Persius/hicric huggingface dataset:
~.,...~"v,ct.AvJ'<,1. is DEPARTMENT OF HEALTH AND HUMAN SERVICES 
(+~a 
E., 
OFFICE OF INSPECTOR GENERAL 
'<lfydmt  WASHINGTON, DC  20201 
TO:  Seema Verma 
HAY  1 5 2018 
Administrator 
Centers for Medicare & Medicaid Services 
FROM: 
SUBJECT:  Comparison ofA  verage Sales Prices and Average Nfamifacturer Prices: Results 
for the Fourth Quarter of 2017, OEI-03-18-00270 
This memorandum provides the results of the Office oflnspector General's (OIG) comparison of 
average sales prices (ASPs) and average manufacturer prices (AMPs) for the fourth quarter 
of 2017.  By law, OIG must notify the Secretary of Health and Human Services if the ASP for a 
particular drug exceeds the drug's AMP by 5 percent or more.  If that threshold is met, the 
Secretary may disregard the drug's ASP when setting the reimbursement amount and shall 
substitute the payment amount with the lesser of either the widely available market price or 
103 percent of the AMP. 
In April 2013, the Centers for Medicare & Medicaid Services (CMS) began making price 
substitutions in accordance with the November 2012 final rule specifying the circumstances 
under which AMP-based price substitutions shall occur.  Pursuant to the rule, CMS substitutes 
103 percent of the AMP for the ASP-based reimbursement amount when OIG identifies a drug 
code that exceeds the 5-percent threshold for 2 consecutive quarters or 3 of the previous 
4 quarters.  CMS lowers reimbursement amounts only when ASP and AMP comparisons are 
 based on the same set of drug products (i.e., based on complete AMP data).  To prevent CMS 
from inadvertently raising the Medicare reimbursement amount, a price substitution shall not be 
implemented if the substituted amount would exceed the ASP-based payment amount for the 
quarter in which the price substitution would take effect.  Nor shall price substitutions be 
implemented for drugs that the Food and Drug Administration (FDA) identifies as being in short 
supply. 
0 I G found that in the fourth quarter of 2017, 10 drug codes met CMS' s price substitution criteria 
by exceeding the 5-percent threshold for 2 consecutive quarters or 3 of the previous 4 quarters, 
based on complete AMP data.  OIG found one additional drug code that, based on complete 
AMP data, exceeded the 5-percent threshold.  However, at the time of our analysis, FDA 
identified this drug code as being in short supply.  Another six drug codes had ASPs that  Page 2-Seema Verma 
exceeded the AMPs by at least 5 percent in the fourth quarter of 2017, based on complete AMP 
data, but these drug codes did not meet other CMS price substitution criteria. 
We will provide you with the results of our pricing comparison for the fourth quarter of 2017, as 
well as the results for the 3 previous quarters.  This information will be transmitted via our 
secure file transfer system.
DEPARTME  T OF HEALTH AND HUMAN SERVICES 
OFFICE OF INSPECTOR GENERAL 
WASHINGTON  DC  2020 I 
TO:  Seema Verma, M.P.H.
Administrator
Centers for Medicare & Medicaid Services
SUZANNE Digitally signed by 
SUZANNE MURRIN 
FROM:  Suzanne MurrinMURRIN  Date: 2018.08.03 
16:48:33 -04'00' 
DeputyInspector General 
for Evaluation and Inspections 
SUBJECT:  Comparison of Average Sales Prices and Average Manufacturer Prices: Results 
for the First Quarter of 2018, OEI-03-18-00280
This memorandum provides the results of the Office of Inspector Generals (OIG) comparison of 
average sales prices (ASPs)and average manufacturer prices (AMPs) for the first quarter 
of2018.  By law, OIG must notify the Secretary of Health and Human Services if the ASP for a 
particular drug exceeds the drugs AMP by 5 percent or more.  If that threshold is met, the 
Secretary may disregard the drugs ASP when setting the reimbursement amount and shall 
substitute the payment amount with thelesser of either the widely available market price or 
103percent of the AMP.  
In April 2013, the Centers for Medicare & Medicaid Services (CMS) began making price 
substitutions in accordance with theNovember 2012 final rule specifyingthe circumstances 
under which AMP-based price substitutions shall occur.  Pursuant to the rule, CMS substitutes 
103percent of the AMP for the ASP-based reimbursement amount when OIG identifies a drug 
code that exceeds the 5-percent threshold for2consecutive quarters or 3of the previous
4quarters. CMS lowers reimbursement amounts only when ASP and AMP comparisons are 
based on the same set of drug products (i.e., based on complete AMP data).  To prevent CMS 
from inadvertently raising the Medicare reimbursement amount, a price substitution shall not be 
implementedifthe substituted amount would exceedthe ASP-based payment amount for the 
quarter in which the price substitution would take effect.  Nor shall price substitutions be 
implementedfor drugs that the Food and Drug Administration (FDA) identifiesas being in short 
supply. Page 2Seema Verma, M.P.H.
OIG found that inthe first quarter of 2018,14 drug codes met CMSs price substitution criteria 
by exceeding the 5-percent threshold for 2consecutive quarters or 3 of the previous 4quarters,
based on complete AMP data. OIG found oneadditional drug code that, based on complete 
AMP data,exceeded the 5-percent threshold. However, at the time of our analysis, FDA 
identified this drug code as being in short supply. Another fivedrug codes had ASPs that
exceeded the AMPs by at least 5 percent in the first quarter of 2018,based on complete AMP 
data,but these drug codes did not meet other CMS price substitution criteria.
We will provide you with the results of our pricing comparison for the first quarter of 2018, as 
well as the results forthe 3previous quarters.  This information will be transmitted via our 
secure file transfer system.
OIG REPORT:  Appropriateness of 340B Drug Prices,   Report 
Number:  OEI-05-02-00070 dated June 2004 
 
