U.S. DEPARTMENT OF HEALTH & HUMAN SERVICES 
OFFICE OF INSPECTOR GENERAL 
HHS OIG Issue Brief November 2017  OEl-12-17-00260 
Excluding Noncovered Versions When Setting Payment for Two 

Part B Drugs Would Have Resulted in Lower Drug Costs for 

Medicare and its Beneficiaries 

Medicare coverage for outpatient prescription drugs is 
primarily provided under the voluntary Part D benefit.1 
However, a limited number of prescription 
drugs-generally those that are injected or infused in 
physicians' offices or hospital outpatient settings-are 
CMS and a Federal court  covered under Medicare Part B.2  With certain 
interpret the law to require the  exceptions, Part B does not cover drugs that are usually 
inclusion of noncovered  self-administered by patients, including drugs 
versions of drugs in limited  administered by self-injection.3 
circumstances when setting 
payment amounts  Medicare payment amounts for most Part B drugs are 
based on manufacturer-reported average sales prices 
As a result, CMS included  (ASPs).4  In general, manufacturers must provide the 
noncovered, self-administered  Centers for .Medicare & Medicaid Services (CMS) with the 
versions when calculating 
ASP and sales volume for each of their Part B national 
payment amounts for two  drug codes (NDCs) on a quarterly basis.5 6 However, 
Part B drugs 
Medicare sets payment amounts and reimburses 
providers for Part B drugs using another type of code, the 
The inclusion of these 
Healthcare Common Procedure Coding System (HCPCS) 
noncovered versions caused 
code rather than NDCs.  Because more than one NOC 
Medicare and its beneficiaries 
to pay an extra $366 million  may meet the definition of a particular HCPCS code, CMS 
from 2014 through 2016  must first "crosswalk" manufacturers' NDCs to their 
matching HCPCS codes.7  To determine the quarterly 
Part B payment amount for a HCPCS code, CMS 
calculates a volume-weighted ASP using the ASPs and sales volumes for each of the corresponding 
NDCs.8  In some cases, "corresponding" NDCs may include versions that, despite containing the same 
drug/formulation, are not typically used in situations that meet Part B drug coverage criteria.  In other 
words, under certain circumstances, criteria for including drugs in payment amount calculations may 
differ from criteria for covering a drug under Part B. 
1  Previous OIG work has found that inaccuracies in CMS's ASP data may have affected Medicare payments 
for a small number of drugs.9  This current data brief addresses a similar issue, whereby CMS may be 
including noncovered, self-administered versions (i.e., NDCs) of certain drugs when calculating Part B 
payment amounts. 
Exhibit 1: Glossary of Technical Terms Used in This Report 
Average sales price (ASP) 
Dollar amount of a manufacturer's sales of a drug to all purchasers (with certain exceptions) in the United 
States in a quarter divided by the number of units of the drug sold by the manufacturer in that same quarter, 
net of certain price concessions and discounts. 
Medicare pays for most Part B drug codes at 106 percent of their ASPs. 
Biological License Application (BLA) 
Essentially, the vehicle by which manufacturers seek approval from the Food and Drug Administration (FDA) to 
market a biologic. 
Crosswalk 
Because payments for Part B drugs are based on HCPCS codes rather than on NDCs and because more than one 
NDC may meet the definition of a particular HCPCS code, CMS must "crosswalk" manufacturers' NDCs to their 
matching HCPCS codes. 
Each quarter, CMS publishes a crosswalk file that lists the NDCs matching each Part B drug HCPCS code. 
Healthcare Common Procedure Coding System (HCPCS) code 
Procedure codes used by providers to submit claims to Medicare and to obtain payment for Part B drugs. 
In the case of prescription drugs, each HCPCS code defines the drug's name and the amount of drug 
represented by one unit of the HCPCS code but does not specify manufacturer or package size information. 
National drug code (NDC) 
An 11-digit code that is divided into three segments identifying (1) the firm that manufactures, distributes, or 
repackages the drug product; (2) the strength, dosage form, and formulation of the product; and (3) the 
product's package size and package type. 
New Drug Application (NDA) 
Essentially, the vehicle by which manufacturers seek approval from the FDA to market a drug. 
RESULTS 

