Medicare Part B Drug Average Sales Price

CMS Town Hall on the Discarded Drug Refund Policy

CMS is hosting a town hall to gather input from interested parties on important aspects of the Part B discarded drug refund policy implementing Section 90004 of the Infrastructure Investment and Jobs Act (Pub. L. 117-9). This event will focus on unique circumstances that may justify an increased applicable percentage, which is used to determine the portion of certain charges that must be refunded by manufacturers to CMS based on the total discarded amount of such drug in a given calendar quarter.

The town hall will be conducted via Zoom on Wednesday, February 1 and Thursday, February 2, 2023 from 12:00 PM to 5:00 PM EST.

Please register in advance for the town hall.

Temporary Increase in Medicare Part B Payment for Certain Biosimilar Biological Products

Under section 11403 of the Inflation Reduction Act, Medicare payment for certain biosimilar biological products is required to be the average sales price (ASP) plus 8 percent (rather than 6 percent) of the ASP of the reference biological for a 5 year period defined in the statute. For existing qualifying biosimilar biological products for which payment was made using ASP as of September 30, 2022, the applicable 5-year period begins on October 1, 2022. For new qualifying biosimilar biological products for which payment is first made using ASP between October 1, 2022 through December 31, 2027, the applicable 5-year period begins the first day of the calendar quarter of such payment. A qualifying biosimilar biological product is defined as a biosimilar with an ASP that is not more than the ASP of the reference biological.

In accordance with these provisions, the ASP Drug Pricing File reflects the temporary increased amount for qualifying biosimilar biological products for a period of 5 years beginning with the October 2022 file.

Manufacturer reporting of Average Sales Price (ASP) data

Section 401 of the Consolidated Appropriations Act (CAA), 2021 amended section 1847A of the Social Security Act (the Act) to add new section 1847A(f)(2) of the Act, which requires manufacturers without a Medicaid drug rebate agreement to report average sales price (ASP) information to CMS for calendar quarters beginning on January 1, 2022, for drugs or biologicals payable under Medicare Part B and described in sections 1842(o)(1)(C), (E), or (G) or 1881(b)(14)(B) of the Act, including items, services, supplies, and products that are payable under Part B as a drug or biological. This is discussed in further detail in the Physician Fee Schedule 2022 Final Rule.

Such manufacturers should first report ASP data to CMS for calendar quarters beginning on January 1, 2022. As stated in 42 CFR § 414.804 (which is based on statutory language), the “manufacturer's average sales price must be calculated by the manufacturer every calendar quarter and submitted to CMS within 30 days of the close of the quarter.” Therefore, manufacturers first reporting ASP data to CMS in accordance with provisions in section 401 of the CAA, 2021 should do so no later than April 30, 2022 (within 30 days of the close of the first quarter of 2022) for the July 2022 ASP Drug Pricing File.

For instructions regarding ASP reporting, please see the Medicare Part B Drug ASP User Manual, Tips for Successful ASP submission, and visit https://portal.cms.gov to register for the online portal system. Other helpful links are available below.

CMS is reaching out to manufacturers with the letter below included in the download section. The letter is titled Manufacturers Reporting Requirements Under the Consolidations Appropriations Act (CAA) 2021.

Reporting of products in the ASP portal should be consistent with product information on publicly available sources, including FDA approved labels and manufacturers' public websites. 

Because some products that are required to report ASP are not assigned 11-Digit National Drug Codes (NDCs), when reporting alternate IDs into the ASP portal (i.e., Stock Keeping Number (SKN), catalog number or other alternate ID’s) please be sure that the identifier is consistent with the identifiers that are published on the manufacturer’s public website.  This will ensure more accurate and verifiable ASP reporting for products reporting ASP with an alternate ID.   

Manufacturers must report average sales price (ASP) information to CMS within 30 calendar days of the close of the quarter. Please refer to the below rubric for the quarterly submission window.

