Physician Fee Schedule (PFS) Final Rule Effective 1/1/26

CMS finalized the 2026 PFS Final Rule with substantial documentation and submission requirements.  These are new for manufacturers who have Medicare Part B reporting responsibilities as well as other considerations. 

Executive Summary of New Documents Due for Your Q1 2026 ASP Submission:

1. Documentation and Submission of Medicare Part B Average Sales Price (ASP) Reasonable Assumptions– Manufacturers must have ASP reasonable assumptions documentation and submit to CMS. (Note: CMS has released draft templates which we expect CMS to release final templates in the near future.)
2. Documentation and Submission of Fair Market Value (FMV) Methodology – Manufacturers must have FMV methodology documentation on each of its service providers and submit to CMS.  This is for current, renewed, or new service provider contracts. (Note: CMS has released draft templates which we expect CMS to release final templates in the near future.)
3. Documentation of Pass-Through Certification Requirement – Manufacturers must obtain certification or warranty documentation from its service provider that bonafide service fees are not passed onto the service provider’s client or customer.  (Note: CMS has released draft templates which we expect CMS to release final templates in the near future.)

You Need to Start Planning Now – IntegriChain’s Rapid Action Approach, Led by the Largest Government SME Team in the Industry 

We realize you may still be evaluating what this rule means to your business and how to best prepare and plan for this. We have already started working with clients to:

1. Assess current state and documentation against PFS Final Rule
2. Identify and summarize action plan and timeline
3. Assist with new documentation development in conjunction with your legal/compliance team for example:
   • ASP reasonable assumptions
   • FMV methodology
   • Certification/warranty

PFS Final Rule Summary

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What Pharma Manufacturers Need to Know for the CY 2026 Medicare Hospital Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center (ASC) Final Rule

The CY 2026 OPPS and ASC Final Rule (Final Rule) introduces several policy and operational changes with direct implications for drug manufacturers. Key provisions include Medicaid Drug Rebate Program (MDRP) enforcement as a condition for Medicare Part B coverage, updates to payment policy, and a hospital survey that may guide future rulemaking. These changes reflect CMS’s ongoing shift toward value-driven, cost-conscious reimbursement and operational transparency.

The Final Rule includes several provisions that may impact manufacturers: 

1. Medicare Part B Coverage is Tied to the Medicaid Drug Rebate Agreement:
   In an important enforcement move, CMS emphasizes that Medicare Part B will only cover a Covered Outpatient Drug if the manufacturer has entered into a Medicaid National Drug Rebate Agreement (NDRA). For impacted manufacturers without an NDRA, CMS advises “if a manufacturer immediately contacts CMS with the intent to enter into an NDRA, we will aim to maintain their separate payment for January 1, 2026. However, if a manufacturer does not enter promptly into an NDRA, then Medicare Part B payment will be stopped as discussed in this rule.”
   
   In the Final Rule, CMS provides a revised list of HCPCS codes for products where the manufacturer does not have an NDRA and risks losing Part B coverage:
   • Effective April 1, 2026, Part B payment may no longer be available for these products (products may be assigned a non-payable status indicator in the April 1, 2026 quarterly OPPS/ASC update).
   • For manufacturers that enter into an NDRA, “Medicare Part B payment will be reinstated retroactive to the date that the signed and completed NDRA has been received and accepted by CMS.”
   • The list of HCPCS codes for impacted products was updated from the CY 2026 OPPS and ASC Proposed Rule (Proposed Rule), indicating several manufacturers are now in compliance with the NDRA requirement. Impacted manufacturers choosing to continue Medicare Part B coverage must promptly inform CMS of their intent to execute a Medicaid NDRA and take immediate action to implement MDRP price calculation and reporting requirements, or risk losing access to Part B reimbursement entirely.
     
