Medicare coverage for outpatient prescription drugs is primarily provided under the voluntary Part D benefit. However, a limited number of prescription drugs-generally those that are injected or infused in physicians' offices or hospital outpatient settings-are covered under Medicare Part B. With certain exceptions, Part B does not cover drugs that are usually self-administered by patients, including drugs administered by self-injection. Medicare payment amounts for most Part B drugs are based on manufacturer-reported average sales prices (ASPs). In general, manufacturers must provide the Centers for Medicare & Medicaid Services (CMS) with the ASP and sales volume for each of their Part B national drug codes (NDCs) on a quarterly basis. However, Medicare sets payment amounts and reimburses providers for Part B drugs using another type of code, the Healthcare Common Procedure Coding System (HCPCS) code rather than NDCs. Because more than one NOC may meet the definition of a particular HCPCS code, CMS must first "crosswalk" manufacturers' NDCs to their matching HCPCS codes. To determine the quarterly Part B payment amount for a HCPCS code, CMS calculates a volume-weighted ASP using the ASPs and sales volumes for each of the corresponding NDCs. In some cases, "corresponding" NDCs may include versions that, despite containing the same drug/formulation, are not typically used in situations that meet Part B drug coverage criteria. In other words, under certain circumstances, criteria for including drugs in payment amount calculations may differ from criteria for covering a drug under Part B. Previous OIG work has found that inaccuracies in CMS's ASP data may have affected Medicare payments for a small number of drugs. This current data brief addresses a similar issue, whereby CMS may be including noncovered, self-administered versions (i.e., NDCs) of certain drugs when calculating Part B payment amounts.
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