CMS Issues Proposed Guidance Governing Maximum Fair Price Effectuation For IPAY 2028, With A Focus On Part B Drugs

On July 16, 2026, the Centers for Medicare & Medicaid Services (CMS) issued proposed guidance (Proposed Guidance) regarding the “effectuation” of the maximum fair price (MFP) under the Inflation Reduction Act (IRA) Drug Price Negotiation Program (DPNP) for Initial Price Applicability Year (IPAY) 2028, the first year that Part B drugs will be subject to an MFP. Specifically, the guidance outlines the operational process that manufacturers will use to ensure that the MFP is made available to providers, suppliers, and beneficiaries. This is the first guidance addressing MFP effectuation for drugs covered under Medicare Part B. Consistent with the statute, IPAY 2028 is the last year for which CMS may implement the DPNP through program guidance. Comments on the Proposed Guidance are due September 18, 2026.

The Proposed Guidance largely continues CMS’s existing policies for IPAYs 2026 and 2027 regarding MFP effectuation for selected Part D drugs. However, the Proposed Guidance introduces several new policies addressing MFP effectuation for drugs covered under Part B, including proposals to address MFP eligibility validation under both Original Medicare (OM) Part B and Medicare Advantage (MA) and the calculation of the standard default refund amount for selected drugs under Part B.

The Proposed Guidance follows CMS’s IPAY 2029 proposed rule, issued in June, which for the first time proposed to establish through notice-and-comment rulemaking policies for the DPNP, including the selection process and negotiation of the MFP.

Additional documents relevant to this alert are as follows:

• CMS’s fact sheet
• CMS’s press release
• Our alert on the IPAYs 2029 and later Proposed Rule
• Our alert on the IPAY 2028 Final Guidance
• The relevant text of the IRA

As always, it is important that you carefully review the proposed guidance to identify issues relevant to your organization as well as possible opportunities to comment. We will monitor the implementation of all final guidance and rules that CMS issues with respect to the DPNP.

