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Medicare Part B drug payments: impact of price substitutions based on 2018 average sales prices
Medicare Part B drug payments: impact of price substitutions based on 2018 average sales prices
- Collection:
- Health Policy and Services Research
- Series Title(s):
- Data snapshot
- Contributor(s):
- United States. Department of Health and Human Services. Office of Inspector General. Office of Evaluation and Inspections, issuing body.
- Publication:
- [Washington, D.C.] : U.S. Department of Health and Human Services, Office of Inspector General, August 2020
- Language(s):
- English
- Format:
- Text
- Subject(s):
- Cost Control -- legislation & jurisprudence
Drug Substitution -- economics
Government Regulation
Medicare Part B -- economics
United States
United States. Department of Health and Human Services - Genre(s):
- Technical Report
- Abstract:
- What OIG Did. 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 hospital outpatient settings. The Social Security Act (the Act) mandates that the Office of Inspector General (OIG) compare ASPs with average manufacturer prices (AMPs). If OIG finds that the ASP for a drug exceeds the AMP by a certain percentage (currently 5 percent), the Act directs the Secretary of Health and Human Services to substitute the ASP-based payment amount with a lower calculated rate. Through regulation, the Centers for Medicare & Medicaid Services (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. This data snapshot quantifies the savings to Medicare and its beneficiaries that are a direct result of CMS’s price-substitution policy based on ASPs from 2018. To determine these savings, we calculated the difference between ASP-based payment and AMP-based payment for each drug with a price substitution. We then applied this difference to the Medicare utilization for each of these drugs when the substitution occurred—the fourth quarter of 2018 through the third quarter of 2019—to calculate the savings based on 2018 ASP data.
- Copyright:
- The National Library of Medicine believes this item to be in the public domain. (More information)
- Extent:
- 1 online resource (1 PDF file (6 pages))
- Illustrations:
- Illustrations
- NLM Unique ID:
- 9918282381206676 (See catalog record)
- Permanent Link:
- http://resource.nlm.nih.gov/9918282381206676