The Final Rule: 6 Key Areas of Compliance Focus
On Mar. 31, 2016, the Centers for Medicare and Medicaid Services (CMS) issued manufacturer release number 96 which provides manufacturers additional time to operationalize the provisions related to the 5i AMP calculation set forth by the Affordable Care Act (ACA) Final Rule.
CMS will begin enforcing the 5i provisions of the ACA Final Rule on Jul. 1, 2016. However, this doesn’t delay the effective date, which remains Apr. 1, 2016. Thus, manufacturers are still required to report a timely 5i AMP for April, May and June, using reasonable assumptions. Any manufacturers who opt to delay implementation will have to restate April, May, and June AMPs, if the implementation of the 5i provisions results in AMP values that differ from the initially reported values.
CMS states that they will issue an FAQ document and operational guidance based on questions they have received since the Final Rule’s publication. Huron is hopeful that the CMS FAQs will provide much needed clarity on operationalizing the 5i provisions. Some of the 70/30 test-related questions our clients are currently trying to answer are:
- Should we use direct and indirect sales or only direct sales data to conduct the 70/30 test?
- Should we include government sales in the sales that comprise the “non-retail” portion of the 70/30 test denominator? What other filters, if any, should be applied to the data going into the 70/30 calculation?
- Should we smooth? Are other manufacturers smoothing?
- If we choose to smooth, how many months of transactional data should be used in the calculation?
- How should we handle situations where the 70/30 test results in a switch of the AMP calculation methodology?
Manufacturers may want to take advantage of this extended transition period to submit additional questions to CMS. Additional questions may be sent directly to CMS at email@example.com.
Huron will continue to monitor activity related to the Final Rule and offer our insights into the ramifications for manufacturers. To receive Huron's updates to your inbox, subscribe to our email list.
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