CMS and a Federal court interpret the law to require the inclusion of 
noncovered versions of drugs in limited circumstances when setting 
payment amounts 
In determining which NDCs are crosswalked to a HCPCS code for payment purposes, CMS relies on 
manufacturer submissions, environmental scanning by contractors, and the clinical expertise of staff. 
This process is guided by Federal law, regulation, and subregulatory guidance (e.g., FAQs, informational 
bulletins, etc.). 
2  The Act requires that the payment amount for a single-source (i.e., brand name) drug be determined 
using all of the NDCs assigned to it.10  The Act further states that the payment amount for a Part B drug 
shall be determined "without regard to any special packaging, labeling, or identifiers on the dosage form 
or product or package."11 
In interpreting the statute, CMS staff determined that: 
(1) 	 all versions of a product listed under the same FDA approval number (e.g., NDA or BLA) 
must be considered the same drug or biological, for payments made under Section 1847 A of 
the Act, and 
(2) 	 for a product marketed under the same approval number, labeling that indicates that a 
version may be used primarily when the drug is not covered under Part B (e.g., the version is 
for self-administration only) cannot be used as a basis to exclude that version from a 
payment amount calculation. 
To that end, CMS states in its subregulatory guidance that the agency will "ensure that payment will be 
based on the pricing information for all products produced or distributed under an FDA approval for the 
drug or biological."12  In other words, Part B payments for prescription drugs factor in prices for all 
versions of a drug, even when certain versions of the drug may be used primarily in situations that are 
not covered by the program.  CMS's decision is supported by the ruling of the U.S. District Court for the 
District of Columbia in Allergan v. Burwell. The Court considered whether the manufacturer of a 
biological marketed as BOTOX for therapeutic use (i.e., the covered version) and as BOTOX Cosmetic 
(i.e., the noncovered version) was required to report ASP data for the noncovered version to CMS.13 
The inclusion of noncovered self-administered products when setting 
payment amounts for two Part 8 drugs caused Medicare and its 
beneficiaries to pay an extra $366 million from 2014 to 2016 
OIG identified two drugs (Orencia and Cimzia) for which CMS includes noncovered self-administered 
versions when calculating Part B payment amounts, even though Part B generally does not cover drugs 
that are self-administered.  For each drug, the self-administered version(s) was approved by FDA under 
the same BLA as the physician-administered version, meaning that CMS is following internal policy and 
case law when setting payment.  However, the HCPCS code descriptions (developed by CMS with public 
input) of both drugs specifically exclude self-administration. 
Part B spending for the two drugs would have been reduced by $366 million (19 percent of 
expenditures) from 2014 through 2016 if the payment amounts were set using only the physician
administered versions (i.e., had the noncovered self-administered versions not been used in 
determining payment) .14  Twenty percent of that total ($73.2 million) would have come directly through 
reduced coinsurance owed by Medicare beneficiaries. 
Medicare and its beneficiaries would have saved $302 million if payment amounts 
for Orencia had been set using only physician-administered versions. 
Orencia (abatacept) is a prescription drug used to treat moderate to severe rheumatoid arthritis and 
some other forms of arthritis.  Prior to 2014, CMS included ASPs for just a single, intravenous version of 
3  Orencia when calculating the Part B payment amount for the drug. In 2011, a new higher-priced form of 
Orencia intended primarily for home administration was approved fo r marketing by FDA (see Exhibit 2) 
under the same BLA as the original physician-administered version. Orencia's manufacturer began 
reporting ASP data for an NDC associated with the new form in the first quarter of 2014, and CMS 
subsequently blended the ASPs for both the physician- and self-administered versions (based on sales 
volumes) when determining the third-quarter 2014 payment amount for the HCPCS code. In following 
its pricing policy, CMS made this decision even though the HCPCS code description states that the code 
11 is not for use when drug is self administered ."15 
Exhibit 2: Manufacturer Description of Orencia Prefilled Syringe 
For home use, OR ENC IA comes in a prefilled syringe or 
prefilled ClickJect autoinjector. After you receive training at 
your doctor's office, this once-weekly injection can be done 
in the comfort of your home. 
Source: Text from http://www.orencia.bmscustomerconnect.com/how-to-take-orencia/self-injection-prefilled-syringe, accessed on February 28, 201 7. 
When CMS began including the ASPs of self-administered Orencia, the Part B payment amount for a 
typical monthly dose of the drug immediately jumped from approximately $1,774 to $2,394 per month 
(see Exhibit 3) . This increase was not caused by significant growth in the cost of the intravenous version 
administered by physicians.  Rather, it was driven by the introduction of the higher-cost version of 
Orencia that is primarily intended for self-injection in a patient's home. As a result, Medicare payment 
amounts for Orencia from the third quarter of 2014 through the fourth quarter of 2016 were 30 percent 
to 35 percent higher than they could have been.  Had CMS not included the self-administered version of 
Orencia when setting payment, Medicare and beneficia ry spending on the drug would have been 
reduced by $302 million over 3 years. 
To put these numbers in perspective, 23,366 Medicare beneficiaries had at least one claim for Orencia 
paid under Part Bin 2016. On average, beneficiaries owed $665 in coinsurance per administration, 
which is generally once per month for the physician-administered version.16  Had payment been based  
solely on the physician-administered versions, beneficiaries would have instead owed an average of 
$494-i.e., $171 less-per administration .17 
4  Exhibit 3: Actual vs. Alternate Payment Amounts (per Average Dose) for Orencia, 2014-2016 
$3,500 

