Medicare and Medicaid Programs; CY 2026 Payment Policies Under the Physician Fee Schedule and Other Changes to Part B Payment and Coverage Policies; Medicare Shared Savings Program Requirements; and Medicare Prescription Drug Inflation Rebate Program

Under section 1848(q)(12)(A)(i) of the Act, we are required to provide MIPS eligible clinicians with timely confidential feedback on their performance under the quality and cost performance categories beginning July 1, 2017, and we have discretion to provide such feedback regarding the improvement activities and Promoting Interoperability performance categories. In the CY 2018 Quality Payment Program final rule, we finalized that on an annual basis, beginning July 1, 2018, performance feedback will be provided to MIPS eligible clinicians and groups for the quality and cost performance categories, and if technically feasible, for the improvement activities and advancing care information (now called the Promoting Interoperability) performance categories (82 FR 53799 through 53801).

We made performance feedback available for the CY 2019 performance period/2021 MIPS payment year on August 5, 2020; for the CY 2020 performance period/2022 MIPS payment year on August 2 and September 27, 2021; for the CY 2021 performance period/2023 MIPS payment year on August 22, 2022; for the CY 2022 performance period/2024 MIPS payment year on August 10, 2023; for the CY 2023 performance period/2025 MIPS payment year on August 12, 2024, and for the CY 2024 performance period/2026 MIPS payment year on September 9, 2025 We direct readers to qpp.cms.gov for more information. 4. Third Party Intermediaries General Requirements a. Requirements for CMS-Approved Survey Vendors (1) Background

The CAHPS for MIPS survey evaluates patients' experiences of care within a group, subgroup, virtual group, or Alternative Payment Model (APM) Entity. The CAHPS for MIPS survey must be administered by a CMS- approved survey vendor for the purposes of reporting (81 FR 28285). CMS-approved survey vendors must undergo the CMS approval process annually, which includes completing the Vendor Participation Form and complying with the Minimum Survey Vendor Business Requirements (81 FR 28288).

We have codified definitions of key terms for the Quality Payment Program, including third party intermediaries such as CMS-approved survey vendors, at Sec. 414.1305. First, we have defined a third-party intermediary as meaning an entity that CMS has approved at Sec. 414.1400 to submit data on behalf of a MIPS eligible clinician, group, virtual group, subgroup, or APM entity for one or more of the quality, improvement activities, and Promoting Interoperability performance categories. Then, we also defined a CMS-approved survey vendor as meaning a survey vendor that is approved by CMS for a particular performance period to administer the CAHPS for MIPS survey and to transmit survey measures data to CMS.

We refer readers to Sec. 414.1400, the CY 2017 Quality Payment Program final rule (81 FR 77386), the CY 2018 Quality Payment Program final rule (82 FR 53818 and 53819), the CY 2019 PFS final rule (83 FR 59907 and 59908), the CY 2022 PFS final rule (86 FR 65538 and 65539), and the CY 2025 PFS final rule (89 FR 98459 and 98460) for

previously finalized standards and criteria for third party intermediaries including CMS-approved survey vendors. (2) Codification of Two Previously Finalized Policies

In the CY 2025 PFS final rule, we finalized a policy to require CMS-approved survey vendors to submit a range of the cost of their services with their application beginning with the CY 2026 performance period/2028 MIPS payment year (89 FR 98459 and 98460). While this policy was finalized as proposed in the CY 2025 PFS final rule, it was not codified in regulations governing third party intermediaries. To ensure program requirements are clear, in the CY 2026 PFS proposed rule, we proposed to codify this previously finalized policy at Sec. 414.1400(d)(9), with a technical modification to indicate that this requirement begins on January 1, 2026, rather than with the CY 2026 performance period/2028 MIPS payment year (90 FR 32768). We specifically proposed to codify at Sec. 414.1400(d)(9) to provide that, beginning with January 1, 2026, the entity seeking to be a CMS- approved survey vendor must include on its application the range of costs of its third-party intermediary services (90 FR 32768).

In the CY 2024 PFS final rule, we finalized a policy to require organizations to contract with a CMS-approved survey vendor that would administer the CAHPS for MIPS Survey in the Spanish language translation to Spanish-preferring patients using the procedures detailed in the CAHPS for MIPS Quality Assurance Guidelines (88 FR 79332 through 79334). While this policy was finalized as proposed in the CY 2024 PFS final rule, it was not codified in regulations governing third party intermediaries. To ensure program requirements are clear, we proposed to codify this previously finalized provision at Sec. 414.1400(d)(3)(iv)(A), with technical modifications to refer more broadly to sub-regulatory guidance that details procedures for administering the CAHPS for MIPS Survey. Specifically, we proposed to codify at Sec. 414.1400(d)(3)(iv)(A) to provide that, beginning on January 1, 2024, in addition to administering the survey in English, entities will administer the Spanish survey translation to Spanish- preferring patients using the procedures detailed in sub-regulatory guidance to standardize the CAHPS data collection process for MIPS and to make sure the survey data collected across survey vendors are comparable within the program or model (90 FR 32768).

We received public comments on these proposals to codify at Sec. 414.1400(d)(9) to provide that, beginning with January 1, 2026, the entity seeking to be a CMS-approved survey vendor must include on its application the range of costs of its third party intermediary services and to codify at Sec. 414.1400(d)(3)(iv)(A) to provide that, beginning on January 1, 2024, in addition to administering the survey in English, entities will administer the Spanish survey translation to Spanish- preferring patients. The following is a summary of the comments we received and our responses.

Comment: A few commenters noted their support for codifying CMS' previously finalized policy to require an entity to administer the CAHPS for MIPS Survey Spanish translation to Spanish-preferring patients.

Response: We thank commenters for their support.

Comment: A few commenters noted their support for codifying CMS' previously finalized proposal to require CMS-approved survey vendors to submit a range of the cost of their services with their application.

Response: We thank commenters for their support.

After consideration of public comments, we are finalizing as proposed to codify at Sec. 414.1400(d)(9) to provide that, beginning with January 1, 2026, the entity seeking to be a CMS-approved survey vendor must include on its application the range of costs of its third party intermediary services and to codify at Sec. 414.1400(d)(3)(iv)(A) to provide that, beginning on January 1, 2024, in addition to administering the survey in English, entities must administer the Spanish survey translation to Spanish-preferring patients. (3) Technical Changes

While reviewing the regulations for CMS-approved survey vendors, we identified an area in which language was used to describe survey protocols that is no longer consistent with current practice. In the CY 2026 PFS proposed rule (90 FR 32768) we proposed to modify Sec. 414.1400(d)(3)(i) by removing the reference to `mixed -modes' to better align with language typically used in current practice. Specifically, we proposed to modify Sec. 414.1400(d)(3)(i) to provide that an entity must have at least 3 years of experience administering surveys in which mail survey administration is followed by survey administration via Computer Assisted Telephone Interview (CATI) (90 FR 32768). We noted that this terminology change does not reflect a change in requirements for CMS-approved survey vendors.

We solicited public comments on this proposal to make a technical change to the regulation text at Sec. 414.1400(d)(3)(i).

We did not receive public comments on this provision, and therefore, we are finalizing the technical change to the regulation text at Sec. 414.1400(d)(3)(i) as proposed. (4) CAHPS for MIPS Survey

For the MIPS quality performance category, the CAHPS for MIPS Survey measures patients' experience of care and is administered first through the mail and then by phone interview with non-respondents. The survey is administered in English and Spanish, with additional translations available. The CAHPS for MIPS Survey may only be administered by CMS-approved survey vendors. (81 FR 77116). More details on the CAHPS for MIPS survey can be found here: https://www.cms.gov/data-research/research/consumer-assessment-healthcare-providers-systems/cahps-mips. (5) Requirement for Web-Mail-Phone Protocol for Administration of the CAHPS for MIPS Survey

In the CY 2025 PFS proposed rule (89 FR 61869, 62042, and 62043), we included a request for information (RFI) on the potential expansion of the survey modes of the CAHPS for MIPS Survey from a mail-phone protocol to a web-mail-phone protocol. We solicited public comments on this new protocol given positive results found from our 2023 CAHPS for MIPS Web Mode Field Test.\470\

\470\ Centers for Medicare & Medicaid Services. (June 2024). 2023 CAHPS for MIPS Web Mode Field Test. Available at https://qpp-cm-prod-content.s3.amazonaws.com/uploads/2893/2023_CAHPS_for_MIPS_WebMode_Field_Test.pdf.

The field test added the web-based survey mode to the current mail- phone protocol of CAHPS for MIPS survey administration, and we found that the addition resulted in a 43 percent response rate compared to 28 percent for the mail-phone protocol from the CY 2022 performance period CAHPS for MIPS Survey (89 FR 62043). In the CY 2025 proposed rule, we outlined details of the field test, including that surveys were administered to a random sample of survey-eligible patients from 20 Medicare Shared Savings Program ACOs between March 6, 2023, and May 31, 2023. These results were compared to survey data collected from the CY 2022 performance period CAHPS for MIPS

Survey for the same Medicare Shared Savings Program ACOs.

Although comments in response to the RFI were not included in the 2025 PFS final rule, commenters widely supported an expansion of CAHPS for MIPS survey modes to include a web-based survey protocol, emphasizing that this could help increase response rates. A commenter noted that this is a long overdue update. The CAHPS for MIPS Survey RFI received input from 16 commenters, including medical societies, professional trade associations, Accountable Care Organizations, health care systems, an academic/research institution, and a consumer/patient advocacy organization. Key commenter takeaways included encouraging CMS to:

Expand the CAHPS for MIPS survey modes to include a web- based option.

Examine and implement additional changes to improve response rates and reduce burden associated with CAHPS surveys.

Create additional approaches to assess and reduce any increased costs of survey administration for health care practices.

Consider the potential impacts of sharing email addresses with vendors on patient privacy and administration burden.

The field test showed an increase in the survey response rate due to the addition of the web-based survey protocol which may lead to more groups meeting case minimum requirements for CAHPS. Additionally, adding a web survey mode increased flexibility for survey respondents, and commenters responded positively to the addition of a web-based survey protocol.

On these bases, in the CY 2026 PFS proposed rule we proposed to require that, beginning with the CY 2027 performance period/2029 MIPS payment year, CMS-approved survey vendors would have to administer the CAHPS for MIPS Survey via a web-mail-phone protocol. We propose to codify this requirement at Sec. 414.1400(d)(10) (90 FR 32678 through 32769).

In addition, we proposed to codify new requirements at Sec. Sec. 414.1400(d)(3)(v)(A), 414.1400(d)(3)(vi)(A), and 414.1400(d)(3)(vii) to ensure an entity applying to become a CMS-approved survey vendor is capable of administering a web-mail-phone protocol prior to CMS approval (90 FR 32769). We noted that, currently, an entity must apply to be a CMS-approved vendor on an annual basis, demonstrating they meet applicable requirements at Sec. 414.1400. We proposed to modify our requirements at Sec. 414.1400(d)(3) to ensure an entity is prepared to administer the web-mail-phone protocol prior to CMS approval. Specifically, we proposed that, beginning January 1, 2027, to be a CMS- approved survey vendor an entity must have sufficient experience, capability, and capacity to accurately report CAHPS data by demonstrating that they (1) use equipment, software, computer programs, systems, and facilities that can send survey invitations via email that include a patient-specific hyperlink to a web survey, collect data via web, and track cases from web surveys through telephone follow-up activities (Sec. 414.1400(d)(3)(v)(A)); (2) employ a web survey administrator (Sec. 414.1400(d)(3)(vi)(A)); and (3) have at least 3 years of experience administering surveys in which web survey administration is followed by survey administration via mail survey or Computer Assisted Telephone Interview (CATI) (Sec. 414.1400(d)(3)(vii)) (90 FR 32769).

