Medicare Part B Payment Adjustments Impacted by Noncovered Drugs

Medicare Part B typically excludes coverage for self-administered medications, yet the Centers for Medicare & Medicaid Services (CMS) evaluates average sales prices (ASPs) of these noncovered drugs when setting Part B payment amounts for their covered, provider-administered equivalents. This can sometimes result in higher payments under Part B.

The Office of Inspector General (OIG) periodically reviews billing codes to identify cases where both covered and noncovered drug versions affect Part B payments. When OIG determines that excluding noncovered versions would reduce costs, it advises CMS, which may adjust future payment calculations accordingly. Recent evaluations focused on ASP data for 2023 and 2024.

Inclusion of noncovered, self-administered versions increased Part B payments for Omvoh, which is available for both provider and self-administration. CMS’s 2024 adjustments raised payments, although excluding these forms could have lowered Omvoh’s payments by 15%, saving $1,742 per vial. From 2023 to 2024, exclusion of noncovered versions in Orencia, Cimzia, Fasenra, Xolair, and Tezspire calculations saved Medicare Part B and beneficiaries approximately $1.3 billion. OIG's findings encourage CMS to consider excluding Omvoh’s self-administered forms, aligning with section 5274 of the National Defense Authorization Act Fiscal Year 2023.