$3,250 
$3,000 
$2,750 
$2,500 
$2,250 
$2,000 
$1, 750 
$1,500 
lQ  2Q  3Q  4Q  lQ  2Q  3Q  4Q  lQ  2Q  3Q  4Q 
2014  2014  2014  2014  2015  2015  2015  2015  2016  2016  2016  2016 
~Alternate Part B Payment Amount Per Average Dose 
-e-Actual Part B Payment Amount Per Average Dose 
Source: OIG analysis of CMS ASP files and Part B claim files. 

Note: "Alternate Part B Payment Amount" refers to"the payment amount had CMS excluded self-administered versions from its calculations. To 

calculate actual and alternate payment amounts per average dose, we used the average dose of Orencia In 2016.  

Medicare and its beneficiaries would have saved $64 million if payment amounts 
for Cimzia had been set using only physician-administered versions. 
Cimzia (certolizumab pegol) is a prescription drug used to treat rheumatoid arthritis, psoriatic arthritis, 
ankylosing spondylitis, and Crohn's disease.  CMS includes the ASPs for three versions of Cimzia when 
calculating Part B payments amounts for the drug.  However, as with Orencia, only one of these versions 
is primarily for injection by health care professionals, even though all are approved under the same BLA. 
According to the manufacturer's Web site, the other two versions are intended to be self-administered 
by the patient (see Exhibit 4).18  Similar to Orencia, the HCPCS code definition for Cimzia states that the 
code is not for use when the drug is self-administered.19 
5  Exhibit 4: Manufacturer Description of Cimzia Prefilled Syringe 
With CIMZIA, your doctor may decide to have you self-inject at home 
with the prefilled syringe after you receive proper training by your 
healthcare professional. If you are.prescribed at home injections, 
CIMZIA comes as a solution in a prefilled syringe. 
0 
Source: Text from https://www.cimzia.com/rheumatoid-arthritis/starting-cimzia/injection-training accessed on February 28, 2017. 
As a result of the ASPs for the self-administered versions being used in pricing calculations, Medicare 
payment amounts for Cimzia from the first quarter of 2014 through the fourth quarter of 2016 were 
1 percent to 25 percent higher than they would have been had payment been based solely on the single 
version of the drug intended to be administered by a physician (see Exhibit 5).20  Had CMS not included 
the self-administered version of Cimzia when setting payment, Medicare and beneficiary spending on 
the drug would have been reduced by $64 million over 3 years. 
In total, 12,050 Medicare beneficiaries had at least one claim for Cimzia paid under Part Bin 2016.  On 
average, beneficiaries owed $525 in coinsurance per drug administration, which can occur as often as 
twice per month depending on the beneficiary's condition.  Had payment been based solely on the 
physician-administered versions, beneficiaries would have instead owed $457-i.e., $68 less-per 
administration.21 
6  Exhibit 5: Actual vs. Alternate Payment Amounts (per Average Dose) for Cimzia, 2014-2016 
I 
$3,000 