As finalized, CMS will update the survey administration requirements and associated materials, including the survey vendor application, during the 1-year implementation delay. We note that entities seeking to, or that do, become a CMS-approved survey vendor would need to meet other applicable requirements at Sec. 414.1400, including successfully completing CMS' vendor training(s) as provided at Sec. 414.1400(d)(5).

We refer readers to section V.B.5.b. of this final rule for discussion on the burden estimates for this proposal.

We received public comments on this proposal to require that, beginning with the CY 2027 performance period/2029 MIPS payment year, CMS-approved survey vendors would have to administer the CAHPS for MIPS Survey via a web-mail-phone protocol. The following is a summary of the comments we received and our responses.

Comment: Several commenters noted their support for CMS' proposal to require that CMS-approved survey vendors would have to administer the CAHPS for MIPS Survey via a web-mail-phone protocol. Many commenters stated their belief that this policy will have positive impacts from the increased survey response rates. Specifically, commenters shared their beliefs that this policy would: allow more patient voices to be heard; improve the quality and usefulness of the survey; modernize patient engagement; allow physician practices the flexibility to administer the survey in the best possible manner for their patients; and reduce burden on patients. A commenter also encouraged CMS to preserve this multimode design as it modernizes CAHPS survey administration to preserve accessibility, particularly for beneficiaries who may have limited internet access or digital literacy.

Response: We thank commenters for their support.

Comment: A commenter believes that to further enhance accessibility and response rates, CMS should consider adding Short Message Service (SMS) text messaging as an additional modality for survey administration.

Response: We thank the commenter for the response, and we will take this suggestion into consideration if we plan to include additional survey modes in future years. We note that any future additional requirements for the administration of the CAHPS for MIPS Survey will be proposed and finalized through future rulemaking.

Comment: A few commenters expressed their concern that the proposed policy will increase the cost of administering the survey. A commenter urged CMS to assess and disclose the cost implications for medical practices, noting their belief that implementing a three mode protocol may introduce new financial and operational burdens, particularly for small and rural practices. This commenter also stated their belief that CMS should cover the costs of survey administration to avoid shifting financial responsibility onto physician practices.

A few commenters expressed concern about the burden for clinicians. Specifically, a commenter recommended that CMS ensure this policy is implemented in a way that minimizes burden for clinicians and survey vendors. Another commenter encouraged CMS to refine the various CAHPS surveys to remove duplication across programs and reduce burden for clinicians.

Response: We recognize the commenter's concern about the potential for additional cost burden of the web-mail-phone protocol to organizations fielding the CAHPS for MIPS survey, though CMS does not estimate the costs associated with a MIPS eligible clinician's vendor support. We believe any additional costs incurred by the web-mail-phone protocol are outweighed by the potential benefits, as field tests found that the addition of the web mode resulted in a 43 percent response rate compared to 28 percent for the mail-phone protocol from the CY 2022 performance period CAHPS for MIPS Survey (89 FR 62043). The initial field test demonstrates that adding the web mode promotes better response rates by enabling more patients

to participate in the survey and increasing flexibility for practices and survey respondents. We also note that we do not consider requiring CAHPS survey administration across programs to be duplicative. Collecting CAHPS survey data for different quality programs ensures that patient experience data is collected across the services and appropriate for the care measured by each program. The surveys focus on matters that patients report are important to them and for they are the best and/or only source of information. It is our goal to capture this data across care settings (for example, hospitals, clinics, long-term care).

Comment: A few commenters believe that the web administration of the CAHPS for MIPS survey should remain optional. A commenter stated their belief that practices should have the ability to determine what survey mode (that is, web, phone, or mail) is most appropriate for their patient population.

Response: The addition of web administration will provide another option for survey respondents to participate in the CAHPS for MIPS Survey. We are prioritizing this flexibility in participation options for survey respondents as initial field tests indicate that our proposed policy to require CMS-approved survey vendors to administer the survey via a web-mail-phone protocol may increase participation in the survey to survey respondents. The 2023 CAHPS for MIPS Web Mode Field Test showed a 15-percentage point increase in the survey response rate due to the addition of the web-based survey protocol, indicating that a subset of patients prefer the web mode. We believe that patients should be given the opportunity to choose their preference between web, phone, or mail response options.

Comment: A commenter expressed concern that clinicians have difficulty obtaining a sufficient number of survey responses to ensure reliability and validity. This commenter urged CMS to continue to monitor and address this issue, particularly as survey modalities evolve. The commenter also urged CMS to avoid requiring practices to provide patient email addresses.

Response: We note that, as discussed previously in this section of the final rule, the 2023 CAHPS for MIPS Web Mode Field Test added the web-based survey mode to the current mail-phone protocol of CAHPS for MIPS survey administration, and found that the addition resulted in a 43 percent response rate compared to 28 percent for the mail-phone protocol from the CY 2022 performance period CAHPS for MIPS Survey (89 FR 62043). As such, we believe that adding the web-based survey mode will increase response rates, which may lead to more groups meeting case minimum requirements for CAHPS and strengthen the reliability and validity of the CAHPS for MIPS Survey measure. Additionally, electing to share patient email addresses with CMS-approved survey vendors is one action a practice can, but is not required to take to promote survey participation and response, just like sharing patient phone numbers or preferred language.

After consideration of public comments, we are finalizing our proposal to require that, beginning with the CY 2027 performance period/2029 MIPS payment year, CMS-approved survey vendors would have to administer the CAHPS for MIPS Survey via a web-mail-phone protocol and to codify this requirement at Sec. 414.1400(d)(10) as proposed. (6) Sunsetting Application Requirement at Sec. 414.1400(d)(8)

In the CY 2026 PFS proposed rule, we proposed to modify Sec. 414.1400(d)(8) to sunset its requirement that, to apply to become a CMS-approved survey vendor, the entity must send an interim survey data file to CMS that establishes the entity's ability to accurately report CAHPS data (90 FR 32769). Though this requirement was established to ensure accurate reporting, it is ultimately not feasible to implement because an entity cannot collect data until it is approved by CMS, and thus, the entity does not have any data to send to CMS prior to approval. Therefore, submission of a survey data file has not been used as a requirement for approval. We proposed to sunset the requirement at Sec. 414.1400(d)(8) so it is only effective from January 1, 2019 (when it was first finalized in the CY 2019 PFS final rule) through December 31, 2025. We proposed that this requirement would no longer be in effect beginning January 1, 2026.

We did not receive public comments on this provision, and therefore, we are finalizing our proposal to sunset the requirement at Sec. 414.1400(d)(8) as proposed. 5. Advanced APMs a. Overview

The Quality Payment Program provides incentives for eligible clinicians to engage in value-based, patient-centered care under Medicare Part B via MIPS and Advanced APMs. The structure of the Quality Payment Program enables us to advance accountability and encourage improvements in care. Our vision for increased clinician participation in Advanced APMs is aimed at integrating individuals' clinical needs across a spectrum of providers and settings to improve patient care and population health. As we continue to make improvements to the Quality Payment Program, we seek to develop, propose, and implement policies that encourage broad and meaningful clinician participation, including by specialists, in Advanced APMs.

In the CY 2025 PFS final rule (89 FR 98463 and 98464), we anticipated that we would propose a comprehensive approach to QP determination in future rulemaking (89 FR 98464). In the CY 2026 PFS proposed rule (90 FR 32593 through 32597), we proposed such a comprehensive approach, which includes two parts. First, we proposed adding an individual level calculation to Qualifying APM Participant (QP) determinations, as set forth in proposed Sec. 414.1425(b)(3 and (c)(3), for all eligible clinicians participating in an Advanced APM, such that each eligible clinician would receive both APM Entity level calculation and an individual level calculation. Second, we re-proposed to expand the scope of the services in the sixth criterion of the definition of “attribution-eligible beneficiary” at Sec. 414.1305 to use covered professional services (section 1848(k)(3)(A) of the Act). In the proposed rule we explained that CMS expected that, together, these proposals would modernize and improve the QP determination approach across Advanced APMs.

In addition to the previous proposals, we further proposed to sunset our Advanced APM criterion at Sec. 414.1415(c)(7), which currently limits Medical Home Model participants to 50 clinicians.

Lastly, we proposed modifying Sec. 414.1455(a)(b)(3)(ii) and (b)(3)(vi) pertaining to the QP Targeted Review process to align with MIPS Targeted Review process set forth at Sec. 414.1385 to ensure that the QP and MIPS Targeted Reviews occur concurrently. b. QP Determinations (1) General

In the CY 2017 Quality Payment Program final rule (81 FR 77439 through 77445), we finalized our policy for QP determinations at Sec. 414.1425. Currently, Sec. 414.1425(b)(1) provides that, for the purposes of making QP determinations, an eligible clinician must be present on the Participation List of an APM Entity in an Advanced APM on one of the “snapshot dates” (March 31, June 30, or August 31) for the QP Performance Period. An eligible clinician included

on a Participation List on any such snapshot date is included in the APM Entity group even if that eligible clinician is not included on that Participation List at one of the prior- or later-listed dates. We perform QP determinations for eligible clinicians in an APM Entity group three times during the QP Performance Period using claims data for services furnished from January 1 through each of the respective QP determination snapshot dates. An eligible clinician can be determined to be a QP only if the eligible clinician appears on the Participation List on a snapshot date that we use to determine the APM Entity group and to make QP determinations at the APM Entity group level based on participation in the Advanced APM. For eligible clinicians who appear on a Participation List for more than one APM Entity, but who do not achieve QP status based on any APM Entity-level determinations, we make QP determinations at the individual level as described at Sec. 414.1425(c)(4). Likewise, for eligible clinicians on an Affiliated Practitioner list for an Advanced APM, we make QP determinations at the individual-level three times during the QP Performance Period using claims data for services furnished from January 1 through each of the respective QP determination snapshot dates as described at Sec. 414.1425(b)(2).

In the CY 2017 Quality Payment Program final rule (81 FR 77433 through 77440) we established a process to calculate Partial QP status at Sec. 414.1425(d). While to date our Partial QP policies have impacted only a small number of eligible clinicians, and thus we have not focused our discussion on this specific policy, we note that any changes to QP determinations at Sec. 414.1425 also would likely require conforming changes to the policies for Partial QPs for consistency across the program.

In the CY 2017 Quality Payment Program final rule (81 FR 77450 through 77457), we finalized the payment amount method and patient count method for calculation of Threshold Scores used for QP determinations under the Medicare option and codified these methods at Sec. 414.1435(a) and (b), respectively. The payment amount method is based on payments for Medicare Part B covered professional services, including certain supplemental service payments, while the patient count method is based on numbers of patients. Both methods use the ratio of “Attributed beneficiaries” to “Attribution-eligible beneficiaries,” as these terms are defined at Sec. 414.1305, as shown in Figure CN1. [GRAPHIC] [TIFF OMITTED] TR05NO25.153

Regulation at Sec. 414.1435(d) provide that if the Threshold Score (using either the payment amount or patient count method) calculated at the APM Entity or individual eligible clinician level, as applicable, meets or exceeds the relevant QP threshold described at Sec. 414.1430(a), the relevant eligible clinician or clinicians (either the individual eligible clinician or all those on the APM Entity's Participation List) achieve QP status for such year.

