, 2026, through the establishment of a Medicare Part D claims data repository.
• Perform one reconciliation of rebate amounts within 12 months of sending Rebate Reports if CMS identifies any agency errors in calculation or manufacturer misreporting and a second reconciliation approximately 24 months thereafter.
• Enforce CMPs on manufacturers that fail to pay rebate amounts equal to 125 percent of the rebate amount.
• CMS also notes that if any provision of proposed Part 427 (Part B inflation rebates) or part 428 (Part D inflation rebates) were to be invalidated, they would be considered severable and the remaining sections would remain valid and enforceable.

Information contained in this alert is for the general education and knowledge of our readers. It is not designed to be, and should not be used as, the sole source of information when analyzing and resolving a legal problem, and it should not be substituted for legal advice, which relies on a specific factual analysis. Moreover, the laws of each jurisdiction are different and are constantly changing. This information is not intended to create, and receipt of it does not constitute, an attorney-client relationship. If you have specific questions regarding a particular fact situation, we urge you to consult the authors of this publication, your Holland & Knight representative or other competent legal counsel.