MFP effectuation

• Role of the Medicare Transaction Facilitator (MTF).
  • IPAYs 2026 and 2027 Final Guidance: The MTF is responsible for data and payment facilitation, through two separate contractors, with respect to selected Part D drugs. The MTF—via the MTF Data Module (MTF DM)—will facilitate the exchange of data between manufacturers and dispensing entities for verifying a given dispensed prescription's eligibility for the MFP. The MTF PM allows for the pass through of manufacturer funds to dispensing entities to facilitate payment of MFP-based refunds.
  • Proposed IPAY 2028 Guidance: Key changes to MFP effectuation under Part B are driven by added operational complexity on the Part B side. CMS intends for an MTF to facilitate both data and payment exchange for selected drugs payable under Part B. Starting in 2028, the MTF DM would serve a similar purpose for selected drugs payable under Part B, and the MTF PM would also be available for Part B drugs.
    • CMS notes that extending MTF functionality to Part B claims presents added complexity relative to Part D because Part B providers may be paid either directly under OM or by MA organizations under distinct administrative and payment frameworks. CMS intends to use MA encounter data as the source of claim-level data elements for Part B claims furnished or administered to individuals enrolled in MA and is soliciting comments on approaches to address this operational complexity.
    • CMS also indicates that although it has not yet required stakeholders to pay a fee in order to participate in the MTF PM, and will not do so for IPAY 2028 either, CMS is considering user or transaction fees in the future and seeks feedback on this issue.
• MFP payment mechanism.
  • IPAYs 2026 and 2027 Final Guidance:Manufacturers may provide access to the MFP either prospectively to the dispensing entity (i.e., as an up-front discount) or retrospectively (i.e., as an after-the-fact rebate/refund). Manufacturers must maintain certain documentation illustrating that they made the MFP available, including if through an alternative payment arrangement with a dispensing entity outside of the MTF.
    • Dispensing entities may self-identify as anticipating "material challenges because of potential delays created by reliance on retrospective MFP refunds within the 14-day prompt MFP payment window," and manufacturers must develop a process for mitigating material cashflow concerns for dispensing entities in their MFP effectuation plans.
  • Proposed IPAY 2028 Guidance: No significant changes. CMS proposes to align the Part B MFP payment mechanism with the Part D process. Consistent with Part D, manufacturers would be required to provide access to the MFP either prospectively or retrospectively.
    • CMS also states that the transmission of payment from the manufacturer through to the dispensing entity or provider “shall not in any way indicate or imply that CMS or its MTF Contractors have evaluated or determined that the amount paid by the Primary Manufacturer is sufficient to make the MFP available to the dispensing entity and/or Part B provider. Additionally, the receipt of the MFP refund payment by the dispensing entity and/or Part B provider (either electronically or via paper check) does not constitute the dispensing entity and/or Part B provider’s agreement that access to the MFP has been provided by the Primary Manufacturer.”
• Manufacturer MTF participation.
  • IPAYs 2026 and 2027 Final Guidance: Participation in the MTF DM is mandatory for manufacturers. Participation in the MTF PM is voluntary, provided the manufacturer and the dispensing entity “establish a mutually agreed-upon method for effectuating the MFP outside of the MTF PM.” Manufacturers with MFPs for IPAY 2027 and IPAY 2028 must register with the MTF DM by April 1 of the calendar year before the MFP would go into effect. Manufacturers are required to sign user agreements to participate in the MTF; manufacturers that elect to participate in the MTF PM also sign a MTF PM user agreement. CMS addressed specific circumstances that may arise, including if a manufacturer transfers ownership of a selected drug, impacts of terminating participation in the DPNP with respect to a selected drug, and adding selected drugs to the user agreement if a manufacturer has multiple selected drugs for one or more IPAYs, among others.
  • Proposed IPAY 2028 Guidance: CMS intends to implement an addendum to MTF agreements with respect to MFP effectuation for selected drugs payable under Part B. CMS anticipates conducting technical calls and other engagement with manufacturers, as well as dispensing entities and Part B providers, that will include system testing and onboarding. Manufacturers with MFPs for IPAY 2028 would be required to register with the MTF DM by May 1 of the calendar year before the MFP would go into effect. Additionally, “CMS intends to establish an addendum to the MTF agreements for Primary Manufacturers of selected drugs payable under Part B,” with further details to “be provided in future guidance or technical instructions.”
• Dispensing entity/provider MTF participation.
  • IPAYs 2026 and 2027 Final Guidance:
    • MTF DM participation is mandatory for dispensing entities. CMS finalized in rulemaking the requirement that Part D plan sponsors include provisions in their pharmacy agreements requiring pharmacies to be enrolled in the MTF DM. Dispensing entities are required to sign an MTF DM user agreement with CMS during the enrollment process and provide information that would allow for payment through the MTF PM or outside of the MTF PM.
    • With respect to the MTF PM, if the Primary Manufacturer participates in the MTF PM and transmits MFP refund payments to the MTF PM to be passed through to the dispensing entity, then the MTF PM will pass through the payment to the dispensing entity. However, this does not preclude a dispensing entity from reaching an outside agreement with a Primary Manufacturer for a separate arrangement to pay MFP refunds outside of the MTF PM.
  • Proposed IPAY 2028 Guidance: CMS encourages Part B provider enrollment in the MTF DM but is not yet proposing to require it.