Regulation at Sec. 414.1435(b)(3) provides that a beneficiary may be counted only once in the numerator and denominator for a single APM Entity group, and at Sec. 414.1435(b)(4) provides that a beneficiary may be counted multiple times in the numerator and denominator for multiple different APM Entity groups. In the CY 2021 PFS final rule (85 FR 84951 through 84952), we amended Sec. 414.1435(c)(1)(i) to specify that beneficiaries who have been prospectively attributed to an APM Entity for a QP Performance Period are excluded from the attribution- eligible beneficiary count for any other APM Entity that is participating in an APM where that beneficiary would be ineligible to be added to the APM Entity's attributed beneficiary list.

An attributed beneficiary is a beneficiary attributed to the APM Entity under the terms of the Advanced APM as indicated on the most recent available list of attributed beneficiaries at the time of a QP determination. There may be beneficiaries on the most recent available list who do not meet the criteria to be attribution-eligible beneficiaries because the QP performance period does not align with the Advanced APM's performance period or attribution period, or for other reasons. There may also be cases where a beneficiary's status changes, for example by enrolling in a Medicare Advantage Plan. As described in the CY 2017 Quality Payment Program final rule (81 FR 77451), attributed beneficiaries are a subset of attribution-eligible beneficiaries. Therefore, when calculating Threshold Scores for QP determinations, we exclude from the list of attributed beneficiaries any beneficiaries who do not meet the criteria to be attribution- eligible beneficiaries at that point in time. (2) Individual QP Determination

When we initially established our policy in the CY 2017 Quality Payment Program final rule (81 FR 77439 through 77445) to make most QP determinations at the APM Entity level, we believed it was the best approach at the time. However, we did not intend for the policy to create potentially conflicting incentives for an APM Entity between the goal for its eligible clinicians to achieve QP status under the Quality Payment Program and the goals of the Advanced APM(s) in which the APM Entity participates.

In the CY 2024 proposed rule (88 FR 52618), we proposed to address this issue by conducting all QP determinations at the individual level. However, commenters opposed that proposal, citing issues such as administrative burden for APM Entities tracking QP status and Partial QP status and elections at the individual level because of the implications for MIPS reporting. Many further believed that the change may have negative consequences for specialists, the opposite of our intent in making our proposal. In light of the comments received, we did not finalize our proposal from the CY 2024 proposed rule (88 FR 79403). Since that time, we have continued to examine QP determinations with a desire to right-size the methodology to current and future Advanced APM design, remove barriers to participation, and conduct calculations fairly.

Some commenters on our CY 2024 proposal recommended that we conduct QP determinations at both the APM

Entity and individual levels (88 FR 79403). At the time, we indicated that we did not believe that this approach would sufficiently encourage more intensive Advanced APM participation by individual eligible clinicians. However, based on continued examination of QP determinations, including in the time since the publishing of the CY 2025 PFS final rule, we have recognized the importance of individual contribution, particularly for models that are condition-specific or focused on an episode of care. Clinicians in these models are particularly disadvantaged when, as is frequently the case, their APM Entity fails to achieve QP status.

Under our current policy, there is the potential that an eligible clinician who has fully engaged with an Advanced APM may still be unable to earn QP status because it is calculated at the APM Entity level as described at Sec. 414.1425(c)(3). As we previously noted, under our current policy we conduct individual determinations, but we only do so in the following specific circumstances: (1) for eligible clinicians who appear on a Participation List for more than one APM Entity, but who do not to achieve QP status based on any APM Entity- level determinations, we make QP determinations at the individual level as described at Sec. 414.1425(c)(4), (2) for eligible clinicians on an Affiliated Practitioner list for an Advanced APM, we make QP determinations at the individual-level three times during the QP Performance Period using claims data for services furnished from January 1 through each of the respective QP determination snapshot dates as described at Sec. 414.1425(b)(2). While these methods exist, individual calculations are not the norm, and for an eligible clinician in only one APM Entity our current policy does not provide for an individual determination.

As such, we proposed adding a new provision at Sec. 414.1425(b)(3) to add a QP determination at the individual level for all Advanced APM participants, beginning with the 2026 QP Performance Period. As we explained in the CY 2026 proposed rule (90 FR 32593), this proposal would not impact our policy at Sec. 414.1425(b)(1) for APM Entity - level determinations or our policy at Sec. 414.1425(b)(2) determinations for Affiliated Practitioners as these policies also would remain in effect for 2026 and future QP Performance Periods. We proposed amending at Sec. 414.1425(b)(3) to add a calculation of Threshold Scores for QP determinations at the individual level for each unique NPI associated with an eligible clinician participating in an Advanced APM based on services furnished across all Tax Identification Numbers (TINs) to which the eligible clinician has reassigned their billing rights. This individual Threshold Score would provide a more specific measurement of each eligible clinician's participation in an Advanced APM. We proposed that we would calculate at the APM Entity- level as provided at Sec. 414.1425(b)(1) and (2) and the individual level for each eligible clinician as provided at Sec. 414.1425(b)(3) at each of the snapshot dates throughout the QP Performance Period. We also proposed that, an eligible clinician is a QP for a year under the Medicare option if, as described at Sec. 414.1435(d), they meet or exceed the QP payment amount threshold or QP patient count threshold, as described at Sec. 414.1430(a)(1) and (3), for that QP Performance Period, at the APM Entity-level, or as an individual eligible clinician as stated at Sec. 414.1425(c)(3) or (c)(4) respectively.

We proposed to amend Sec. 414.1425(c)(3) by adding a new (c)(3)(ii) and making conforming revisions at Sec. [thinsp]414.1425(c)(3)(i) and (4) to ensure that an eligible clinician is a QP for a year under the Medicare Option if beginning with the CY 2026 QP Performance Period, the eligible clinician individually, or as part of an APM Entity group, achieves a Threshold Score that meets or exceeds the corresponding QP payment amount threshold or QP patient count threshold for that QP Performance Period as described at Sec. 414.1430(a)(1) and (3). Likewise, an eligible clinician is a QP for the year under the All-Payer Combination Option if the eligible clinician individually, or as part of an APM Entity group, achieves a Threshold Score that meets or exceeds the corresponding QP payment amount threshold or QP patient count threshold for that QP Performance Period as described at Sec. 414.1430(b)(1) and (3).

We proposed a conforming revision to sunset at Sec. 414.1425(c)(4) to clarify that the existing policy started with the CY 2017 QP Performance Period and would end with the CY 2025 QP Performance Period, and to preserve in the regulations the history of the applicable policies for specific QP Performance Periods.

We proposed a revision at Sec. 414.1425(d)(1) and (2) such that an eligible clinician is a partial QP for a year under the Medicare option if they meet or exceed the corresponding Partial QP payment amount threshold or Partial QP patient count threshold for that QP Performance Period as described at Sec. 414.1430(a)(2) and (4) at the APM Entity- level or as an individual eligible clinician as stated at Sec. Sec. 414.1425(d)(1) or (d)(2) respectively. The following is a summary of the comments we received and our responses.

Comment: Many commenters supported our proposal to add an individual-level QP determination beginning in the 2026 QP Performance Period. These commenters emphasized that the inclusion reflects clinician engagement and ensures fairness across specialties and noted that this change would prevent clinicians from being disadvantaged when their APM Entity does not meet thresholds.

Response: We agree with commentors that adding an individual-level QP determination will improve fairness, particularly for specialists and clinicians in condition-specific or episode-based models. This policy will help to ensure that individual contributions to Advanced APMs are recognized, even when the APM Entity does not, as a whole, achieve QP status.

Comment: Some commenters cautioned that implementing individual- level QP determinations could increase administrative complexity. The commenters expressed concern that tracking QP status and Partial QP status at the individual level across multiple snapshots throughout the QP performance period would add a burdensome process.

Response: We appreciate the comments and recognize that this policy will increase the number of clinicians and organizations tracking individual calculations. We are committed to aligning our QP determination process as much as is practicable with existing QPP reporting requirements. As such, in part to minimize the burden of tracking QP status at multiple points within the QP performance period, we will be providing individual QP determination calculations for all three snapshots when we deliver the third snapshot feedback at the end of the QP performance period. That way, rather than needing to track individual QP status throughout the QP performance period, clinicians can simply check when the third snapshot feedback is released and receive their final individual QP determination result. This operational approach is consistent with how we have delivered individual QP determination feedback in the specialized situations under which we currently perform individual-level QP determinations. Moreover, in waiting to perform the individual-level calculations until after the third snapshot, we are able to take into account any APM Entities that were

terminated from their Advanced APM participation after the first, second, or third snapshot, which is an action that can result in the loss of previously attained QP status at Sec. 414.1425(c)(5) and (6) and could result in the eligible clinician being subject to MIPS. Rather than recalculate individual determinations based on such terminations, which both are inefficient operationally and have potential to confuse eligible clinicians and cause them to misunderstand their MIPS obligations, we can perform calculations for all three QP snapshot periods based on the most up-to-date participation as of the third snapshot and provide only the final answer to the relevant clinicians. Because this approach simply continues how we already perform and release both APM Entity-level and individual-level QP calculations, clinicians and practice representatives will be able to continue engaging with QPP as they always have, with APM Entity-level determinations being performed and released at each snapshot and individual-level determinations being performed and released at the third snapshot. We believe this approach will continue to maximize efficiency and transparency and reduce confusion for and administrative burden on eligible clinicians. We will continue to monitor and provide updates regarding the QP determination process where we believe there are necessary improvements.

After consideration of public comments, we are finalizing our policy to add an individual QP determination for all eligible clinicians as proposed. (3) Attribution-Eligible Definition

At Sec. 414.1305, we define an attribution-eligible beneficiary as a beneficiary who--

Is not enrolled in Medicare Advantage or a Medicare cost plan;

Does not have Medicare as a secondary payer;

Is enrolled in both Medicare Parts A and B;

Is at least 18 years of age;

Is a United States resident; and

Has a minimum of one claim for E/M services furnished by an eligible clinician who is in the APM Entity for any period during the QP Performance Period or, for an Advanced APM that does not base beneficiary attribution on E/M services and for which attributed beneficiaries are not a subset of the attribution-eligible beneficiary population based on the requirement to have at least one claim for E/M services furnished by an eligible clinician who is in the APM Entity for any period during the QP Performance Period, the attribution basis determined by CMS based upon the methodology the Advanced APM uses for attribution, which may include a combination of E/M and other services.

When we finalized the definition of attribution-eligible beneficiary in the CY 2017 Quality Payment Program final rule, (81 FR 77451 through 77452), we intended that this definition would, for purposes of QP determinations, allow us to be consistent across Advanced APMs in how we consider the population of beneficiaries served by an APM Entity. The criteria we used to define attribution-eligible beneficiary were aligned with the attribution methodologies and rules for our contemporaneous Advanced APMs. The first five criteria are conditions that are required for a beneficiary to be attributed to any Advanced APM. The sixth criterion identifies beneficiaries who have received certain services from an eligible clinician who is associated with an APM Entity for any period during the QP Performance Period. We chose to refer to E/M services as the primary basis for purposes of attribution-eligibility because many of the Advanced APMs CMS offered at that time used E/M claims to attribute beneficiaries to their APM Entity groups. Over time, we have updated the list of services that are considered to be E/M services for purposes of identifying attribution- eligible beneficiaries and have published this list as part of the “2024 Learning Resources for QP Status and APM Incentive Payment” materials on the Quality Payment Program Resource Library at qpp.cms.gov.

We also included an exception in this sixth criterion to allow us to use an alternative approach for Advanced APMs that do not base beneficiary attribution on any E/M services, and thus for which attributed beneficiaries are not a subset of the attribution-eligible beneficiary population based on the requirement to have at least one claim for an E/M service. To date, we have implemented this alternative approach for four Advanced APMs:

Bundled Payments for Care Improvement Advanced Model.

