What are the GLOBE and GUARD Payment Models?
The GLOBE (Global Benchmark for Efficient Drug Pricing) and GUARD (Guarding U.S. Medicare Against Rising Drug Costs) models are two new mandatory payment initiatives from CMS. Released on December 22, 2025, they aim to lower drug costs by linking Medicare reimbursement rates to international prices (known as "Most-Favored Nation" or MFN pricing). GLOBE applies to Medicare Part B (clinic-administered drugs), while GUARD applies to Medicare Part D (retail pharmacy drugs).
Medicare has shaken up the Medical Billing Industry with its largest reimbursement change of this year.
December 22, 2025, was a big day for Medicare when the Centers for Medicare and Medicaid Services (CMS) released the final details regarding the two mandatory models that will dramatically alter the way practices are reimbursed for expensive medications. If you administer biologic medication, oncology medication or have another type of specialty medication within your practice, it appears there may be some changes in your revenue cycle.
The GLOBE and GUARD models are not optional. The GLOBE and GUARD models went into the Federal Register on December 23, 2025, and signify the end of the "traditional ASP + 6% formula" for several types of drugs.
Here is what you should understand now in order to help keep your practice's revenue safe.
The Breakdown: What Happened on Dec 22?
CMS announced that starting in 2026, Medicare will no longer strictly pay for certain drugs based on the Average Sales Price (ASP) reported by manufacturers. Instead, they are rolling out an International Reference Pricing (IRP) strategy.
In other words, Medicare will compare the price of the exact same medication in countries such as Japan, Germany, and the U.K., and if the U.S. has a price that is greater than the international average, Medicare will base its reimbursement rate on that international average.
In essence, CMS can either force manufacturers to reduce the price of their medications or require them to provide a rebate to CMS for overcharging Medicare. However, for medical billing companies, this adds a completely new level of complexity to calculating the reimbursement amount for your clients.
You can't just send in the J-code and expect the reimbursement to match the usual allowable because you have to calculate the allowable based on an entirely different pricing methodology.
1. The GLOBE Model (Medicare Part B)
Targeted Drugs: Physician-administered drugs (Part B).
Start Date: October 1, 2026.
The GLOBE Model is aimed at eliminating the "buy-and-bill" revenue model used by many physician offices today.
As it stands now, many physician office use the spread between the cost of the drug purchased and the reimbursement received by Medicare (the ASP +6%), to help fund administrative costs.
In contrast, under the GLOBE Model, CMS will establish a "most-favored nation" price, and if the U.S. price is $1000 and the international benchmark price is $600, Medicare’s reimbursement rate will drop to $600.
Why it matters for your billing staff:
- Reimbursement gaps: if the contract price of the drug in which you buy exceeds the globe benchmark for that drug, you will likely lose money on every injection you administer.
- Coding Changes: We are expecting CMS to assign a modifier or create new CPT/HCPCS codes to identify and report drugs purchased through the GLOBE pricing model.
- Denial Risks: Claims submitted to Medicare without properly documented cost invoicing or rebate reporting data may be denied immediately.
At human medical billing, we are currently working through these changes for our clients who perform oncology and rheumatology services so they can ensure that their drug purchase agreements reflect the expected reimbursement reductions.
2. The GUARD Model (Medicare Part D)
Target: High-cost retail and Specialty Drugs (Part D).
Effective Date: January 1, 2027.
GUARD is going to affect what patients are eligible for and what pharmacy benefits they can receive, while GLOBE is going to impact your bottom line at the practice level. This model requires that drug manufacturers provide rebates to payers for Part D drug prices above certain international benchmarks.
The impact on your practice:
- Chaos with Prior Authorizations: When payers update their formularies as part of the price caps mandated by this model, it is expected that payers will tighten prior authorization (PA) criteria to limit the number of drugs available to patients.
- Copays Confusing Patients: There will likely be dramatic changes in the amount that patients pay out-of-pocket for copays. Your front office personnel need to be prepared to tell patients why they now have to pay so much more for a particular medication than before.
Revenue Impacts: Will the "Spread Pricing" Model Disappear?
For many years, medical coding and billing departments have been able to rely on a consistent method for billing Part B drugs. The method is as follows: purchase the drug, assign a J-code, and collect an average sales price (ASP) +6%.
The GLOBE model is likely to reduce that 6% profit margin.
When GLOBE forces a reimbursement of drug prices down to the level of those charged internationally, there will be no remaining 'margin' to cover clinic costs including drug storage & handling as well as nurse time. Those practices which have not audited their current purchasing agreements against this new benchmark are going to suffer a loss of revenues.
Action Required: Immediately contact your Group Purchasing Organization (GPO) representatives and ask them how they intend to modify pricing when the GLOBE model becomes effective at the end of 2026.
How to Prepare Your Revenue Cycle
You will only have a short time to prepare for all of these new regulations, so it is best to start preparing your billing process as soon as possible.
- Audit high-cost drugs - Create a report with your top 20 J-code billed items and compare their US pricing to European pricing to identify which high cost drugs can be targeted by GLOBE (Global Pricing of Medicines).
- Update your fee schedule - Do not wait until October 2026 to update your fee schedule. As soon as you see what the changes are going to do to your allowable fee schedules, update them.
- Strengthen denial management - New reimbursement models will create new claim edits. The denial management service company that you use should be proactively identifying these specific rejection codes to prevent the buildup of denials.
How We Can Help
We are experts at navigating and working with all of the Federal Government's payment models. Our company, Human Medical Billing does more than simply submitting claims on behalf of you. We analyze the changing policies affecting your bottom line as well as the potential changes to your practice’s cash flow.
Need a provider credentialed for a new provider prior to the rush season? Or would you like us to work on cleaning up some old AR so you're prepared when the new rules go into effect? Our team is here to help. Using advanced AI medical billing tools we can identify the claims that may be subject to these new rebate structures. So you will receive what you have earned.
Interested in learning more about how we address complex compliance issues? Review our success stories to learn how we've been able to assist many other U.S. practices to achieve financial stability.
Contact Human Medical Billing to schedule a compliance readiness review or learn more about our end-to-end billing and regulatory support services.