    • With respect to the MTF DM, CMS “strongly encourages Part B provider enrollment . . . and is considering potential regulatory options to require Part B provider enrollment,” but Part B providers will not be required to participate in 2028. CMS outlined options for requiring Part B provider enrollment. CMS described a potential regulatory requirement that “would require any contract between an MA organization and a provider, or between a first tier, downstream, or related entity and a provider on the MA organization’s behalf for participation in one or more of the MA organization’s networks to include a provision requiring that if the provider furnishes or administers selected drugs payable under Part B, during the period when such drugs are subject to an MFP, the provider must be enrolled in the MTF DM,” which is similar to the mechanism for dispensing entity participation in the MTF DM under Part D. Additionally, “CMS is considering making updates to the MTF DM User Agreement as necessary to account for Part B providers and intends to provide stakeholders with more information prior to beginning MTF DM Part B provider enrollment” and facilitating such enrollment through the Provider Enrollment, Chain, and Ownership System (PECOS).
    • With respect to the MTF PM, similar to Part D MFP effectuation, if the Primary Manufacturer participates in the MTF PM and transmits MFP refund payments to the MTF PM to be passed through to the Part B provider, then the MTF PM will pass through the payment to the Part B provider. However, this does not preclude a Part B provider from reaching an outside agreement with a Primary Manufacturer for a separate arrangement to pay MFP refunds outside of the MTF PM.
    • CMS intends to issue a revised MTF ICR this summer for a 60-day comment period.
• Data requirements.
  • IPAYs 2026 and 2027 Final Guidance: CMS adopted a list of required data elements to be exchanged between the manufacturer and the MTF DM, including claim-level data elements to support verification of the claim as MFP-eligible, claim-level payment data elements to confirm whether and how the manufacturer made the MFP available, data elements to support a manufacturer with identifying 340B-eligible claims, and additional elements to support the MTF PM. CMS included new claim-level data elements that manufacturers would receive from the MTF DM, including information about the previously paid MFP refund (if any), if an adjustment to a previously addressed claim is made, and dispensing entities' preference for electronic or paper payment (if specified). CMS also modified the mandatory payment elements manufacturers must submit, such as by requiring the manufacturer to update the “Transaction Code” from the claim-level data elements provided to the manufacturer and include an indication of the dispensing entity's MTF DM enrollment status.
  • Proposed IPAY 2028 Guidance: CMS proposes different data elements but no significant policy changes. CMS’s Part D claim-level data elements are largely consistent with the prior Final Guidance, but CMS proposes a slightly different set of claim-level data elements for Part B selected drugs. In addition to information about the previously paid MFP refund and other information required for Part D claims, the Part B claim-level data elements include additional information to verify MFP eligibility (e.g., Medicare source of coverage, Medicare beneficiary identifier, Healthcare Common Procedure Coding System (HCPCS) code), beneficiary identifying information, and certain HCPCS modifier codes, including the JW and TB modifiers used to identify 340B units for Part B purposes.
• The 14-day MFP prompt payment window.
  • IPAYs 2026 and 2027 Final Guidance: The 14-day prompt MFP payment window starts with the transmission of the claim-level data by the MTF to the manufacturer and ends with the transmission of the payment information by the manufacturer to the MTF DM. Manufacturers must transmit the MFP refund amount within 14 days. Where the MFP payment amount is made available prospectively or outside of the MTF PM, the manufacturer is still expected to submit claim-level payment elements to the MTF DM within the 14-day prompt MFP payment window.
  • Proposed IPAY 2028 Guidance: No significant changes. Consistent with the prior Final Guidance, CMS intends to require the same 14-day timeframe for selected drugs payable under Part B as for selected drugs covered under Part D.
• Identifying MFP eligible claims. 
  • IPAYs 2026 and 2027 Final Guidance:
    • Drug Data Processing System (DDPS) data validation edits related to MFP-eligibility must be resolved before the MTF DM transmits to the manufacturer the validated claim-level data elements to initiate the 14-day prompt pay window. CMS maintains a list of DDPS edits related to the determination and verification of MFP eligibility and will wait and monitor for resolution of those edits before sending any claims through the MTF DM to the manufacturer, relying on existing procedures for doing so.
    • Where DDPS edits are not resolved within 90 days of the rejection by the MTF DM and a manufacturer participates in the MTF PM, CMS will notify dispensing entities that no refund payment has been paid for the claim through a remittance. Where a manufacturer does not participate in the MTF PM, the MTF DM will transmit the claims data elements to the manufacturer, but the 14-day prompt payment window will not be triggered. The manufacturer may notify the dispensing entity that no payment was made, but it is not obligated to.
  • Proposed IPAY 2028 Guidance: CMS proposes options for validating whether a Part B claim is MFP-eligible and distinct effectuation requirements for OM and MA. For Part D drugs, which are billed by National Drug Code (NDC), CMS can validate whether a claim is MFP eligible by reference to the specific NDC dispensed to the Medicare patient. Part B drugs, in contrast, are billed using a HCPCS code, which can reference multiple distinct NDCs for a given selected drug. Moreover, during an IPAY where a generic drug has launched but the MFP remains in effect, a HCPCS code can refer both to the NDCs of the selected drug as well as its generic competitor. For that reason, CMS is considering three different options for identifying whether a claim for a given HCPCS code is MFP-eligible:
    1. Requiring Part B providers to report a JM modifier for selected drugs and a JN modifier for non-selected drugs,
    2. Requiring Part B providers to report NDC-11s on all claims, or
    3. Creating distinct HCPCS codes for all selected drugs (including non-biological products).