Comprehensive Care for Joint Replacement Payment Model (CEHRT Track).

Comprehensive ESRD Care Model (LDO arrangement and Non LDO Two-Sided Risk Arrangement).

Maryland Total Cost of Care Model (Care Redesign Program).

We have published links to the methodologies we use to identify attribution-eligible beneficiaries for these Advanced APMs in the “2024 Learning Resources for QP Status and APM Incentive Payment” materials on the Quality Payment Program Resource Library at qpp.cms.gov.

We adopted the general rule with flexibility to apply alternative methods for this criterion to ensure that, for the Advanced APMs for which beneficiary attribution is based on services other than E/M services, the attributed beneficiary population is truly a subset of the Advanced APMs' attribution-eligible beneficiary populations and, ultimately, so that our way of identifying beneficiaries for purposes of Threshold Score calculations for QP determinations would be appropriate for such Advanced APMs. That said, our thought when we developed these approaches was shaped by the form and nature of the Advanced APMs that existed at that time. We believed that, by affording sufficient flexibility within the program, we could both foster innovation in Advanced APMs and simplify our execution of the program. However, with our more narrowly defined default approach to beneficiary attribution (relying on claims for E/M services), we have increasingly needed to exercise the flexibility to identify an alternative approach to attribution eligibility for Advanced APMs that fell into the exception, which meant that we identified several individually tailored ways of performing the beneficiary attribution methodology for specific Advanced APMs. We anticipate that Advanced APMs will continue to evolve and use novel approaches to value-based care that may emphasize a broad range of covered professional services, and in that event the application of our current regulations may result in increased variability among the ways we define attribution-eligible beneficiary when making QP determinations. In the CY 2025 PFS proposed rule (89 FR 62098 through 62101), we proposed to amend the final criterion in the definition of “attribution-eligible beneficiary” at Sec. 414.1305 to expand the scope of services used to covered professional services, indicating that we would conduct further analysis. However, as further discussed in the CY 2025 PFS final rule (89 FR 98461 through 98465), we did not finalize this proposal.

After continued examination, in the CY 2026 PFS proposed rule, we re-proposed to modify the sixth criterion of the definition of “attribution-eligible beneficiary” at Sec. 414.1305 to include any beneficiary who has received a covered professional service furnished by the eligible clinician for whom we are making the QP determination, beginning with the 2026 QP Performance Period. In the CY2026 PFS

proposed rule, we referred to the description of this proposed approach that CMS previously provided in the CY 2025 proposed rule, namely, that this policy, if finalized, would result in a QP calculation that, by including beneficiaries receiving any covered professional service, more accurately reflect eligible clinicians' actual participation in Advanced APMs, improve transparency and predictability of the determinations, be more operationally efficient than the current policy, and better align the QP determination methodology with the universe of services to which the Quality Payment Program (including MIPS and APMs) applies.

In response to comments in the CY 2025 PFS final rule, we explained that changes in the composition of APM Entity Participation Lists, services furnished, and attributed beneficiaries all have significant effects on the number of projected versus actual QPs for a QP performance period, which complicates the ability to assess effects of methodological changes to QP determinations (89 FR 98461 through 98465). We also described how any methodology changes can lead to varied QP Threshold Scores for APM Entities within the same Advanced APM, and noted that because QP status is determined based on specific QP payment amount and QP patient count thresholds, only those changes in scores that result in an eligible clinician crossing over a QP threshold percentage contribute to the net estimated change in QP counts (89 FR 98461 through 98465). In the CY 2026 PFS proposed rule, we also noted that the QP thresholds have increased relative to previous years and, effective with the 2025 QP Performance Period are now at 75 percent for the payment amount and 50 percent for the patient count. We noted that this change, which occurs by statute, will be responsible for the largest quantitative effect on our QP predictions, largely by reducing the number of QPs relative to the previous, lower thresholds. As such, while the quantitative effects of our proposals may show small changes in the number of QPs relative to the status quo, that status quo itself reflects this threshold level change to QP determinations, which is significant in its own right.

In the CY 2025 PFS final rule (89 FR 98463 and 98464), we stated that we believed that our proposal was a better approach than the status quo, and we believed that it should likely be part of a comprehensive approach to QP determinations that would better reflect the current and future state of Advanced APMs. In response to public comments, we did not finalize at that time the proposal to revise the sixth criterion of the definition of “attribution-eligible beneficiary at Sec. 414.1305. However, at the time we stated that we anticipated to propose a comprehensive approach to QP determination in future rulemaking, including a strategy to address the needs of condition- specific models, and that this proposal might be included as one element of such future proposals (89 FR 98463 and 98464). We have further explored this issue and have determined that we could appropriately address the challenges we have described in this and prior rulemaking by allowing for the overall expansion of the QP determinations, in terms of both the level of determination as discussed in section XX.XX.x.(2). of this final rule, and the services included in the QP determinations as discussed in this section of the rule.

As we previously noted in this final rule, in our discussion of the proposal to calculate QP status at the individual NPI level, primary care practitioners generally furnish a higher proportion of E/M services than do specialists with the same beneficiary, and as for the Threshold Score calculations described previously, the emphasis on E/M services in our beneficiary attribution policy may have inadvertently encouraged APM Entities to exclude specialists from their Participation Lists. Under our current policy, if one or more eligible clinicians on the APM Entity's Participation List furnish covered professional services to a beneficiary but none of those services are among the E/M services we use for attribution, that beneficiary would not be attribution-eligible, and therefore, would not be included in our QP determination calculation, even though the beneficiary is actually receiving covered professional services from an eligible clinician on the APM Entity's Participation List.

We proposed to change the definition of “attribution-eligible beneficiary” at Sec. 414.1305 so that, beginning with QP Performance Period 2026, a single definition using covered professional services would be applied regardless of the Advanced APMs in which the eligible clinician participates. As we explained in the CY 2026 proposed rule, we believed that this complements our proposal to add individual-level calculations to QP determinations. We were also concerned that retention of the current policy where E/M services are the default basis for attribution, and where special processes are required for Advanced APMs that use a different attribution basis, could result in a complex set of unique attribution approaches for Advanced APMs.

We believe that this change would more appropriately recognize the Advanced APM participation of the eligible clinicians for whom these determinations are being made, particularly when considered in conjunction with the proposal to add an individual-level calculation to QP determinations. We further believe that this proposal would simplify and streamline QP determinations and address the challenges to Advanced APM participation reportedly faced by specialists who are less likely than primary care practitioners to provide E/M services.

We proposed to modify the sixth criterion in the definition of “attribution-eligible beneficiary” at Sec. 414.1305 to provide that, beginning with the 2026 QP Performance Period, an attribution-eligible beneficiary is a beneficiary who during the QP Performance Period has a minimum of one claim for any covered professional service furnished by an eligible clinician who is on the Participation List for the APM Entity at any determination date during the QP Performance Period.

We received public comments on this proposal. The following is a summary of the comments we received and our responses.

Comment: Many commenters were supportive of the CMS proposal to include Covered Professional Services in the QP determination method where it provides opportunities for participants, specifically clinicians who are less likely to provide E/M services, to receive credit for providing services to an attributed beneficiary.

Response: We appreciate the supportive comments and note that, while we have observed that factors outside our control such as the statutory QP thresholds and the eligible clinician makeup of a specific APM Entity have significant effects on QP determination results, we expect that for certain Advanced APMs, such as the Kidney Care Choices Model, the Enhancing Oncology Model (EOM), and the Transforming Episode Accountability Model (TEAM), this policy change may increase the number of QPs relative to the number there would have been in the absence of this change.

Comment: A few commenters not only supported the proposal but further suggested that CMS implement the proposed policy retroactively for the 2025 QP Performance Period rather than waiting until 2026.

Response: We appreciate these comments. However, it is not

operationally feasible to build the process change timely to perform it for the 2025 QP performance period. The QP determinations for the majority of the year have been performed already, and there is insufficient time to develop and incorporate updates to the QP determination formula, test them for accuracy, perform the updated determinations, and communicate the results timely for clinicians who would have to report to MIPS in 2026 for MIPS Performance Period 2025 to prepare for such reporting.

Comment: Several commenters expressed concern that the impact of switching the scope of services used in QP determinations on Advanced APM participants was unknown, especially where participants have consistently received calculations that use E/M services. Several such commenters were opposed to the CMS proposal to switch from E/M to Covered Professional Services in the QP determination method as they believed that this proposed change would lower the APM Entity score for certain ACO participants. A few such commentors suggested that we modify our proposal to provide a calculation at the APM Entity level using E/M services and the individual QP determination calculation using Covered Professional Services.

Response: We appreciate the concern and note that the impact of this policy is unlikely to be uniform across all Advanced APMs, or even across APM Entities or individual eligible clinicians within a single Advanced APM. In our proposal, we noted that we expect few APM Entities to notice a significant difference between their results using E/M services and Covered Professional Services. In fact, for ACOs specifically, we expect that for some, the APM Entity-level score will be higher based on Covered Professional Services, and for others, their score could decrease. We note that regardless of the direction of a change in scores, the impact bears meaning only when the change results in crossing a QP or Partial QP threshold percentage; for example, under current thresholds, if the proposed policy would result in an ACO's payment amount score increasing from 48 percent to 51 percent, that would cross the 50 percent Partial QP threshold and therefore attain Partial QP status for that ACO, which would be more meaningful than a situation where an ACO's payment amount score changed from 35 percent to 45 percent. However, we recognize that our estimates represent only point-in-time examples of the effects of our proposed policy, not consistent or predictable long-term effects, because QP determination results are influenced by several mutable factors outside the parameters of the determination formula, as we described in more detail in a response to comment as part of the CY 2025 Physician Fee Schedule final rule (89 FR 98463). In that same response, we further noted that a change in score affects the net estimated counts of QPs and Partial QPs only when a QP or Partial QP threshold score is crossed. This is true irrespective of magnitude; a patient count score change from 50 percent to 70 percent has no effect (this NPI would be a QP either way) on the total estimate, but a patient count score change from 48 percent to 52 percent does (this NPI would go from Partial QP to QP due to the score change). As such, our practice has been to use quantitative analyses principally to assess the potential range or general magnitude of a change in QP calculations, and to look for consistency with our general expectations or the presence of any surprising results. We continue to believe that identifying a single methodology across all Advanced APMs may offer certain benefits related to consistency and transparency across the Advanced APM program, and we remain committed to ensuring that our policies support participation in Advanced APMs. Therefore, we believe the concerns expressed by commenters around unintended consequences for some Advanced APM participants warrant our modifying our proposal. Specifically, we are finalizing a modified version of our proposed policy, namely by maintaining the calculation of QP determinations using E/M services under both the patient count and payment amount methodologies and by also adopting our proposed policy to calculate QP determinations using Covered Professional Services, also for both the patient count and payment amount methodologies. Because this modification in effect creates two versions of each calculation, we are effectuating this final policy by amending Sec. 414.1435 to create, effective with the 2026 QP Performance Period, separate calculations that use E/M services and Covered Professional Services, respectively. We further are finalizing amendments at Sec. 414.1305 to support and clearly delineate these separate calculations by establishing two separate definitions for attribution-eligible beneficiaries--both a “Covered Professional Service attribution-eligible beneficiary” and an “E/M attribution- eligible beneficiary,” each corresponding with the appropriate set of serviced described in the amendments to Sec. 414.1435. To provide determination methods using both definitions, we are adopting a modified version of our proposed policy to include amendments at Sec. 414.1435(c) and (d) that provide, starting with the 2026 QP performance period, for a determination first for the Covered Professional Service methods (payment and patient count), and at Sec. 414.1435(e) and (f) for the E/M methods (payment and patient count). We appreciate commenters' suggestions to use E/M for APM Entity-level calculations and Covered Professional Services for individual-level calculations. However, we believe that using both sets of services across both the patient count and payment amount methods and at both the APM Entity and individual levels, and then using the highest score, will give us the opportunity to compare the methodologies over time without risking that a choice between the two sets of services has unintentionally and unfairly disadvantages any participants. This change to the proposal to use both the existing E/M services approach and the proposed Covered Professional Services approach will give us the opportunity to monitor the effects of each approach, particularly the use of E/M services in our QP determination methodology, to ensure that our methodology reflects and rewards meaningful participation in Advanced APMs. The use of the highest score is consistent with our existing approach to QP determinations at Sec. 414.1435(h) (Sec. 414.1435(d) prior to the effective date of this final rule) where we use the higher of the patient count and payment amount scores and with our approach to use the higher of the APM Entity-based and individual clinician scores. We also believe it is fair given that different commenters have different concerns with each respective approach; while we are learning how scores compare across Advanced APM designs, specialties, etc., no Advanced APM participants are being disadvantaged in scoring outcomes. We note that the design and operation of Advanced APMs is expected to continue to evolve over time--particularly for CMS Innovation Center models which are inherently designed to continue innovating on contemporaneous baseline delivery and payment systems--and that, as always, we will continue to monitor the effects of each the existing and the new approaches to QP determinations with a plan to revisit our methodology if and when we determine that a future change is warranted. We remind our readers that some of the challenges that led us to the

