Why MFP Changes Everything: Medicare Part B’s New Reality

CMS has confirmed that for negotiated Part B drug claims under Medicare, reimbursement will be based on 106% of the MFP, and CMS does not intend to publish a traditional ASP-based payment limit.

This 2026 Physician Fee Schedule (PFS) final rule introduced a critical downstream issue for commercial payers, hospitals, and provider groups, as many rely on ASP‑referenced contracts to reimburse HCP-administered drugs. In practice, if commercial allowable contracts with network providers remain anchored to ASP-based reimbursement, the impact on provider reimbursement may be partially mitigated. Manufacturers will still be required to submit ASP data, which serves as the basis for calculating the MFP rebate, meaning CMS will continue to have access to this underlying data. Moreover, without CMS publication of an ASP for IPAY drugs, stakeholders will need to navigate and account for this dynamic. In the absence of a published ASP, commercial payer adoption of MFP‑based reimbursement may accelerate.

For MFP eligible claims paid under Medicare Part B, should the manufacturer elect to pursue MFP effectuation retrospectively, purchasing groups (providers) will be reimbursed for the difference through a retrospective effectuation process by which the manufacturer is responsible for the MFP rebate to CMS, who then reconciles, and facilitates payments via the Medicare Transaction Facilitator (MTF), providing remuneration to the purchasing entity (providers).

However, providers will not receive any such remuneration for commercial claims, leaving the provider with minimal to negative net cost recovery (margin). Since the MFP rebate will also be subject to ASP calculations, a compounding issue forms over time, testing the solvency of physician-administered drug reimbursement.

What MFP Means in Practice  

The following simplified example illustrates how anchoring commercial reimbursement to MFP, without adjusting ASP add-ons, can rapidly erode provider margins.  

Medicare Part B Reimbursement Illustrative Example  

Implications for Beneficiaries  

Longstanding payer site-of-care preferences in provider network management are likely to strain, and an exacerbation of health system margin pressure may follow. As margins compress under MFP +6%, providers may reassess whether they can sustainably continue administering MFP-eligible drugs, accelerating shifts from office-based administration to hospital outpatient departments, specialty pharmacies, or alternative sourcing arrangements.

These shifts may affect current therapy, introduce access friction, increase administrative complexity, negatively impact the patient experience, and increase payer costs.

The IRA’s Part B MFP calculation and effectuation provisions are not a one-time pricing event. It represents not only a policy shift but a structural change in how care may be administered to Medicare and non-Medicare beneficiaries.

Recommendations for Manufacturers with Negotiated Part B Drugs

1. Reframe Pricing & Access Strategy Through Provider Reimbursement Lens

Manufacturers should proactively assess where reduced add‑on payments may change site‑of‑care behavior (e.g., buy‑and‑bill pullback, white‑bagging, or HOPD migration) and develop provider support, pricing, and distribution strategies that preserve access continuity and communicate potential unintended consequences with stakeholders

2. Prepare for ASP Instability, Commercial Benchmark Drift

As manufacturers engage with Commercial Payers, assessing how ASP as a commercial benchmark will evolve will be critical, especially if WAC remains unchanged. Manufacturers should also scenario‑plan for how payers will address network stability and site-of-care strategies, given the impact on provider reimbursement.

3. Anticipate Shifts in Utilization Management, Not Just Coverage

Negotiated pricing may reduce payer leverage in formulary exclusions, but it may increase scrutiny of utilization controls, site‑of‑care policies, and prior authorization criteria. Contrasting payer UM relative to provider preferences (i.e., order set, pathway) will create scenarios in which manufacturers should evaluate reliable access levers given economic sensitivity.

Prepare for an MFP-Driven Market With Precision AQ  

Precision AQ helps pharmaceutical manufacturers navigate structural shifts such as MFP by translating policy changes into a clear, actionable access strategy. Our value and access experts partner with teams to assess commercial risk, model provider and payer economics, and design solutions that address patient access across sites of care. Are you ready to pressure test your Part B strategy and prepare for an MFP‑driven market? Book a conversation with our team.