  CMS is further considering adding rulemaking in the future to port these requirements over to MA plans.

  In addition, CMS is proposing the following measures to verify eligibility for the MFP across OM and MA:

  • With respect to claims paid under OM, and in contrast to the DDPS validation process for Part D claims described previously, Part B claims are validated by CMS directly. CMS proposes to transmit the claims level data to the MTF DM for further validation to confirm the HCPCS code and NDC-11 (if option (2) is adopted above) matches a selected drug, as well as any appropriate modifiers. Certain claims data would be passed to the MTF DM once determined eligible for payment. Changes to the claim after the initial determination as to eligibility for reimbursement, and eligibility for the MFP, would be effectuated through the credit/rebill process.
  • With respect to claims paid under MA, CMS proposes to use certain elements of the encounter data it already receives from MA plans, and which are validated by those plans before the plan reimburses the provider. Those elements would then be transmitted to manufacturers via the MTF DM. CMS will perform some additional validation to confirm that the claim is for an MFP-eligible individual. Further, CMS is considering requiring MA encounter data for selected drugs to be submitted to CMS on a shorter timeline; CMS notes that currently, 85 percent of MA plans take 60 days to validate claims. Finally, CMS considered two alternative approaches to MFP effectuation for MA claims, including having MA plans submit data directly to manufacturers or to the MTF DM.
• MFP payment amount.
  • IPAYs 2026 and 2027 Final Guidance: CMS finalized a “Standard Default Refund Amount” (SDRA) equal to the difference between Wholesale Acquisition Cost (WAC) and MFP on the date of dispensing. Manufacturers remain responsible for determining whether to refund a different amount if appropriate to make the MFP available. The MTF DM will issue a receipt file to participating manufacturers confirming receipt and processing of claim-level payment data and successful MFP refund status. If a Primary Manufacturer is unable to transmit claim-level payment data (e.g., due to technical issues), it must continue good-faith transmission attempts until successful and maintain documentation of those efforts. CMS will not float or issue funds to dispensing entities on behalf of manufacturers in anticipation of future MFP refunds and has outlined procedures for manufacturer termination from the MTF PM or transfer of drug ownership.
  • Proposed IPAY 2028 Guidance: CMS proposes options for calculating the SDRA under Part B.  Consistent with the prior Final Guidance, for Part D drugs CMS will continue to calculate a SDRA equal to the difference between WAC and MFP on the date of dispensing. For drugs payable under Part B, CMS is proposing four different options for the SDRA, which depend in part on which of the three options CMS finalizes above as to confirming MFP-eligibility for a given claim:
    • Option 1a: Average WAC across NDC-11s of selected drug as published in pharmaceutical pricing database compendia at the time the calculation is determined, weighted by Average Sales Price (ASP) sales volume as reported in the ASP Data Collection System
    • Option 1b: WAC for each NDC-11 as published in pharmaceutical pricing database compendia as of the “Claim From Date” of the Part B claim
    • Option 2a: Average ASP across NDC-11s of selected drug, weighted by ASP sales volume as reported in the ASP Data Collection System
    • Option 2b: Average ASP across NDC-11s of selected drug as reported in the ASP Data Collection System, weighted by Part B claims volume

CMS is also considering posting the SDRAs in a public file that it would update quarterly for selected drugs payable under Part B and would include their HCPCS code and the calculated SDRA.