policies we are finalizing in this final rule were identified and shared with us by Advanced APM participants, and we continue to want to hear about the impacts of our policies on participants' experiences in their Advanced APMs.

After consideration of public comments, we are finalizing with modification our policy at Sec. Sec. 414.1435 and 414.1305 to perform QP determinations using both an E/M services approach and a Covered Professional Services approach. c. Medical Home Model 50 Eligible Clinician Limit

In the CY 2017 Quality Payment Program final rule (81 FR 77428), we finalized a policy for the Medical Home Model nominal financial risk criterion to set a limit of 50 on the number of eligible clinicians in an organization that participates as an Advanced APM through a Medical Home Model. In the CY 2023 PFS final rule (87 FR 70117), we amended Sec. 414.1415(c)(7) to apply the 50 eligible clinician limit directly to the APM Entity participating in the Medical Home Model, and to no longer look to the parent organization for the APM Entity.

Likewise, in the CY 2017 Quality Payment Program final rule (81 FR 77468) we finalized a policy at Sec. 14.1420(d)(2) and (4) for the Medicaid Medical Home Model nominal financial risk criterion to set a limit of 50 on the number of eligible clinicians in an organization that participates as an Advanced APM through a Medical Home Model. In the CY 2020 PFS final rule (84 FR 63095) we finalized a proposed amendment at Sec. 414.1420(d)(2) and (4) to include Aligned Other Payer Medical Home Models with the existing Medicaid Medical Home Model financial risk and nominal amount standards for Medicaid Medical Home Models.

When we established the medical home model 50 eligible clinician limit in the CY 2017 Quality Payment Program final rule our stated intent was to encourage organizations capable of taking on significant downside risk to participate in Advanced Alternative Payment Models that met the “Generally applicable financial risk standard” at Sec. 414.1415(c)(1) (81 FR 77430). Based on our experience operating the Quality Payment Program we note that participation in Advanced APMs has increased, and the necessity of the Medical Home Model 50 eligible clinician limit has lessened. Moreover, we expect that this policy could provide a barrier for participation in models that meet the Medical Home Model definition in the future.

We proposed to amend the policy at Sec. 414.1415(c)(7) to provide that beginning with the 2026 QP Performance Period we will no longer apply the Medical Home Model 50 eligible clinician limit. Specifically, we proposed to modify Sec. 414.1415(c)(7) to sunset that provision and provide that it only applies from the 2023 QP performance Period through the 2025 QP Performance Period.

Additionally, we proposed a conforming amendment to the Aligned Other Payer Medical Home Model and Medicaid Medical Home Model 50 eligible clinician limit at Sec. 414.1420(d)(8) beginning in the 2026 performance period we will no longer apply the Medical Home Model 50 eligible clinician limit.

We received public comments on this proposal. The following is a summary of the comments we received and our responses.

Comment: A few commenters expressed their concern that the CMS proposal to no longer apply the Medical Home Model 50 eligible clinicians limit may limit participation in Advanced APMs by eligible clinicians in rural areas and those at small practices.

Response: We appreciate the commenters' desire to provide opportunities for small and rural practices. We do not anticipate that this change will have any impact on eligible clinicians in rural areas or to those with small practices. The proposed policy would not bar their participation in a Medical Home Model nor would it require an Advanced APM to allow larger participants; it simply would allow a Medical Home Model to operate without needing to examine the size of participants.

Comment: Many commenters expressed their support for the CMS proposal to no longer apply the Medical Home Model 50 eligible clinician limit.

Response: We appreciate the support to sunset the 50-clinician limit for Medical Home Model participants.

After consideration of public comments, we are finalizing this policy as proposed. d. Targeted Review of QP Determinations

In the CY 2021 PFS final rule (85 FR 84952), we finalized a policy to provide an opportunity for eligible clinicians to bring to our attention potential clerical errors we may have made that could have resulted in the omission of an eligible clinician from a Participation List used for purposes of QP determinations, and for us to review and make corrections if warranted. We also finalized that, after the conclusion of the time period for targeted review, there would be no further review of our QP determination with respect to an eligible clinician for the QP Performance Period (85 FR 84952). We noted that, consistent with section 1833(z)(4) of the Act, and as provided at Sec. 414.1455(a), there is no right to administrative or judicial review at sections 1869 or 1878 of the Act, or otherwise, of the determination that an eligible clinician is a QP or Partial QP at Sec. 414.1425, or of the determination of the amount of the APM Incentive Payment at Sec. 414.1450.

In the CY 2021 PFS final rule (85 FR 84953), we finalized our proposal to align the timing and procedures for this targeted review process with the MIPS targeted review process as codified at Sec. 414.1385. We noted this alignment would reduce the likelihood of confusion and burden on eligible clinicians and APM Entities. In the CY 2024 PFS proposed rule (88 FR 79380 through 79382 and 88 FR 79408), we modified the Targeted Review period for both MIPS and QPs such that we could meet our statutory obligation to apply the differentially higher QP conversion factor beginning on January 1 of each payment year beginning with CY 2026. When we made these updates, we also revised the language at Sec. 414.1385 more generally, including a change from 30 days to 15 days between notification and a response at Sec. 414.1385(a)(5), but we did not make corresponding changes to the QP Targeted Review at Sec. 414.1455.

We recognized that the different language in the current versions of these two sections of regulation could make it appear that our intent is for the MIPS and QP Targeted Review periods to operate differently, and that in fact the inconsistencies could mean that the Targeted Review for both QPs and MIPS participants is not guaranteed to be aligned. Our intent for these Targeted Review periods to be aligned has not changed, and we do not want to give the impression that there is a misalignment between them. Accordingly, we proposed to modify the langauge at Sec. 414.1455(b)(3)(ii) and (b)(3)(vi) to make clear that the same timing requirements that for MIPS Targeted Reviews that are currently specified in at Sec. 414.1385(a)(2) and (a)(5) also apply for purposes of QP Targeted Reviews.

We solicited comments on our proposal to modify the language at Sec. 414.1455(b)(3)(ii) and (b)(3)(vi) to the same timing requirements as that of MIPS Targeted Reviews specified at Sec. 414.1385(a)(2) and (a)(5). The following is a summary of the comments we received and our responses.

Comment: A few commentors expressed concern that the CMS proposal would shorten the duration of the Targeted Review period for QPs and may not provide enough time to submit a Targeted Review.

Response: We appreciate the comments and agree that it is important to provide a sufficient window to submit a Targeted Review. However, we note that our proposed amendment to the regulatory text would not change anything about how the current Targeted Review period actually operates. We recognize that it was not clear that the QP and MIPS Targeted Reviews operate together as part of a single QPP experience, and our proposal was simply to clarify by aligning the language of the two regulatory sections.

Comment: Many commentors expressed support for the CMS proposal to modify the language at Sec. 414.1455(b)(3)(ii) and (b)(3)(vi) to the same timing requirements as that of MIPS Targeted Reviews specified at Sec. 414.1385(a)(2) and (a)(5).

Response: We appreciate the commenters' support for our proposal.

After consideration of public comments, we are finalizing this policy as proposed.

To derive average costs, we used data from the U.S. Bureau of Labor Statistics' (BLS) May 2024 National Occupational Employment and Wage Estimates for all salary estimates (https://www.bls.gov/oes/2024/may/oes_nat.htm). In this regard, Tables D-A1 and D-A2 present BLS' mean hourly wage, our estimated cost of fringe benefits and other indirect costs (calculated at 100 percent of salary), and our adjusted hourly wage. There are many sources of variance in the average cost estimates, both because fringe benefits and other indirect costs vary significantly from employer to employer, and because methods of estimating these costs vary widely from study to study. Therefore, we believe that doubling the hourly wage to estimate total cost is a reasonably accurate estimation method.

We note that the May 2024 BLS data does not include median hourly wage rates for multiple physician occupation types listed in Table D- A2; in these cases, the BLS identifies that the median wage rate is equal to or greater than $115.00/hr or $239,200 per year. BLS data for prior years, such as the May 2022 and May 2023 data, provide similar notes for median wage rates for occupations that are above the same thresholds ($115.00/hr or $239,200 per year for the May 2022 BLS data (https://www.bls.gov/oes/2022/may/oes_nat.htm) and May 2023 BLS data (https://www.bls.gov/oes/2023/may/oes_nat.htm)). Therefore, for consistency with previous years for estimating physician wage rates, we have continued to use mean hourly wage rates across our wage estimates. [GRAPHIC] [TIFF OMITTED] TR05NO25.154

For our purposes, BLS' May 2024 National Occupational Employment and Wage Estimates do not provide an occupation that we could use for “Physician” wage data. To estimate a Physician's costs, we used an average

conglomerate wage of $299.32/hr as demonstrated below in Table D-A 2. [GRAPHIC] [TIFF OMITTED] TR05NO25.155

In section III.C of this final rule, we discuss testing the Ambulatory Specialty Model and finalized provisions for the model under the authority of the Innovation Center. Section 1115A of the Act authorizes the CMS Innovation Center to test innovative payment and service delivery models to reduce program expenditures while preserving or enhancing the quality of care furnished to Medicare, Medicaid, and Children's Health Insurance Program beneficiaries. As stated in section 1115A(d)(3) of the Act, Chapter 35 of title 44, United States Code, shall not apply to the testing, evaluation, and expansion of models under section 1115A of the Act. As a result, the information collection requirements contained in this rule are not subject to the requirements of the PRA. However, the anticipated impact is scored below in section VII.I.5. of the Regulatory Impact Analysis.

We did not receive public comments related to the information collection requirements related to ASM, and therefore, we are finalizing provisions as discussed in section III.C of this final rule. 2. ICRs Regarding the Updates to the Medicare Diabetes Prevention Program (Sec. Sec. 410.79, 414.84, and 424.205)

In section Sec. 410.79(b), we are finalizing our proposal to make changes to regulation Conditions of Coverage. First, we are finalizing our proposal to amend Sec. 410.79(b) by revising the definitions of “Extended flexibilities period” and “Online” and adding definitions for three new terms for MDPP, including “Live Coach interaction,” “Online delivery period,” and “Online session.” The definitions will extend virtual delivery flexibilities through December 31, 2029, describe accepted delivery modes for MDPP, and further align MDPP terminology with CDC DPRP Standards.\471\ These finalized changes to the definitions aim to remove access barriers for beneficiaries and provide suppliers with more delivery options in response to comments regarding the increasing demand for virtual participation options.