 

Close of the Quarter

Close of the Submission Window

First Quarter of 2023

March 31, 2023

Sunday, April 30, 2023

Second Quarter of 2023

June 30, 2023

Sunday, July 30, 2023

Third Quarter of 2023

September 30, 2023

Monday, October 30, 2023

Fourth Quarter of 2023

December 31, 2023

Tuesday, January 30, 2024

Determination of ASP for Certain Self-administered Drug Products

Section 405 of the Consolidated Appropriations Act, 2021 requires the Department of Health and Human Services (HHS) Office of the Inspector General (OIG) to conduct periodic studies on certain self-administered drugs or biologicals that are paid under the statutory payment limit, and permits CMS to apply a “lesser-of” methodology to the ASP calculation, if deemed appropriate. The Medicare payment amount for the drug or biological billing code would be the lesser of (“lesser of” methodology): (1) the payment limit determined using the current ASP+6% methodology, or (2) the ASP+6% amount obtained by excluding the self-administered products identified an OIG study.

Section 405 also requires that beginning July 1, 2021, the ASP-based payment for billing codes that include certain self-administered products identified in a July 2020 OIG report (available at https://oig.hhs.gov/oei/reports/OEI-BL-20-00100.asp) be calculated using the “lesser of” methodology. This report identified certain versions of Orencia® and Cimzia®.

Beginning in the July 2021 ASP Drug Pricing File, CMS has applied the lesser-of methodology to the payment limit calculations for billing and payment codes representing certolizumab pegol and abatacept (J0717 and J0129, respectively) and a notation of the lesser-of methodology has been included in the ASP Pricing File.

HCPCS Codes for Which ASP Reporting Is Done in Units of Measure Other Than an NDC

A list of drugs that must be reported in units other than NDCs is posted in the Downloads section. More information is available in the 2012 physician fee schedule final rule (76 FR 73296-8, November 28, 2011).

Medicare Contractor Reporting Template for Medicare Part B Drugs - (Located in the "Downloads" section below)

As indicated in CR 4140, dated February 15, 2006, Medicare contractors shall use the Medicare Contractor Reporting Template for Part B drugs to report information on all Medicare Part B drugs not paid on a cost or prospective payment basis when payment limits are not listed in the quarterly drug pricing files, or in the OPPS Pricer. Contractors shall also use the template to report pricing information for the NOC drug billing codes. This information must be sent to CMS on a monthly basis to e-mail address: sec303aspdata@cms.hhs.gov.

Information Regarding Medicare Payment and Coding for Drugs and Biologics (See Downloads section below for additional information)

Section 303(c) of the Medicare Modernization Act of 2003 (MMA) revised the payment methodology for Part B covered drugs that are not paid on a cost or prospective payment basis. In particular, section 303(c) of the MMA amended Title XVIII of the Act by adding section 1847A, which established a new average sales price (ASP) drug payment system.  Beginning January 1, 2005, drugs and biologicals not paid on a cost or prospective payment basis will be paid based on the ASP methodology, and payment to the providers will be 106 percent of the ASP.  There are exceptions to this general rule which are listed in the Medicare Claims Processing Manual, Pub. 100-04, Chapter 17.  The ASP methodology uses quarterly drug pricing data submitted to the CMS by drug manufacturers.  CMS will supply contractors with the ASP drug pricing files for Medicare Part B drugs on a quarterly basis.

Newly Approved Drugs and Biologicals

The Affordable Care Act amends the Public Health Service Act (PHS Act) to create an abbreviated licensure pathway for biological products that are demonstrated to be “biosimilar” to or “interchangeable” with a Food and Drug Administration (FDA)-licensed biological product. CMS will incorporate biosimilars that are approved under the abbreviated biological approval pathway into the Average Sales Price payment methodology, and issue additional guidance as necessary. Questions and answers can be found in MLN Matters® Special Edition Article SE1509 (PDF).

New ASP Data Collection System

The ASP Data Collection System began collecting Average Sales Price data for Part B drugs on April 1, 2019. Please visit https://portal.cms.gov to register for the system. The ASP Data Collection System User Guide can be found in the links below as well as the new data templates that must be used within the system.

If you have questions, please contact asphelpdesk@dcca.com. Thank you for you cooperation.

 

Page Last Modified:
01/31/2023 03:48 PM