     
2. OPPS Drug Payment Policy Updates:
   CMS finalized routine updates to OPPS drug payment methodologies that may influence manufacturer reimbursement. Notably, the drug packaging threshold(the cost per day below which a drug is bundled or packaged into the procedure payment) increases to $140 in CY 2026, up from $135 in 2025. Drugs, biologicals, and therapeutic radiopharmaceutical products with a per-day cost at or below $140 will be packaged with no separate payment, whereas products above $140 remain separately payable at ASP + 6% (typically). For diagnostic radiopharmaceutical products, the packaging threshold increases to $655 in CY 2026, up from $630 in CY 2025. Manufacturers with products approaching these thresholds should evaluate the impact on reimbursement.
   
   
3. Skin Substitute Product Reimbursement Change:
   The Final Rule addresses ongoing debate regarding reimbursement for“skin substitutes” (i.e., wound care products), a category which has recently seen a significant increase in Medicare Part B spending. The Consolidated Appropriations Act of 2021 established the requirement for skin substitute manufacturers to report ASP beginning on January 1, 2022, with reimbursement based on ASP + 6% (typically). For 2026, CMS finalizes a significant change for both non-facility and hospital outpatient settings, where certain skin substitute products will receive separate payment under new Ambulatory Payment Classification (APC) groups as defined by their FDA regulatory approval pathway. CMS createsthree new APCs with a single initial payment rate, which would update annually through rulemaking based on the most recent quarter of ASP data, when available. CMS’s stated objective is to ensure a “consistent payment approach for skin substitute products across the physician office and hospital outpatient department settings.”
   
   
4. Hospital Survey:
   Despite significant pushback from hospitals, CMS is moving forward with its plans to conduct a nationwide hospital drug acquisition cost survey in Q1 2026 (OPPS Drug Acquisition Cost Survey), pending PMB approval. This survey will collect data on what hospitals pay for drugs. CMS is required by law to use survey data, when available, to adjust OPPS drug payment rates. If survey results show that hospitals acquire drugs at steep discounts (e.g., through 340B Drug Pricing Program), CMS could use this evidence in future rules to modify reimbursement formulas.

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CFO/Finance Critical Year End Considerations

Medicare Inflation Rebates – Part B and Part D channels are price protected

• Balance Sheet Reserve Analysis
• Part D (effective 10/1/22) and Part B (1/1/23).
• Preliminary invoices arrived in 2025. 
• Final invoices coming by 12/31/25. 
• Year End: Critical to review invoices and update accrual assumptions.

Part D Benefit Redesign

• Balance Sheet Reserve Analysis
• Coverage gap program is gone, and Medicare Drug Program (MDP) is here! 
• Majority of industry, especially higher priced drugs, is experiencing higher 2025 Medicare rebates and brand new GTN methodology approach is warranted. 
• Instead of the manufacturer owing 70% within the infamous and elusive ‘coverage gap’, manufacturers are now charged with 10% to 20% Medicare rebates on virtually ALL Medicare patient utilization, unless you qualify for the coveted ‘phase in’ status. 
• Year End: 1Q, 2Q, 3Q invoices are in and forecast assumptions should be analyzed for year end.

Physician Fee Schedule (PFS) Final Rule – Part B ASP Products

• Awareness 
• Effective immediately with transformational compliance deliverables due to the Gov’t by 4/30/26. 
• If finance has ownership of Government Pricing and Compliance, it is critical to get educated on this Final rule, which adds extensive Bona Fide Service Fees (BFSF)/Fair Market Value (FMV) and new requirements for 3^rd party certification, as well as newly mandated reasonable assumption submissions. 
• Year End: Timing of 3^rd party contracts before year may impact your business and awareness of this critical Final Rule drives a need for time sensitive action items in 1Q26. 

Medicare Negotiation

• Awareness 
• Imposed CMS-set ceiling price (MFP) that puts tremendous pressure on net revenue, driving the need for all products with Medicare utilization over $200M to re-analyze Payer/Provider strategy and economics during long term strategic planning exercises. 
• First 10 product MFPs are effective 1/1/26. A few products already reduced WAC and made transformational price and contract strategy decisions. 
• It is predicted that this will impact every drug in the US over $200M in Medicare spend by 2032. 
• Year End: Critical to simply put this on your long term, strategic planning list to understand when you may be selected and the potential strategic pricing, contracting and financial impacts.   

To learn more, visit IntegriChain.com or contact our Advisory team jsharpe@integrichain.com