$2,750 

$2,500 
1  s2,250 
I 
s2,ooo 
$1,750 
$1,500 
lQ  2Q  3Q  4Q  lQ  2Q  3Q  4Q  lQ  2Q  3Q  4Q 
2014  2014  2014  2014  2015  2015  2015  2015  2016  2016  2016  2016 
-.-Alternate Part B Payment Amount Per Average Dose 
..._Actual Part B Payment Amount Per Average Dose 
Source: OIG analysis of CMS ASP files and Part B claims files. 

Note: "Alternate Part B Payment Amounr refers to the payment amount had CMS excluded self-administered versions from its calculation. 

To calculate actual and alternate payment amounts per average dose, we used the average dose of Cimzia in 2016. In the second and third quarters 

of 2015, CMS substituted the ASP-based payment amount for Cimzia with an amount set at 103 percent of the AMP. See endnote 20. 

7  RECOMMENDATION 

With certain exceptions, self-administered drugs are typically not covered under Medicare Part B. 
However, as _highlighted in this brief, CMS factors-in the prices for noncovered, self-administered 
versions when calculating payment amounts for two high-expenditure Part B drugs.  As a result, 
Medicare payment amounts were inflated from 2014 through 2016, causing the program and its 
beneficiaries to pay an additional $366 million during this period. 
CMS interprets the applicable law to require such an inclusion of noncovered versions of drugs, and a 
Federal district court reached the same conclusion.  Accordingly, a legislative change may be required to 
address this matter. We recommend that CMS: 
Seek a legislative change that would provide the agency flexibility to determine 
when noncovered versions of a drug should be included in Part 8 payment 
amount calculations 
Including prices for higher-cost versions of drugs that are not covered under Medicare Part B when 
setting Part B payment amounts seems inconsistent with the goal of establishing appropriate payment 
amounts. A legislative fix should allow CMS to determine-based upon cost implications and other 
relevant factors-whether the agency will include ASPs for noncovered versions of a drug in Part B 
payment amounts. 
AGENCY COMMENTS AND OFFICE OF INSPECTOR GENERAL RESPONSE 
CMS did not concur with our recommendation. The agency stated that although situations in which a 
health care professional uses a version of a drug that is typically self-administered may be rare, 
modifying current law could limit the flexibility afforded to physicians to do so.  This, in turn, could 
negatively affect beneficiary access to medically necessary drugs as well as increase the cost of these 
drugs. The agency also stated that further analysis on the cost, policy, and operational implications 
would need to be conducted for CMS to determine whether such a change in law would be appropriate. 
OIG shares CMS's concern regarding the need to safeguard patient access, and recognizes there may be 
extremely limited circumstances in which physicians would choose to personally administer a higher
cost version of a drug that is primarily intended for self-injection by the patient. On those occasions, 
physicians should be reimbursed appropriately for the more expensive drug. However, OIG believes 
that there are more effective means to address these limited circumstances-means that would not 
result in Medicare and its beneficiaries paying hundreds of millions of dollars in excess just to 
accommodate a rare occurrence.  For example, if new legislation were to pass providing CMS flexibility 
to determine when noncovered versions of a drug should be included in Part B payment amount 
calculations, the agency would be able to implement rules requiring a claims modifier to indicate the use 
of a typically self-administered version by the physician. This modifier could, in turn, result in an 
appropriately higher payment amount. 
Given the dollars at stake, and the fact that new drugs fitting the criteria identified in this report are 
entering the market each year, we believe that the benefits of a legislative change warrants further 
analysis. Therefore, we encourage CMS to study the cost, policy, and operational implications the 
agency believes are necessary before pursuing such a change. 
8  METHODOLOGY 