\471\ Centers for Disease Control and Prevention Diabetes Prevention Recognition Program. Standards and Operating Procedures. Requirements for CDC Recognition. June 2024. https://nationaldppcsc.cdc.gov/s/article/DPRP-Standards-and-Operating-Procedures.

We are finalizing our proposal to amend Sec. 410.79(c)(1)(ii) by clarifying that weight measurements used to determine the achievement or maintenance of the required minimum weight loss must be taken in person by an MDPP supplier during an MDPP session or reflected in the beneficiary's medical record dated within two (2) days of the completion of the MDPP session. After consideration of public comments indicating that the proposed 2 day timeframe was overly restrictive, we are finalizing the changes to the provision at Sec. 410.79 (c)(1)(ii) to allow for weight measurements used to determine the achievement or maintenance of the required minimum weight loss to be based on weight documented in the beneficiary's medical record with an updated timeframe of five (5) calendar days, which provides sufficient flexibility while maintaining clear separation between sessions. Additionally, we are finalizing our proposal to amend Sec. 410.79(e)(3)(iii)(C) to revise weight collection requirements for MDPP in response to comments regarding increased flexibility for MDPP participants who may be traveling or unable to obtain weight measurements at home due to mobility and safety considerations. This change allows beneficiaries to self-report weight from a reasonable location outside of an in-person delivery site while maintaining program integrity through existing date-stamp requirements described at Sec. 410.79(e)(3)(iii)(c) which state that the photo or video must clearly document the weight of the MDPP beneficiary as

it appears on their digital scaled on the date associated with the billable MDPP session.

Finally, we are finalizing our proposal to amend Sec. 410.79 by adding paragraph (f) to test the addition of coverage of an asynchronous, Online delivery modality during the “Online delivery period” (until December 31, 2029), and clarify that MDPP suppliers are not required to maintain in-person delivery capability during the Online delivery period. These changes will allow virtual-only organizations to enroll in Medicare as MDPP suppliers, streamline the process to allow for greater delivery of Online sessions, and promote alignment with the 2024 CDC DPRP Standards.

Upon further review of existing regulations, CMS has determined that current requirements for make-up sessions do not adequately address Online delivery. Make-up sessions for Online delivery were referenced in the CY 2026 PFS proposed rule at Sec. 410.79 (f)(2)(i)(C), which states the Set of MDPP services, inclusive of make- up sessions, must be delivered to individual beneficiaries fully synchronously (that is, In-person, Distance learning, or In-person with a distance learning component) or fully asynchronously (that is, Online). Therefore, CMS is finalizing additional updates to ensure regulatory clarity for make-up sessions offered through Online delivery by revising existing requirements at Sec. 410.79(d)(1), which state “an MDPP supplier may offer a make-up session to an MDPP beneficiary who missed a regularly scheduled session. MDPP make-up sessions may only use in-person or distance learning delivery.” CMS is revising this language to indicate that Online delivery is also an accepted delivery modality for make-up sessions by specifically stating that “an MDPP supplier may offer a make-up session to an MDPP beneficiary who missed a regularly scheduled session. MDPP make-up sessions may only use in-person, distance learning, or Online delivery.” CMS would like to reiterate that the Set of MDPP services, inclusive of make-up sessions, must be delivered to individual beneficiaries fully synchronously (that is, In-person, Distance learning, or In-person with a distance learning component) or fully asynchronously (that is, Online). Therefore, a supplier may not offer an Online make up session to a beneficiary who is participating in MDPP through In-person, Distance learning, or In-person with a distance learning component delivery.

We are finalizing the proposed edits throughout Sec. 414.84 by revising paragraphs (b)(1) introductory text and (b)(2) introductory text to update language to include all accepted MDPP delivery modes for performance goals in which beneficiaries achieve weight loss milestones and adding paragraph (c)(3) to indicate payment for Online delivery, including the inclusion of a new Healthcare Common Procedure Coding System (HCPCS) G-code for online delivery. Finally, we are finalizing the proposed changes to redesignate paragraphs (c)(3) and (4) as paragraphs (c)(4) and (5) respectively and revise the redesignated paragraph (c)(4)(ii) to include a payment rate for a core session or core maintenance session furnished Online during the Online delivery period.

Lastly, we are finalizing our proposal to amend Sec. 424.205(c)(10) to allow the minimum number of required MDPP core sessions and core maintenance sessions to be delivered Online during the Online delivery period; Sec. 424.205(f)(2)(i) to include the online modality among acceptable session types for session documentation; and Sec. 424.205(f)(5) to update requirements for achieving 5 and 9 percent weight loss measured in accordance with Sec. 410.79(c)(ii). Section 1115A(d)(3) of the Act exempts Innovation Center model tests and expansions, which include the MDPP expanded model from the provisions of the PRA. Accordingly, this collection of information section does not set out any burden for the provisions, including the collection of weights.

We did not receive public comments on the ICRs for MDPP, and therefore, we are finalizing these changes as proposed. 3. ICR Regarding the Medicare Prescription Drug Inflation Rebate Program Under Sections 11101 and 11102 of the Inflation Reduction Act (IRA)

Section 1860D-14B(b)(1)(B) of the Act requires that beginning with plan year 2026, we shall exclude from the total number of units for a Part D rebatable drug, for an applicable period, those units for which a manufacturer provides a discount under the 340B Program. In association with the CY 2026 Physician Fee Schedule Proposed rule, we solicited comments on a new information collection request to enable us to collect information to implement this voluntary reporting. The following proposed changes will be submitted to OMB for review under control number 0938-1485 (CMS-10930).

In section III.I. of this final rule, we are finalizing the proposed policies to establish a 340B repository and allow 340B covered entities (hereinafter “covered entities”) to optionally begin submitting to the 340B repository data elements from 340B identified claims for covered Part D drugs billed to Medicare Part D. We will allow covered entities to begin submitting the fields specified by CMS to the 340B repository beginning in 2026 for Part D 340B-identified claims with dates of service on or after January 1, 2026. This testing period will provide data for us to conduct usability testing for the 340B repository and allow covered entities to develop and test processes for submitting data elements to the 340B repository. We will not use the data submitted for user testing to remove units from Part D inflation rebates unless and until a policy to do so is proposed and finalized. Please see section III.I. of this final rule for detailed information on these policies.

We proposed that covered entities may voluntarily submit data directly to us (or a contractor) to be included in the 340B repository. We will consider all five data elements received by the 340B repository to be associated with 340B Part D claims; that is, we (or a contractor) will not further verify the 340B status of a claim but rather, the 340B repository will serve solely to store these data. Under this process, we will require a certification from covered entities that choose to submit data to the 340B repository that the data elements from all claims submitted to the 340B repository are from verified 340B claims and, to the best of the covered entity's knowledge, their submission includes all Part D 340B-identified claims for the covered entity at the time of submission for dates of service during the relevant period.

We established in the final rule that covered entities that choose to submit data to the 340B repository during the testing period beginning in 2026 will submit the fields specified by us on a quarterly basis to the 340B repository by a date announced in the future, which would be no sooner than 3 months after the date on which the 340B repository is available to receive submissions from covered entities. We established that covered entities that choose to submit data will report data elements related to all 340B Part D claims with dates of service on or after January 1, 2026. We will provide a deadline that we believe would be necessary to allow sufficient time for covered entities to gather, validate, and submit the specified data to the 340B repository. We will provide the submission deadline(s) once the Medicare Prescription Drug Inflation Rebate ICR is approved. During the rest of the testing period, we anticipate that covered entities will be expected to

report data on a quarterly basis to the 340B repository within 3 months of the end of a given calendar quarter. We understand that covered entities typically contract with vendors, such as 340B third-party administrators (TPAs), to determine 340B eligibility of claims using data provided by covered entities and their contract pharmacies. We will allow covered entities that choose to participate, to arrange for their TPAs or other vendors to submit certain data elements to the 340B repository on their behalf. Covered entities would certify and would ultimately be responsible for the accuracy of the data submitted to the 340B repository, even if a covered entity has an arrangement with a vendor to submit on its behalf. The data from these quarterly submissions would be used to assess the usability of such data to remove 340B units from the total number of units and total rebate amount specified in the Preliminary Rebate Report and Rebate Report detailed at Sec. 428.401(b) and (c), respectively. We established that covered entities participating in the 340B repository during the testing period beginning in 2026 provide information identifying the covered entity, specifically the covered entity's 340B ID and name as designated in the 340B Office of Pharmacy Affairs Information System (OPAIS), when submitting claim information to the 340B repository. We will use the collected identifying information to (1) perform analyses to assess suitability of the data for future use in removing 340B units, and (2) provide a means to follow up with the covered entity on questions related to claims data submission.

In the proposed rule, we estimated that approximately 6,500 covered entities will respond and submit data to the 340B Repository Data Elements Reporting Form for CY 2026 based on internal CMS analyses of the unique 340B ID numbers in the HRSA OPAIS database that are active (that is, not terminated) with at least one contract pharmacy association listed and based on comments received on the CY 2025 PFS proposed rule from interested parties, including covered entities, requesting and expressing support for the establishment of a 340B repository.

Using the wage rates from Table 74 of the proposed rule, we expect, for a covered entity or its TPA, a dedicated Software Quality Assurance Analyst and Tester, or team of analysts, 6 hours sampling for each submission and a General and Operations Manager 2 hours reviewing each submission.

In aggregate, we estimated an annual burden of 208,000 hours (6,500 covered entities or TPAs x 8 hr/response x 4 responses/year) at a cost of $23,195,120 (26,000 responses x [(2 hr x $128.00/hr) + (6 hr x $106.02/hr)]). [GRAPHIC] [TIFF OMITTED] TR05NO25.156

We received public comments on this proposal. The following is a summary of the comments we received and our responses.

Comment: Some commenters supported CMS establishing the proposed voluntary 340B repository in calendar year 2026. A commenter emphasized that covered entities are facing new requirements and challenges and stated that the proposed testing period is critical to assess CMS' and providers' investment of time and resources into reporting to the repository.

By contrast, many other commenters requested that CMS make reporting to the repository mandatory for covered entities and their contractors. A few of these commenters stated that without a mandatory requirement, the repository will not fulfill the legal requirement to remove 340B units. Some commenters stated that a mandatory repository would provide a more comprehensive and accurate method for identifying and excluding 340B units than a voluntary repository. A commenter recommended that if CMS does not implement a requirement to submit to the repository initially, it should make submission mandatory for key types of large hospitals such as DSH and Rural Referral Centers (RRCs), stating that these hospitals have sophisticated software to manage their 340B programs which could streamline submission to the repository. A few commenters requested that CMS clarify that the repository will be mandatory in 2027, which they state could encourage covered entities to use the repository when it is voluntary in 2026. A couple of commenters stated under the inflation rebate invoicing timeline, CMS could establish and test a repository and require covered entities to retrospectively report 340B claim data for 2026 to the repository once it is operational.

