Congressional Mandate: Part B Payment Amounts for Two Drugs Included Noncovered Self Administered Versions in 2022

11-03-2023 | OEI-BL-22-00380 | Issue Brief

KEY RESULTS

The Centers for Medicare & Medicaid Services (CMS) correctly removed noncovered self-administered versions of Orencia and Cimzia when calculating 2022 payment amounts, as required by law.

Payment amounts for both Fasenra and Xolair included noncovered self-administered versions in 2022. However, including the self-administered versions did not substantially affect per-injection payment amounts.

WHY WE DID THIS STUDY

In two earlier reports, the Office of Inspector General (OIG) evaluated the financial impact of including the prices of noncovered self-administered versions when setting the Part B payment amounts for the provider-administered versions of these drugs. OIG found that the inclusion of the noncovered versions of two drugs-Orencia and Cimzia-caused Medicare and its enrollees to pay an extra $863 million from 2014 through 2018.

End of
Translation

Although Congress did not change the way CMS sets Part B payment amounts for all drugs with noncovered versions, the OIG reports contributed to Congress enacting provisions requiring CMS to remove noncovered self-administered versions of Cimzia and Orencia from payment amount calculations for their billing codes beginning in July?2021 if the exclusions would result in lower payment amounts. In that same legislation, Congress required OIG to conduct periodic studies to identify additional billing codes for which both noncovered self-administered versions and covered provider-administered versions of a drug are used to set Part B payment amounts, and to subsequently determine whether those self-administered versions should be excluded. In general, for the drugs that OIG identifies, CMS is required to remove noncovered self-administered versions from payment amount calculations in subsequent quarters if the exclusions would result in lower payment amounts; however, the statute provides CMS with some discretion in addressing the requirement.

This review carries out OIG's statutory responsibility to periodically identify additional billing codes for which both noncovered self-administered versions and covered provider-administered versions are used to set Part B payment amounts. In addition, we assessed whether CMS had correctly removed higher-cost, self-administered versions of Orencia and Cimzia when calculating 2022 payment amounts for those two drugs, as required by law.

MANDATORY ACTION

In accordance with regulations, CMS is required to remove self-administered versions of Fasenra and Xolair from payment amount calculations in subsequent quarters if the exclusion would result in lower payment amounts.