Medicare Part B annually spends billions of dollars to cover a limited number of outpatient prescription drugs. To safeguard Medicare and its enrollees from excessive payment amounts, Congress established a mechanism for monitoring market prices, and the Centers for Medicare & Medicaid Services (CMS) implemented a price-substitution policy that results in lower costs for important, lifesaving drugs covered by Medicare Part B. When Congress established average sales prices (ASPs) as the basis for reimbursement for Medicare Part B drugs, it also provided a mechanism for monitoring market prices and limiting potentially excessive payment amounts. Generally, Part B-covered drugs are those that are injected or infused in physicians’ offices or outpatient settings. The Social Security Act (the Act) mandates that our office compare ASPs with average manufacturer prices (AMPs). If the Office of Inspector General (OIG) finds that the ASP for a drug exceeds the AMP by 5 percent, the Act directs the Secretary of Health and Human Services to substitute the ASP-based payment amount with a lower calculated rate.2 Through regulation, CMS stated that it would make this substitution only if the ASP for a drug exceeds the AMP by 5 percent in the two previous consecutive quarters or three of the previous four quarters.3 This issue brief is one in a series of annual reports - produced since CMS implemented the price-substitution policy in 2013 - that quantifies the savings to Medicare and its beneficiaries that result from CMS’s price-substitution policy.
Copyright:
The National Library of Medicine believes this item to be in the public domain. (More information)
Extent:
1 online resource (1 PDF file (8 unnumbered pages))