Identifying Drugs.  To identify drugs with payment amounts based in part on ASPs for self-administered 
versions that typically would not be used in situations that meet Part B coverage criteria, we: 
 	 matched all NDCs listed on CMS's ASP crosswalk files to current national drug compendia and 
identified NDCs with routes of administration that are associated with possible self
administration; 
 	 removed from the analysis any NDCs for which self-administration is allowed under Part B 
coverage criteria (e.g., inhalation drugs, oral anticancer drugs); 
 	 checked related manufacturer websites, as well as FDA listings, for the remaining NDCs to 
determine whether the associated drugs are primarily recommended for self-administration; 
and 
 	 selected any associated HCPCS codes that included both (1) NDCs for physician-administered 
versions and (2) NDCs for self-administered versions that did not meet Part Bcoverage criteria 
(see Exhibit 6). 
Exhibit 6: Summary of Part B NDCs Included in Analysis 
Criteria  Number of NDCs Removed  Number of NDCs Remaining 
All Part B NDCs  None  4,089 
Removed drugs with no route of 
208  3,881 
administration listed* 
Removed drugs that would likely only 
3,220  661 
be administered by physicians 
Removed non-injectable drugs for 
which self-administration is covered 
582  79 
under Part B (e.g., inhalation, oral 
anticancer, topical drugs) 
Removed injectable drugs for which 
self-administration is covered under 
16  63 
Part B (i.e., durable medical 
equipment infusion drugs) 
Removed injectable drugs used for 
shorter-term conditions that may be  33  30 
either physician-or self-administered 
Removed drugs that only had NDCs 
for self-administered versions (e.g.,  27  3 (associated with 2 HCPCS codes) 
insulin) 
Source: OIG analysis of CMS's ASP crosswalk files, national drug compendia, Part B coverage criteria, manufacturer websites, and Food & 
Drug Administration prescribing information. 

*All but eight of these NDCs were for nondrug skin graft products or contrast materials used during medical procedures. 

Determining Alternate Payment Amounts. For the two HCPCS codes that met all the above criteria, we 
recalculated the Medicare payment amounts using CMS's volume-weighted ASP formula in each quarter 
from 2014-2016 with the self-administered NDCs removed.  We calculated the difference between the 
actual and alternate payment amounts in each quarter. 
9  Savings Calculations.  To determine how much Medicare would have spent for each drug had CMS not 
included self-administered versions, we multiplied the alternate payment amount in each quarter by the 
total number of units reimbursed by Medicare Part Bin that quarter.  We then subtracted the results 
from actual quarterly Part B expenditures for each drug to determine how much less Medicare and its 
beneficiaries would have saved.  In other words, we used the following formula for each quarter: 
Savings = Actual expenditures - (Alternate payment amount * Number of units reimbursed) 
Limitations 
There may be limited occasions when health care professionals could inject what are typically self
administered versions of Orencia or Cimzia . Our analysis did not take into account these 
circumstances.22 
Our analysis did not take into account the effects of sequestration on Medicare payment amounts and 
expenditures.  Part B claims dated on or after April 1, 2013, incur a 2-percent reduction in payment in 
accordance with the Budget Control Act of 2011 and the American Taxpayer Relief Act of 2012 (i.e., 
sequestration). This mandatory payment reduction is applied after the beneficiary's coinsurance has 
been determined.23 
Standards 
This study was conducted in accordance with the Quality Standards for Inspection and Evaluation issued 
by the Council of the Inspectors General on Integrity and Efficiency. 
10  AGENCY COMMENTS 

DEPARTMENT OF HEALTH & HUMAN SERVICES  Centers for Medicare & Medicaid Services 
200 independence Avenue SW 
Washington, DC 20201 
DATE:  OCT  1 3 2017 
TO: 	 Daniel R._Levinson 
Inspector General 
r 