• Manufacturer MFP effectuation plans.
  • IPAYs 2026 and 2027 Final Guidance: CMS set the plan submission deadline at four months before the start of the IPAY for the selected drug—September 1, 2025, for IPAY 2026—and indicated it will not make manufacturer effectuation plans public. Instead, redacted versions of the plans will be accessible to dispensing entities through the MTF DM.
    • Starting with IPAY 2027, CMS split the MFP effectuation plan into two submissions. The first section contains: (i) the manufacturer's election of whether or not to use the MTF PM; (ii) the manufacturer's communication plan; (iii) the manufacturer's approach to dispensing entities who indicate they anticipate having material cashflow concerns at the start of the IPAY; and (iv) information about the manufacturer's plan if it does not elect to use the MTF PM. The second section contains all remaining information required in the manufacturer's MFP effectuation plan.
    • The two sections must be submitted to the MTF DM by June 1 and September 1 of the calendar year before the MFP goes into effect. CMS did not include detailed information on MFP effectuation plans for selected drugs under Part B.
    • Upon receiving the plans for making MFP available from manufacturers, CMS will conduct a risk assessment for each submission using risk assessment criteria, and manufacturers with plans that are identified as having a “greater risk of failing to make the MFP consistently available will be subject to increased scrutiny through CMS’s monitoring and oversight activities.”
    • CMS also intends to provide access to the manufacturer plans, after redacting proprietary information, through the MTF user interface to dispensing entities, and CMS may release these redacted plans to other interested parties (e.g., supply chain entities) upon request.
  • Proposed IPAY 2028 Guidance: No significant changes. CMS adopted similar requirements for these plans for selected drugs under Part B.
• Disputes.
  • IPAYs 2026 and 2027 Final Guidance: CMS established a centralized intake system to address complaints and disputes related to MFP availability and MTF functionality. The system contains two “tracks,” one for disputes initiated by manufacturers or dispensing entities, i.e., “specific, identifiable challenge to a technical aspect of the MTF system and process,”and one for complaints, i.e., anything that is not a dispute, which is available to the public as well as manufacturers and dispensing entities. Complaints and disputes must be submitted no later than 120 calendar days from the date of the subject of the complaint or dispute.
    • The 14-day prompt MFP payment window is not tolled for a claim in dispute, and the initiation of a dispute does not alter a manufacturer's obligations to make the MFP available to the dispensing entity or to transmit claim-level payment elements within that window. Resolution of a dispute leading to a reversal or adjustment of the MFP refund will be addressed through the MTF PM credit/debit ledger system if the manufacturer is enrolled in the PM, and, if that is not the case, by a method agreed upon by the manufacturer and the dispensing entity.
    • CMS provided additional information about the operational steps it will take after a complaint or dispute is submitted, including details regarding its initial review triage and prioritization process.
  • Proposed IPAY 2028 Guidance: No significant changes. CMS clarified that its approach to complaints and disputes is the same for both Part B and Part D selected drugs. CMS, however, is soliciting comments on necessary changes in its approach “for effective complaint and dispute resolution with respect to Part B claims” (e.g., whether the 120-calendar day deadline described above is sufficient for Part B claims). CMS also added additional detail on how the credit/debit process would work.
• MFP/340B deduplication guidance.
  • IPAYs 2026 and 2027 Final Guidance: CMS will not assume responsibility for "deduplicating" the MFP and 340B ceiling price, indicating that it is the manufacturer's responsibility to resolve any MFP-340B duplication outside of the MTF process and to detail its deduplication process in the MFP effectuation plan. Information about a manufacturer's nonduplication process will be collected solely for use by CMS and will not be made public.
    • Beginning January 1, 2025, the “Submission Clarification Code” value of “20” and the “Submission Type Code” value of “AA” were added to the PDE record to indicate a 340B claim. CMS permitted dispensing entities to voluntarily report these indicators to the MTF via a “340B Claim Indicator” data element to identify 340-eligible claims. CMS declined to establish a clearinghouse to collect 340B claims data but reiterated it would continue to explore the feasibility of incorporating 340B transactional data from covered entities or their TPAs into MTF processes, including asynchronous 340B data in MFP validation procedures. CMS acknowledged HRSA's “340B Rebate Model Pilot Program” but noted the program is outside the scope of this guidance. Hogan Lovells published a client alert on the HRSA Rebate Model Pilot Program, available here.
  • Proposed IPAY 2028 Guidance: No significant changes. CMS extended its 340B/MFP deduplication provisions to Part B providers. CMS continues to decline responsibility for 340B/MFP deduplication and reiterated that it is the manufacturer's responsibility to resolve MFP-340B duplication. For Part B claims, CMS notes that “Part B providers that are [340B] covered entities are required to report a 340B modifier on OM claim lines for separately payable Part B drugs and biologicals acquired through the 340B Program” (i.e., the modifiers noted previously), and the MTF would pass along this modifier data to manufacturers. CMS is also considering a regulatory requirement for MA organizations to submit 340B modifiers in encounter data to identify drugs purchased under the 340B Program.
• MFP-eligible individuals in 2026, 2027, and 2028.
  • IPAYs 2026 and 2027 Final Guidance: For IPAYs 2026 and 2027, CMS indicated that manufacturers need only provide access to the MFP for drugs dispensed to an MFP-eligible individual at a pharmacy, mail order service, or other dispensing entity with respect to individuals enrolled in a Part D plan or in a Medicare Advantage Prescription Drug (MA-PD) plan under Part C.
  • Proposed IPAY 2028 Guidance: No significant changes but CMS offers clarification on MA coinsurance. Beginning in IPAY 2028, for drugs selected for IPAY 2028 or with a renegotiated MFP for IPAY 2028, manufacturers must provide access to the MFP to Part B providers with respect to MFP-eligible individuals, including individuals enrolled in MA plans. CMS stated that “when an MA plan uses coinsurance, the dollar amount of in-network coinsurance for selected drugs payable under Part B for individuals enrolled in MA plans must be calculated based on a price no more than the MFP.” Additionally, as noted in the Data Requirements section, CMS proposes the submission of certain Part B claim-level data elements including beneficiary identifying information.

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