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The files below contain the payment amounts that will be used to pay for Part B covered drugs for the second quarter of 2008. Comparing the second quarter 2008 payment amounts with the previous quarter reveals that for the most part average drug prices in the market remain stable. Overall, average payment amounts across the top physician administered drugs are unchanged and average payment amounts across all drugs decreased by less than 1 percent. Preliminary 2007 data for the top physician administered drugs suggests that overall utilization of these drugs appears to have increased compared with 2006 levels. For most of the higher volume drugs (39 out of the top 50), the payment amounts changed 2 percent or less. Overall, the payment amounts for 30 of the top 50 drugs increased, while 3 remained the same. In general, among the top drugs with a decrease, there are a number of competitive market factors at work – multiple manufacturers, alternative therapies, new products, recent generic entrants, or market shifts to lower priced products. The Medicare, Medicaid and SCHIP Extension Act (MMSEA) of 2007 requires CMS to apply an alternative volume weighting computation to its calculation of ASP-based payment amounts. Prior to April 1, 2008, manufacturers' ASP data for smaller and larger package sizes are treated the same in CMS's calculation of the payment amounts; i.e., the ASP for one vial is treated the same as the ASP for a box of 10 vials. Beginning for payment amounts used on or after April 1, 2008, ASPs for larger package sizes have greater impact on the payment amounts and ASPs for smaller package sizes have less; i.e., the ASP for a box of 10 vials is given 10 times the weight of a single vial. The payment amounts in the files below reflect the new volume weighting computation. In addition, the MMSEA requires CMS to apply the lesser of the payment amounts for certain inhalation drugs furnished through DME calculated with and without the grandfathering provision of section 1847A. This provision impacted the payment amounts for albuterol and levalbuterol (J7611, J7612, J7613, and J7614). Studies of Medicare payment rates for oncology drugs by the Government Accountability Office, the Department of Health and Human Services Office of Inspector General (OIG), and the Medicare Payment Advisory Commission have found that physicians are generally able to acquire these drugs at prices below the Medicare reimbursement rate. CMS will continue to work with the OIG to monitor market prices and to ensure ASP data is reported accurately. As announced in late 2006, after carefully examining section 1847A of the Social Security Act, CMS has been working further to ensure that more accurate and, as appropriate, separate payment is made for single source drugs and biologicals under section 1847A. In addition, section 1847A requires single source drugs or biologicals that were within the same billing and payment code as of October 1, 2003, be treated as multiple source drugs, so the payment under section 1847A for these drugs and biologicals is based on the volume weighted average of the pricing information for all of the products within the billing and payment code. See the series of announcements regarding Medicare payment and coding for drugs and biologicals in the "Downloads" section of the ASP "Overview" page at the following address: http://www.cms.hhs.gov/McrPartBDrugAvgSalesPrice/. For claims with dates of service on or after April 1, 2008, the following new HCPCS codes are available and should be used by providers to report claims for these services: J7611 concentrated albuterol; J7612 concentrated levalbuterol; J7613 unit dose albuterol; J7614 unit dose levalbuterol; Q4097 Privigen; Q4098 Iron Dextran; and Q4099 formoterol fumarate. We continue to monitor IVIG marketplace developments and patients' access to intravenous immune globulin services. CMS and other agencies within the Department of Health and Human Services are continuing to work with manufacturers, providers, patient groups, and stakeholders to better understand the present situation and to assess potential actions that will help to ensure an adequate supply of IVIG and patients receiving appropriate and high quality care. Beginning July 1, 2007, six new HCPCS codes for specific IVIG products were used to implement separate payment for these products (including liquid IVIG, RhoPhylac® and HepaGamBTM ). For the second quarter of 2008, the Medicare payment amount is increasing 1.4 percent for lyophilized IVIG (powdered form) and up to 1.7 percent for liquid IVIG. In 2008, Medicare will continue to make a temporary separate payment to physicians and hospital outpatient departments for preadministration-related services associated with administration of IVIG. The IVIG pre-administration service payment is in addition to Medicare's payments to the physician or hospital for the IVIG product itself and for administration of the IVIG product via intravenous infusion. Where applicable, the payment amounts in the quarterly ASP files are 106 percent of the Average Sales Price (ASP) calculated from data submitted by drug manufacturers. The quarter to quarter price changes are generally the result of updated data from the manufacturers of these drugs.
Page Last Modified: 03/21/2008 2:44:47 PM
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