FROM: 	 Seema Verma (I\ 
'6\J 

Administrator 
SUBJECT: 	 Office of Inspector General (OJG) Draft Issue Brief: Excluding Non-Covered 
Versions When Setting Payment for Two Pat1 B Drugs Would Have Resulted in 
t/ 
Lower Drug Costs for Medicare and its Beneficiaries (OEl-12-17-00260) 
The Centers for Medicare & Medicaid Services (CMS) appreciates the opportunity to review and 
comment on the Office oflnspector General's (OJG) draft report. CMS strives to maximize the 
affordability and availability of drugs for Medicare beneficiaries while protecting taxpayer 
dollars. 
Medicare covers many prescription drugs under the Part D benefit. However, some prescription 
drugs, typically those that are injected or infused in physicians' offices or hospital outpatient 
settings, are covered under the Part B benefit. 
Drugs covered under the Pait B benefit are generally priced using the average sales price 
payment methodology outlined in Section 1847A of the Social Security Act (the "Act"), which 
requires that the payment amount for the billing and payment code, or Healthcare Common 
Procedure Coding System code, for a drug or biological be determined using all of the National 
Drug Codes assigned to the code regardless of how the drug is packaged. 
For Part B drug payments made under the average sales price payment methodology in section 
184 7 A of the Act, CMS bases the payment limit for a biological product or single source drug 
assigned to a Healthcare Common Procedure Coding System code on the pricing information for 
products produced or distributed under the applicable Food and Drug Administration approval. 
The average sales price payment methodology factors in prices for all versions of a drug, 
including versions of a drug that may primarily be used in situations that are not covered under 
Part B, such as versions of drugs that are injected by a patient at home. Thus, no version of a 
drug can be excluded from the calculation of the average sales price ofa Healthcare Common 
Procedure Coding System code to which that product is assigned. 
OIG's recommendation and CMS' response are below. 
11  OIG Recommendation 
The OIG recommends that CMS seek legislation that would provide the agency flexibility to 
determine when non-covered versions ofa drug should be included in Pait 8 payment amount 
calculations. 
CMS Response 
CMS non-concurs with OIG's recommendation. Current legislation permits Part 8 payment in 
situations where a health care professional would use a version of a drug that is typically self
administered. While these instances may be rare, modifying the current legislation could limit the 
flexibility afforded to healthcare professionals which could negatively impact access to medically 
necessary drugs as well as increase the cost of these drugs. Fmther analysis on the cost, policy, and 
operational implications would need to be done in order for CMS to detennine whether such a 
change in law would be appropriate. 
12  ACKNOWLEDGMENTS 

Dave Tawes served as the team leader for this study.  Others in the Office of Evaluation and Inspections 
who conducted the study include Bahar Adi Ii.  Office of Evaluation and Inspections staff who provided 
support include Clarence Arnold and Meghan Kearns. 
We would also like to acknowledge the contributions of other Office of Inspector General staff, including 
Lauren McNulty and Jessica Swanstrom. 
This report was prepared under the direction of Dave Tawes Regional Inspector General for Evaluation 
and Inspections in the Baltimore regional office, and Louise Schoggen, Assistant Regional Inspector 
General. 
To obtain additional information concerning this report or to obtain copies, contact the Office of Public 
Affairs at Public.Affairs@oig.hhs.gov. 
13  ENDNOTES 

