CMS Payment Methodology Inflates Medicare Part B Costs for Stelara Biosimilars

Medicare Part B generally excludes coverage for self-administered drugs, yet the Centers for Medicare & Medicaid Services (CMS) includes average sales prices (ASPs) of certain noncovered self-administered drugs when calculating payments for covered provider-administered counterparts. This methodology can inadvertently increase payment amounts for the covered drugs. The Office of Inspector General (OIG) is mandated to review these billing codes periodically to identify instances where both self-administered and provider-administered versions influence Part B payment amounts. For certain drugs, including some Stelara biosimilars, CMS assigns a single billing code encompassing both covered and noncovered versions, affecting payment calculations. In the fourth quarter of 2025, payment amounts for four Stelara biosimilars included noncovered self-administered versions, resulting in payments 59 to 87 percent higher than if these versions were excluded, translating to savings of up to $3,765 per vial. Despite statutory guidance permitting CMS to remove noncovered versions from payment calculations when it would reduce costs, CMS has not yet exercised this discretion for these biosimilars. The OIG emphasizes the potential Medicare savings and urges CMS to act to adjust payment methodologies accordingly. This report aligns with oversight provisions under the National Defense Authorization Act Fiscal Year 2023, reflecting ongoing regulatory scrutiny of Medicare Part B drug payment policies.