Locality Adjustment

50.1 - Locality Adjustment (Rev. 268: Issued; 02-14-20: Effective; 01-01-20: Implementation: 03-16-20) Section 1834(w)(2) of the Act, as added by section 2005(c) of the SUPPORT Act, provides that the Secretary may implement the bundled payment for OUD treatment services furnished by OTPs through one or more bundles based on the type of medication provided, the frequency of services, the scope of services furnished, characteristics of the individuals furnished such services, or other factors as the Secretary determines appropriate. The cost for the provision of OUD treatment services, like many other healthcare services covered by Medicare, will likely vary across the country based upon the differing cost in a given geographic locality. Therefore, a geographic locality adjustment will be applied to the bundled payment rate for OUD treatment services as described below: A. Drug Component Because pricing for the MAT drugs included in the bundles reflects national pricing, and because there is no geographic adjustment faction (GAF) applied to the payment of Part B drugs under the ASP methodology, there will not be any geographic adjustment to the drug component of the bundled payment rates. B. Non-Drug Component The GAF will be applied to: • the non-drug component of the OTP bundled payment for OUD treatment, and • the add-on payment adjustments for non-drug services.