1 Section 18600-1 et seq. of the Social Security Act (the Act), 42 CFR Part 423. 
2 Hereinafter referred to as physician-administered drugs. 42 CFR  414.900 and the Medicare Benefit Policy 
Manual, ch. 15,  50. 
3 Medicare Part B does cover a small number of self-administered drugs, including certain oral anti-cancer drugs, 
blood clotting factors, and inhalation and infusion drugs used with durable medical equipment. 42 CFR  
414.900{b) and the Medicare Benefit Policy Manual, ch. 15  50.  At 50.2 of the same manual, CMS describes how 
contractors can determine whether a drug is 11 usually self-administered." 
4 Section 1847 A(a) of the Act (requiring use of ASP payment methodology), 42 CFR  414.904(a). 
5 Section 1847 A(f) (requiring quarterly reporting of ASP using the reporting requirements located at section 
1927{b)(3) of the Act). 
6 According to previous Office of Inspector General (OIG) work, there is no 11 master list" of manufacturers that are 
required to report ASPs.  As a result, manufacturers have often reported ASPs for NDCs that CMS does not 
consider to be associated with a Part B drug. See Average Sales Prices: Manufacturer Reporting and CMS 
Oversight, OEl-03-08-00480, February 2010 and Limitations in Manufacturer Reporting ofAverage Sales Price Data 
for Part B Drugs, OEl-12-13-00040, July 2014. 
7 Each quarter, CMS publishes a crosswalk file that lists the NDCs matching each Part B drug HCPCS code. CMS also 
develops a nonpublic quarterly ASP 11 background" file for internal use, which lists the ASPs and number of units 
sold for all NDCs that meet the definition of each Part B drug HCPCS code paid under the ASP methodology. 
8 Volume-weighting ensures that ASPs for NDCs with higher sales volumes have greater influence on the payment 
amount for a HCPCS code than ASPs for NDCs with lower sales volumes. 
9 OIG, Limitations in Manufacturer Reporting ofAverage Sales Price Data for Part B Drugs, OEl-12-13-00040, July 
2014. 
10 Section 1847A(b)(4)(A) of the Act. 
11 Section 1847 A(b)(5) of the Act. 
12 CMS, 2007 Subregulatory Guidance, May 18, 2007. Accessed at https://www.cms.gov/Medicare/Medicare-Fee
for-Service-Part-B-Drugs/McrPartBDrugAvgSalesPrice/index.html. Accessed online on May 23, 2017. 
13 Allergan, Inc. v. Sylvia Mathews Burwell, Case No. 13-00264, 2016 U.S. Dist. LEXIS 43550 (D.D.C. March 30, 2016). 
14 To be clear, we did not find that claims for these two drugs were inappropriately paid under Part B.  Rather, the 
payment amounts under Part B were inflated by the inclusion of versions that are typically self-administered. 
15 J0129: Injection, abatacept, 10 mg (code may be used for Medicare when drug administered under the direct 
supervision of a physician, not for use when drug is self-administered). 
16 In general, patients are administered initial doses of Orencia at 2 and 4 weeks, then every 4 weeks thereafter. 
17 We used payment levels from the fourth quarter of 2016 to calculate actual and alternate payment amounts per 
average dose for Orencia. 
18 https://www.cimzia.com/assets/pdf/MedicationGuide.pdf, accessed on February 28, 2017. 
19 J0717:  Injection, certolizumab pegol, 1 mg (code may be used for Medicare when drug administered under the 
direct supervision of a physician, not for use when drug is self-administered). 
20 In the second and third quarters of 2015, CMS substituted the ASP-based payment amount for Cimzia with an 
amount set at 103 percent of the average manufacturer price (AMP). When Congress established ASPs as the 
primary basis for. Part B reimbursement, it also mandated that OIG compare ASPs to AMPs, and directed CMS to 
substitute payment amounts for drugs with ASPs that exceeded AMPs by a certain threshold. See Section 
1847A(d) of the Act. 
21 We used payment levels from the fourth quarter of 2016 to calculate actual and alternate payment amounts per 
average dose for Cimzia. 
22 According to the manufacturer of Cimzia, even when the self-administered version is administered in a 
physician's office, the beneficiary would obtain the drug from a pharmacy: 11 lf you can self-inject [at home] and 
your doctor has prescribed the prefilled syringe, your prescription will typically be sent to a specialty pharmacy 
that specializes in dispensing biologic medications ... If self-injecting for the first time, your doctor's office may ask 
you to come to their office with your medication so they can provide training and explain important safety 
14  information." See https://www.cimzia.com/rheumatoid-arthritis/starting-cimzia/key-steps, accessed on February 

28, 2017.  Part B would not cover self-injected versions that a beneficiary purchases from a pharmacy and takes to 

the physician's office for training. 

23 CMS Medicare FFS Provider e-News, Mandatory Payment Reductions in the Medicare Fee-for-Service {FFS) 

Program-"Sequestration," March 8, 2013, available at https://www.cms.gov/Outreach-and

Education/Outreach/FFSProvPartProg/Downloads/2013-03-08-standalone.pdf. 

15