ASP Reimbursement to Begin on January 1, 2017 Without Delay

In discussions held yesterday between NHIA and the Centers for Medicare & Medicaid Services (CMS), officials indicated the agency fully intends to have the necessary structure in place on January 1, 2017, to implement the Average Sales Price (ASP) reimbursement revisions that were included in the recently enacted 21st Century Cures Act. Citing the strict timeline contained in section 5004(a) of Cures, as it relates to Medicare Part B DME infusion drugs, agency officials stated there was no latitude to push back or otherwise alter the January 1, 2017, mandate.

NHIA initiated the call with CMS to address concerns about beneficiary access and implementation issues regarding the January 1 timeframe. Specifically, the Association emphasized the impact of ASP reimbursement for patients receiving inotropic medications (milrinone) and subcutaneous immunoglobulin therapy (SCIg). While expressing appreciation for the information, Medicare officials said they are required to abide by the implementation deadline imposed by Congress. The CMS representatives requested that NHIA keep the agency informed about beneficiary and provider issues that could result from the move to ASP reimbursement.

Coming out of the CMS discussion, NHIA can report the following details:

  • CMS has shared drug pricing files with the Durable Medical Equipment Medicare Administrative Contractors (DME MACs) to prepare them for immediate implementation. An NHIA analysis comparing the current Medicare Part B Drug AWP-based payments to the ASP-based reimbursement is available on the NHIA website.

    Note: The DME Infusion Limit column has been removed from the drug price files starting Q1 2017. "Effective January 1, 2017, payment for infusion drugs furnished through a covered item of DME will be based on Section 1847A of the Social Security Act, meaning that most of the payments will be based on the Average Sales Price of these drugs. The ASP Drug Pricing Files for 2017 and subsequent years will no longer contain columns for the Infusion AWP or the DME Infusion Limit. Unless otherwise specified, the Payment Limit in column D will be applied to payments for drugs infused through covered DME. Additional information on DME Infusion Drug Pricing is available through the DME MACs."

  • Payment limits for valid Healthcare Common Procedure Coding System (HCPCS) codes that are not included in the quarterly ASP pricing files will be determined by the local Medicare contractor. ┬áPer Chapter 17 of the Medicare Claims Processing Manual, the DME MACs will set the price based on Wholesale Acquisition Cost (WAC) or invoice pricing. The following excerpt is taken from Chapter 17:

    The payment allowance limits for drugs and biologicals that are not included in the ASP Medicare Part B Drug Pricing File or Not Otherwise Classified (NOC) Pricing File, other than new drugs that are produced or distributed under a new drug application (or other application) approved by the Food and Drug Administration, are based on the published Wholesale Acquisition Cost (WAC) or invoice pricing, except under OPPS where the payment allowance limit is 95 percent of the published AWP. In determining the payment limit based on WAC, the contractors follow the methodology specified in Publication 100-04, Chapter 17, Drugs and Biologicals, for calculating the AWP, but substitute WAC for AWP. The payment limit is 106 percent of the lesser of the lowest-priced brand or median generic WAC.

    MACs shall develop payment allowance limits for covered drugs when CMS does not supply the payment allowance limit on the ASP drug pricing file. At the contractors' discretion, contractors may contact CMS to obtain payment limits for drugs not included in the quarterly ASP or NOC files or otherwise made available by CMS on the CMS Web site. If the payment limit is available from CMS, contractors will substitute CMS-provided payment limits for pricing based on WAC or invoice pricing. CMS will provide the payment limits either directly to the requesting contractor or via posting an MS Excel file on the CMS Web site.

  • Not otherwise classified (NOC) drugs will also be based on WAC or invoice pricing. See excerpt from Chapter 17 above;

  • NHIA has contacted the DME MACs requesting additional details including:
    • Information on the method they will use to calculate the rates for HCPCS codes that are not included in the ASP file, such as generic forms of milrinone.
    • When the Q1 2017 DME MAC Drug Fee schedule will be available
    • When notification and supplier education regarding the change to ASP pricing will take place.

  • There is no grandfathering provision that would allow payment for existing patients at a rate other than ASP+6%;

  • There is no process to seek additional payment if a provider's drug acquisition cost is greater than the allowed amount;

  • CMS will defer to the DME MACs regarding education of providers on the change in reimbursement; and

  • CMS will not communicate about the modifications directly to Medicare beneficiaries in any extensive manner.

Consistent with CMS' request for updates on beneficiary and provider issues, the home infusion community should use every opportunity to share with Congress and CMS any difficulties that arise with implementation of ASP reimbursement. NHIA is working with stakeholders to develop channels for reporting beneficiary and provider problems. The Association is also engaged in discussions with key lawmakers about concerns with ASP implementation and possible legislative solutions in 2017.