Some commenters expressed concern that with voluntary reporting, the repository is unlikely to receive submissions from a significant number of covered entities. One of these commenters stated that time, system set up, and an attestation requirement reduce incentives for covered entities to submit data to a voluntary repository. Another commenter stated that covered entities have consistently opposed efforts to increase transparency in the 340B Program through broader access to claims data. A few commenters stated that low submission rates could impede CMS' ability to acquire the necessary data to test the repository. Another commenter stated that hospitals have had poor compliance rates with CMS-mandated price transparency reporting and, therefore, the commenter has little confidence that voluntary reporting to the repository would meet the statutory requirement to exclude 340B units. A couple of commenters recommended that CMS engage with interested parties and provide data protections before moving to a mandatory repository. A

few commenters stated that CMS should provide a timeline by which the 340B data collection will transition from voluntary to a mandatory requirement.

A couple of commenters requested CMS work with the HRSA to establish an enforcement mechanism tied to mandatory compliance with the repository. A couple of commenters recommended that CMS consider making data submission to the repository mandatory by relying on its authority at section 1121 of the Act to establish “a uniform system for the reporting,” of “discharge and bill data” by facilities and organizations, in addition to general CMS authorities related to organizations enrolled in Medicare. A few commenters recommended CMS make data submission to the repository mandatory by relying on IRA rulemaking authority and general rulemaking authority under sections 1102(a) and 1871(a)(1) of the Act to establish requirements for Medicare providers through Conditions of Participation. These commenters emphasized that covered entities that do not submit data to the repository could be considered to be in violation of the Conditions of Participation and could be subject to a range of actions up to and including termination of their provider agreements.

Response: We are finalizing the proposal to establish a repository to receive voluntary submissions from covered entities of certain data elements from Part D 340B claims to allow us to assess such data for use in identifying units of Part D rebatable drugs for which a manufacturer provides a discount under the 340B Program in a future applicable period. We decline to provide a timeline under which we would move to a mandatory repository, but as we stated in the proposed rule, we are actively considering options for mandatory reporting to the 340B repository in the near future and we recommend that covered entities take advantage of the testing period to prepare for future policy development related to 340B repository reporting. We expect that hospitals receiving Medicare DSH payments, FQHCs, and CAHs will begin to submit data elements to the 340B repository during the testing period. We encourage all covered entities to submit data elements to the 340B repository during the testing period beginning in 2026, as this participation would allow for robust testing of data quality and completeness.

We do not agree with the commenters that stated that without a mandatory requirement, the repository will not fulfill the legal requirement to remove 340B units. The repository will not be used at this time to fulfill the legal requirement to remove 340B units, but rather to allow for robust testing of data quality and completeness to allow us to assess whether such data could be used to identify and remove 340B units for purposes of calculating Part D inflation rebates in a future applicable period following proposal and finalization of a policy to do so. It will also provide an opportunity for covered entities to develop and test their data submission processes. We appreciate the recommendation to engage with interested parties and provide data protections before moving to a mandatory repository, and we plan to continue to engage with interested parties and ensure that data is protected as we consider options for mandatory reporting to the 340B repository.

Finally, we also appreciate the comments and input related to authorities that the agency may rely on to implement a mandatory reporting requirement to the repository and conduct enforcement related to reporting to the repository. We will consider them in connection with any future rulemaking we may undertake with respect to adoption of a mandatory reporting requirement.

Comment: Many commenters stated that data collected in the repository should be used only for inflation rebate purposes. A couple of commenters stated that if CMS were to decide to use data submitted to the repository for other programs outside the Medicare Part D Drug Inflation Rebate Program, CMS should provide ample notice, justification, and an opportunity for interested parties to provide feedback. A commenter requested that CMS clarify if the repository will be integrated with the Medicare Transaction Facilitator Data Module. Another commenter asserted that HHS should not impose two separate and overlapping data submission requirements on covered entities under the 340B repository and HRSA's Rebate Model Pilot Program.

By contrast, some commenters stated that the repository should serve as more than just a resource for the Medicare Part D Drug Inflation Rebate Program and could be a centralized source to identify 340B-eligible claims across HHS programs. A few of these commenters asserted that CMS should work with HRSA to establish a repository with expanded scope that would support transparency across the 340B Program. One of these commenters stated that data submitted to the repository should be used to monitor misuse of the 340B Program by comparing data submitted to the 340B repository to data submitted under HRSA's 340B Rebate Model Pilot Program. Some commenters stated that the information submitted to the repository could be used in the administration of other programs, such as the Medicare Drug Price Negotiation Program. A couple of commenters recommended the repository be populated with claim-level data from the HRSA 340B Rebate Model Pilot Program for participating drugs.

A commenter expressed interest in how the data submitted to the repository may be used, suggesting that the data the repository would collect could offer significant value if used for public health trends and drug price modeling. This commenter stated they would be supportive of the repository if the goal of the repository was to better track revenue and provide more transparency and accountability to resolve disputes in addition to validating 340B product data.

Response: At this time, any data submitted to the repository will only be used to begin usability testing to assess usability for the purpose of removing 340B units under the Medicare Part D Drug Inflation Rebate Program. If we were to decide to use data submitted to the repository for other programs outside the Medicare Part D Drug Inflation Rebate Program, we will provide notice, justification, and an opportunity for interested parties to provide suggestions on the proposal.

Commenters who recommended the information submitted to the repository could be used in the administration of other programs, these comments are out of scope for this final rule because they address other programs and topics beyond the scope of the Medicare Part D Drug Inflation Rebate Program.

Comment: Many commenters supported the claims data elements that CMS proposed for submission to the 340B repository. Many commenters stated that the five data elements that CMS proposed are appropriate for submission to the repository and do not present overly burdensome requirements or put protected health information at risk. A couple of commenters stated that the proposed data elements represent the necessary information to accurately match to PDE records and that the proposed elements could be easily matched to data from Medicare Part D data to identify 340B units to remove. A couple of commenters recommended CMS minimize the number of data elements for covered entities to submit to the repository. A commenter recommended CMS define data elements and

submission timelines for submission to the repository.

Some commenters recommended CMS align the data elements to submit to the repository with the data elements from HRSA's 340B Rebate Model Pilot Program to increase efficiency. A commenter stated that CMS should collect 340B data for all segments of the market rather than only Part D claims, stating that these changes would streamline the submission process for covered entities.

A commenter recommended CMS finalize the data elements proposed with the addition of the “Quantity Dispensed” element. This commenter argued that covered entities tend to submit inaccurate, incomplete, or variable data in the Quantity Dispensed field. A commenter stated that the proposed “Fill Number” data element is not an element routinely collected or used by State and territorial ADAPs and should not be a required field for submission to the repository by State and territorial ADAPs. A commenter recommended CMS add the original purchase date of the units dispensed as an additional data element. A commenter stated that CMS should avoid relying on NPI for prescribers or contract pharmacy identifiers to identify 340B claims, stating that this would likely cause confusion and misidentification. A commenter recommended CMS include prescriber identification as a required data element for submissions to the repository. A couple of commenters recommended that CMS work with interested parties to identify data elements that minimize burden on ADAPs as much as possible.

Response: We intend to minimize burden on covered entities while collecting the minimum elements that would be necessary to match a submission to a PDE transaction to exclude units from inflation rebate calculations, were the repository to be used for such purpose in the future. We appreciate the commenters who submitted recommended additional data elements to collect and the commenters who supported the proposed data elements.

In the interest of minimizing burden on covered entities while collecting sufficient information to match a submission to a PDE transaction to exclude units from inflation rebate calculations, we are finalizing the requirement that entities (whether a 340B covered entity, or a vendor on their behalf) that choose to submit data to the 340B repository during the testing period provide information identifying the 340B covered entity, which could include information such as the covered entity's 340B ID and name as designated in the 340B OPAIS database, when submitting claim information to the 340B repository. In addition to this identifying information, we are finalizing the requirement that covered entities that choose to submit data to the 340B repository during the testing period beginning in 2026 must submit the following data elements from Part D claims for covered Part D drugs that are purchased under the 340B Program and dispensed to Medicare Part D beneficiaries: (1) Date of Service; (2) Prescription or Service Reference Number; (3) Fill Number; (4) Dispensing Pharmacy NPI; and (5) NDC-11. We will use these data elements to match claims to PDE transactions and perform further analyses to assess suitability of the data for future use in removing 340B units from Part D inflation rebate calculations. In response to the comments regarding ADAP programs and the Fill Number data element, we believe the data elements we are finalizing to collect in the 340B repository minimize burden on covered entities while providing the information needed to match submitted data elements to PDE transactions. For Part D claims, the Fill Number data element is required information to accurately associate the submitted data elements to the correct corresponding PDE record.

Comment: A few commenters stated that submitting data to the repository would not be overly burdensome since entities are already developing infrastructure and operational workflows needed to prepare to submit similar data for a set of drugs that will be included in the HRSA 340B Rebate Model Pilot Program. A commenter supported the proposal to allow third party administrators to transmit that data to the repository on behalf of covered entities.

Some commenters advised CMS to minimize burden on covered entities reporting to the repository. A few commenters stated that the process of identifying claims should not shift costs or burden onto pharmacies or prescribers. A commenter requested CMS finalize the proposal to receive data directly from the covered entity, and not through any payer or manufacturer. A commenter requested that CMS clarify that pharmacies are not required to provide information to the repository, and that only covered entities are voluntarily providing this information.

A commenter interpreted CMS' proposal as requiring covered entities to begin submitting data fields to the 340B repository in 2026, and stated that this requirement would have significant implications for the Indian Health System (IHS) as IHS facilities operate with limited staff and resources and the commenter stated that this data collection could be used to restrict 340B savings. A commenter raised concerns regarding administrative costs and cash-flow volatility for small participants if there are new rebate obligations. A commenter recommended that CMS withdraw the requirement to submit to the repository as it would create an overwhelming administrative burden for rural facilities and stated that CMS should work with payers and pharmacies that already have this data. A commenter raised concern about burden for hospital neurology departments and outpatient practices, stating that the availability of the data elements is variable. This commenter recommended that CMS track additional administrative burden associated with submitting data to the repository and devise a strategy to minimize burden without reducing the value of the repository.

A few commenters recommended that, to reduce burden on covered entities, CMS remove the proposed requirement that covered entities certify that the data elements submitted are for 340B claims with dates of service during the relevant time period and that the data elements from all claims submitted to the 340B repository are from verified 340B claims and, to the best of the covered entity's knowledge, their submission includes all Part D 340B claims for the covered entity at the time of submission for the applicable period. By contrast, a commenter recommended CMS finalize the proposed provision to require covered entities to complete this certification.

A commenter stated that they do not support the repository because it puts the stability of the 340B Program at risk. A few commenters stated that submitting data to the repository will substantially increase burden on providers and that providers would need to devote significant resources to ensure compliance, which could divert resources from direct patient care. For these reasons, a commenter suggested CMS use the claims-based methodology to identify 340B Part D claims and abandon the repository approach, including any future mandatory data repository. A commenter recommended that CMS allow State ADAP programs to submit direct purchase and rebate data to the repository.

Response: We are finalizing that the 340B repository will be established and will begin accepting voluntary submissions from covered entities of the fields specified by us beginning in 2026

for Part D 340B claims with dates of service on or after January 1, 2026 to allow for us to begin usability testing for the 340B repository. We will not use the data submitted during the testing period to remove units from Part D inflation rebates unless and until a policy to do so is proposed and finalized.

