ASP Regulations & Policy

Payment Policy for Drugs and Biologicals under Medicare Part B

Section 303(c) of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA) (Pub. L. 108-173) amended Title XVIII of the Social Security Act (the Act) by adding new section 1847A. This section established the use of the average sales price (ASP) methodology for payment for drugs and biologicals described in section 1842(o)(1)(C) of the Act furnished on or after January 1, 2005. For calendar quarters beginning on or after January 1, 2004, section 1927(b)(3)(A)(iii)(I) of the Act requires manufacturers to report manufacturer's ASP data to CMS for drugs or biologicals payable under Medicare Part B and described in sections 1842(o)(1)(C), (D), (E), or (G) or 1881(b)(14)(B) of the Act with a Medicaid drug rebate agreement.  

Section 401 of Division CC, Title IV of the Consolidated Appropriations Act, 2021 (CAA) (Pub. L. 116-260) amended section 1847A of the Act to add new section 1847A(f)(2) of the Act, which requires manufacturers without a Medicaid drug rebate agreement to report 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.

Policy References

Statutes 

List of statutory references relating to Medicare Part B Drug payment methodology and ASP reporting. This is not an all-inclusive list. 

SSA Reference	Description
Section 1842(o)	Reimbursement for drugs and biologicals
Section 1847A	Use of average sales price payment methodology
	Section 1847A(h): Refund for certain discarded single-dose container or single-use package drugs
	Section 1847A(i): Rebate by manufacturers for single source drugs and biologicals with prices increasing faster than inflation
Section 1847B	Competitive acquisition of outpatient drugs and biologicals.  Note: this has been on hold since 2009.  See https://www.cms.gov/medicare/payment/fee-for-service-providers/competitive-acquisition.
Section 1927(b)(3)(A)(iii)	Requirement for manufacturers with a Medicaid drug rebate agreement to report average sales price (ASP) information to CMS.

Regulations 

CFR Reference	Description
42 CFR 410.57	Preventive vaccines
42 CFR 410.63	Hepatitis B vaccine and blood clotting factors
42 CFR 414 Subpart I (§ 414.700 – 414.707)	Payment for Drugs and Biologicals
42 CFR 414 Subpart J (§ 414.800 – 414.806)	Submission of Manufacturer’s Average Sales Price Data
§ 414.800	Purpose
§ 414.802	Definitions
§ 414.804	Basis of payment
§ 414.806	Penalties associated with misrepresentation and the failure to submit timely and accurate ASP data
42 CFR 414 Subpart K  (§ 414.900 – 414.940)	Payment for Drugs and Biologicals under Part B
§ 414.900	Basis and Scope
§ 414.902	Definitions
§ 414.904	Average sales price as the basis for payment
§ 414.940	Refund for certain discarded single-dose container or single-use package drugs
42 CFR 414 Subpart L (§ 414.1000 – 414.1001)	Supplying and Dispensing Fees

Rules

Below is a list of some recent rules issued by CMS regarding payment for Part B drugs.  This list is not an all-inclusive list. 

Rule	Topics Related to Medicare Part B Drugs
CY 24 PFS FR	• Payment for drugs under Medicare Part B during an initial period • Temporary increase in Medicare Part B payment for certain biosimilar biological products • Inflation-adjusted beneficiary coinsurance and Medicare payment for Medicare Part B rebatable drugs • Limitations on monthly coinsurance and adjustments to supplier payment under Medicare Part B for insulin furnished through durable medical equipment • Request for information: Drugs and biologicals which are not usually self-administered by the patient • Requiring manufacturers of certain single-dose container or single-use package drugs to provide refunds with respect to discarded amounts • In-home additional payment for administration of COVID-19 vaccines
CY 23 PFS FR	• Requiring manufacturers of certain single-dose container or single-use package drugs to provide refunds with respect to discarded amounts • Medicare Part B payment for preventive vaccine administration services
CY 22 PFS FR	• Requiring certain manufacturers to report drug pricing information for Part B (section 401 of the CAA, 2021) • Determination of ASP for certain self-administered drug products (section 405 of the CAA, 2021) • Comment solicitation for Medicare Part B payment for drugs approved through the pathway established under section 505(b)(2) of the Federal Food, Drug, & Cosmetic Act
CY 21 PFS FR	• Medicare Part B payment for drugs approved through the pathway established under section 505(b)(2) of the Federal Food, Drug, & Cosmetic Act
CY 19 PFS FR	• Application of an add-on percentage for certain wholesale acquisition cost (WAC)-based payments
CY 18 PFS FR	• Payment for biosimilar biological products under section 1847A of the Act • Part B drug payment: Infusion drugs furnished through an item of durable medical equipment
CY 16 PFS FR	• Payment for biosimilar biological products under section 1847A of the Act

Additional Guidance

 This list is not an all-inclusive list.

• Discussion of how the terms “single source drug,” “multiple source drug,” and “biological product” in the context of payment under section 1847A have been operationalized (PDF)
• Part B Average Sales Price (ASP) Data Reporting Guidance: Clarification on Medicaid Drug Rebate Program “Multiple Best Prices” Reporting Option (PDF)

Frequently Asked Question Resources

This list is not an all-inclusive list.

• Biosimilars Temporary Payment Increase (PDF)
• Discarded Drugs and Biologicals – JW Modifier and JZ Modifier Policy (PDF)

Manuals

This list is not an all-inclusive list.

• Medicare Claims Processing Manual Chapter 17 – Drugs and Biologicals (PDF)
• Medicare Benefit Policy Manual Chapter 15 – Covered Medical and Other Health Services (PDF)

Archive Documents

• Part B Average Sales Price (ASP) Data Reporting Guidance: Clarification on Medicaid Drug Rebate Program “Multiple Best Prices” Reporting Option  (PDF)
• ASP Data Collection Form (Addendum A) – Revised 2018 (ZIP)
• Information Regarding Medicare Payment and Coding for Drugs and Biologics – 2007 (PDF)
• Transmittals
• Update to Information Regarding Medicare Payment and Coding for Drugs & Biologics – April 25, 2007 (PDF)
• Update to Information Regarding Medicare Payment and Coding for Drugs and Biologics – May 18, 2007 (PDF)