In developing the data elements for submission and process for voluntary submission to the repository, we considered how to minimize burden on covered entities. We do not intend to receive data from pharmacies, manufacturers, or plans on the covered entity's behalf. As we stated in the proposed rule, we understand covered entities typically contract with vendors, such as 340B third-party administrators, to determine 340B-eligibility of claims using data submitted by covered entities and their contractors. We will allow covered entities that choose to submit data to the repository to arrange for their TPAs or other vendors to submit certain data elements to the 340B repository on their behalf if they would like to do so. At this time, we are not collecting direct purchase or rebate data in the 340B repository but we note that if ADAPs are covered entities and used 340B drugs for a Part D claim, they can submit the data elements from that claim to the 340B repository.

We appreciate the commenters who submitted comments on the proposed requirement that covered entities certify that the data elements submitted are for 340B claims with dates of service during the relevant time period and that the data elements from all claims submitted to the 340B repository are from verified 340B claims and, to the best of the covered entity's knowledge, their submission includes all Part D 340B claims for the covered entity at the time of submission for the applicable period. We do not have access to data to validate and ensure accuracy of submitted data, therefore we find this certification necessary to ensure completeness and accuracy of data submissions to the 340B repository. We are finalizing the requirement that covered entities must certify the completeness and accuracy of the data submitted.

We do not agree that the 340B repository puts the stability of the 340B Program at risk. A wide array of interested parties commented on the CY 2025 PFS proposed rule and previous CMS policymaking documents recommending that we create a mechanism through which covered entities would retrospectively submit data to us identifying 340B claims dispensed under Part D. Interested parties advised that this mechanism allow covered entities to submit these data directly to us, rather than through claims that dispensers submit via Part D plan sponsors and we believe this structure will not create risk for the 340B Program.

Comment: A few commenters advised CMS to engage with interested parties related to establishing the repository. A commenter encouraged CMS to collaborate with interested parties to ensure that the repository is established effectively and securely so that covered entities can meaningfully participate. A commenter recommended CMS provide a deadline of when the repository will be live and report on its testing of the repository's data matching regularly. A commenter stated that CMS should engage with interested parties to understand why and improve voluntary participation if voluntary reporting to the repository is lower than CMS expected.

A commenter requested that CMS consult with HRSA and provide educational resources and training related to submitting data to the repository that would lower administrative burdens on pharmacists. A commenter requested that CMS convene an advisory group to assist in finalizing and implementing policy related to ADAPs submitting data to the repository and suggested interested parties to serve as representatives for the group.

Response: We welcome engagement with interested parties, including on topics such as data submission requirements and timing, as we work to operationalize the repository. We will share more information about the repository operationalization as soon as possible and will work to engage with interested parties to understand any barriers to participation, including those representing ADAPs. We will also consider how to provide useful training and resources related to submitting data to the repository that would lower the administrative burdens.

After consideration of public comments, we are adopting the policies as proposed for covered entities to submit 340B claims data to a 340B repository. 4. ICRs Regarding Manufacturers Reporting of Drug Pricing (Sec. Sec. 414.802, 414.804, and 414.902)

The following proposed changes will be submitted to OMB for review under control number 0938-0921 (CMS-10110) a. Requiring Certain Manufacturers To Report Drug Pricing Information for Part B (Sec. Sec. 414.802 and 414.902)

In the CY 2022 PFS final rule, it was stated that the new provisions finalized in that rule at Sec. Sec. 414.802 and 414.804 implemented new statutory requirements under sections 1847A and 1927 of the Act, as amended by section 401 of Division CC, Title IV of the CAA, 2021 (for the purposes of this section of this proposed rule, hereinafter is referred to as “section 401”), which requires manufacturers without a Medicaid National Drug Rebate Agreement (NDRA) to report ASP information to CMS for calendar quarters beginning on January 1, 2022, for drugs or biologicals payable under Medicare Part B and described in sections 1842(o)(1)(C), (E), or (G) or 1881(b)(14)(B) of the Act, including items, services, supplies, and products that are payable under Part B as a drug or biological (86 FR 65560). In that final rule, we estimated that an additional 568 respondents had products for which they would be required to report ASP data to CMS beginning January 1, 2022 (86 FR 65560), some of which are manufacturers of skin substitutes. Following the implementation of section 401, we estimated 500 respondents, 2,000 responses (500 respondents x 4 responses/yr), 26,000 hours (2,000 responses x 13 hr/ response).

In section II.K. of this final rule, we finalized that skin substitutes be paid as incident-to supplies, which are not required to be paid under section 1847A of the Act. Accordingly, manufacturers of skin substitutes will no longer be required to report ASP data to CMS. Instead, ASP data reporting for manufacturers of skin substitutes would become voluntary. The finalized policy of shifting the payment of skin substitute manufactures to incident-to supplies will therefore decrease the number of manufacturers that are required to report ASP data to CMS each quarter, ultimately decreasing the overall burden of ASP data reporting. Based on ASP data from the April 2025 pricing file, 65 skin substitute manufacturers are reporting ASP data. Under the finalized policy to pay for skin substitute products as incident-to supplies, the number of manufacturers required to report ASP data to CMS would decrease manufacturer burden by minus 65 respondents, minus 260 responses (-65 respondents x 4 responses/yr), and minus 3,380 hours (- 260 responses x 13 hr/response) and minus $154,804 (-3,380 hr x $45.80/ hr).

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We note that these estimates have not changed since the proposed rule. b. Average Sales Price: Price Concessions and Bona Fide Service Fees (Sec. Sec. 414.802 and 414.804)

In section III.A of this final rule, we finalized revisions to Sec. 414.804(a)(5) to add additional submission requirements for the reporting of ASP data. Specifically, the submission requirement is being expanded to include (1) reasonable assumptions for calculating the manufacturer's ASP, including a summary of the methodology used to determine fair market value for fee arrangements as described at Sec. 414.804 and (2) warranty or certification letter from the recipient of a fee from a manufacturer as evidence that a fee was not passed on as a price concession in accordance with submission requirements at Sec. 414.804.

Currently, in the absence of specific guidance in the Act or Federal regulations, the manufacturer may make reasonable assumptions in its calculations of the manufacturer's ASP, consistent with the general requirements and intent of the Act, Federal regulations, and its customary business practices. The reasonable assumptions explain the methodology used by the manufacturer to calculate ASP. This final rule will make the reasonable assumptions document, which is currently submitted voluntarily by some manufacturers along with ASP data, a required component of the quarterly ASP data submission.

The warranty or certification from the recipient of a bona fide service fee is a new document that we are finalizing to be required as evidence of whether or not a fee was passed on as a discount (that is, price concession).

The burden associated with these new requirements is the time and effort required by manufacturers of drugs and biologicals to submit ASP data to CMS quarterly under sections 1847A and 1927 of the Act and prepare and submit the reasonable assumption document and warrantee/ certification letter to CMS.

We anticipate an increase in burden because, in addition to the current requirement for submission of ASP data each quarter to CMS, all manufacturers are required to submit reasonable assumptions and warrantee/certification letters to accompany their ASP data submissions. Because reasonable assumptions varied in terms of the exact information that was provided and were generally updated by each manufacturer every 1 to 3 years depending on changes in the product line and various contract terms and conditions with intermediaries or consultants, we are finalizing adding mandatory templates for submitting reasonable assumptions and bona fide service fee warrantee/ certifications.

Consistent with the proposed rule, we continue to anticipate that the number of manufacturers required to report ASP data to CMS will decrease by minus 65 manufacturers (500 active estimate-435 proposed estimate) and estimate (as described in the following paragraphs) that it will take 77 hours per year for each respondent.

Based on our review of voluntarily submitted reasonable assumption data, we are continuing to estimate that it would take 19 hours annually at $45.80/hr for a Secretary/Administrative Assistant (consisting of 10 hr to compile and/or update the information and 5 hours to review the information approximately once annually and 1 hour per quarter (or 4 hr annually) to submit the reasonable assumptions to CMS to CMS via ASP Data Collection System.

We continue to estimate the disclosure and submission of the warrantee/certification letter from the recipient of a bona fide service fee is 6 hours annually at $45.80/hr for a Secretary/ Administrative Assistant (consisting of 2 hr to review the warrantee/ certification letter approximately once per year and 1 hour per quarter (or 4 hr annually)) to submit the warrantee/certification letter, including obtaining a signature, to CMS via the ASP Data Collection System. Although a warrantee/certification letter could be renewed up to every three years depending on the specific terms of each contract, we will use a calculation of once annually to accommodate the burden in most circumstances.

This burden is in addition to the current estimated burden of ASP data submission of 52 hours per year per respondent at $45.80/hr for a Secretary/Administrative Assistant (13 hr per quarter).

In the proposed rule, we estimated that these would result in an annual burden of 25 hours (19 hr + 6 hr) per response per year. In aggregate, we estimate a burden of 10,875 hours (435 responses x 25 hr/ response) at an annual cost of $498,075 (10,875 hr x $45.80/hr). This estimate remains the same for this final rule.

We did not receive public comments on these estimates; however, following publication of the proposed rule, we identified that we should account for some additional burden for a chief executive for the certification requirement. Specifically, in this final rule, we are adding burden for certifying ASP data for a chief executive, which would take 1 hour per quarter at $252.82/hr. These additional updates are reflected in Table D-A5.

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Section 1899(e) of the Act provides that chapter 35 of title 44 U.S.C., which includes such provisions as the PRA, shall not apply to the Shared Savings Program. Accordingly, we are not setting out Shared Savings Program burden estimates under this section of the rule. Please refer to the Regulatory Impact Analysis (section VI. of this final rule) for a discussion of the impacts associated with the changes to the Shared Savings Program as described in section III.F. of this final rule. 6. The Quality Payment Program (42 CFR Part 414 and Section IV. of This Final Rule)

The following Quality Payment Program-specific ICRs reflect changes to our currently approved requirements/burden as summarized in section V.B.5.a.(1) in this final rule.

In the CY 2026 PFS proposed rule (90 FR 32778 through 32793), we presented detailed burden estimates for Quality Payment Program ICRs that are new or revised to reflect the estimated impact of policy proposals. We also discussed policy proposals for Quality Payment Program ICRs for which we assumed there were no burden impacts. In this final rule, we continue this approach for finalized policies. Non- rulemaking revisions, due to updated data and assumptions, and the changes due to provisions of this rule, will be submitted to OMB for approval under the identified control numbers. This approach for the Quality Payment Program ICRs follows our long-standing process for setting out PRA-related burden in most of our proposed and final rules. It is intended to focus our PRA score on the impact of this rule's policy changes. We refer readers to section VII.I.5. of this final rule for the Regulatory Impact Analysis for discussion of this year's policies' impacts to final scores and payment adjustments. For all ICRs, including ICRs where we did not propose changes to the number of respondents, responses, or time per response, the costs identified in the revised collection of information requests reflect the updated 2024 wage rate data described in section V.A. of this final rule.

For the CY 2026 rulemaking cycle, we simplified our methodology for calculating the total cost of each ICR to be consistent with the approach adopted by other programs. In prior years, we assessed total cost as the number of responses multiplied by cost per response, determining cost per response as the time per wage rate category per response multiplied by the hours per response. We removed the cost per response measurement from our total cost calculations and, instead, determined cost as a function of hourly wage rates per labor category identified in Tables D-A1 and D-A2 of this final rule multiplied by the annual hours per labor category. We determined annual hours per labor category by multiplying the annual burden hours per response by the number of annual responses. Accordingly, we updated our summary calculations of the total change in time and cost of this rulemaking to focus on the estimated incremental burden of this rulemaking.\472\

\472\ Due to this approach to estimate the change in cost, annual changes to the hourly wages rates as identified by BLS are not identified as a change in cost due to data adjustments. Any changes in cost due to data adjustments in section V.B.5.a.(1)(a) of this final rule reflect changes due to the annual hours based on the availability of updated MIPS submission data since our currently approved estimates.