 
This subject report is withdrawn effective October 21, 2004.  The OIG is currently 
reviewing the data contained in the report.  Once the review is complete, any revisions, if 
appropriate, will be made and the report will be reissued. 
 
 
October 21, 2004
Department of Health and Human Servces

OFFICE OF

INSPECTOR GENERAL

FOR 
MEDICARE BENEFICIARIES' 
PLANS 
FINANCING NURSING HOME CARE 
:v. 
Richard P. Kusserow 
INSPECfOR GENERA 
"0 
OEI-090-89031 
cIa  PUROSE 
This report presents Medicare beneficiaries' assessments of their 
abilty to pay for 
nursing home care. 
BACKGROUN 
In 1989, the Offce of Inspector General (OIG) for the Department of Health and 
Human Servces conducted a national survey to assess Medicare beneficiaries 
experience and satisfaction with various aspects of the Medicare program. The results 
are in the report "A Survey of Medicare Beneficiary Satisfaction: 1989" (OAI-04-89
89040). In one segment of the survey, we ascertained beneficiaries' knowledge of 
nursing home careprovisions--and.thei  p()tentia1-abilty.to-
pay for such servces. 
In 1991, the OIG conducted another satisfaction survey, the findings of which are 
presented in the report "Medicare Beneficiary Satisfaction: 1991" (OEI-04-90-89030). 
The Office of Management and Budget (OMB) reviewed the questionnaires for both 
surveys. During the clearance process for the 1991 survey, the OMB asked the OIG 
to again evaluate the abilty of beneficiaries to pay for nursing home care. 
MEllODS 
In December 1990 we mailed a survey instrument to 637 randomly selected 
beneficiaries for whom Medicare Part B claims had been fied in Calendar Year 1989. 
Their participation in the survey was voluntary. 
A total of 519 beneficiaries returned completed questionnaires, for a response rate of 
83 percent. 
FIINGS 
In the 1991 survey we found that: 
benri 
nug 
Most  cannt pay for  home care. 
Of the 519 respondents, 445 answered questions on their abilty to pay for nursing 
home care. Seventy-two percent said they cannot pay for nursing home care, should 
they ever need it. 
Of those who said they have a way to pay for nursing home care: 
Fort-seven percent said they would rely on personal assets such as savings. 
One-third (33 percent) said they would rely on private insurance.  Twenty percent said they would rely on Medicaid, although only half of that 
group said they are currently covered by Medicaid. 
benciri  nug 
Some  said the thought tht Medicare pays for  home care. 
Twenty-five percent of beneficiaries said they thought that Medicare pays for nursing 
home custodial care, although it does not. Medicare only pays for skilled nursing care 
and then for just a limited period of time and under specific circumstances. 
CONCLUSION 
Most beneficiaries (72 percent) indicate they have not made adequate plans should 
they need nursing home- care;.-This--finding..is identical to. the-results obtained from the 
1989 survey.
EXECUTIVE SUMMARY 

Skilled Nursing Facilities (SNFs) cannot accept Medicare 

patients in need of physical therapy (PT) unless they can 

provide the services directly or make arrangements with out- 

side providers to render the needed services.  This inspec- 

tion analyzed the various arrangements used by SNFs to 

provide PT and concludes that: 

o 	 Eighty percent of the 241 sampled SNFs used arrange- 

ments that are economical and efficient. 

o 	 Twenty percent of sampled SNFs used arrangements that 

are not economical or efficient, are vulnerable to 

program abuse, and can place an unnecessary financial 

burden on the beneficiary. 

The key factor contributing to the vulnerability of an 

arrangement was SNF loss of control over billing.  In 

vulnerable arrangements, billing was split between the SNF 

and the outside provider or entirely the responsibility of 

the outside provider.  Allowing an outside provider to bill 

for SNF inpatient services is known as unbundling. 

Inpatient costs are broken out of SNF operating costs and 

services are billed by providers other than the SNF.  Due to 

different reimbursement policies, PT payments to outside 

providers were consistently higher than PT payments 

resulting from SNF billings.  As a result of unbundling, this 

inspection identified: 

o 	 excessive Medicare payments estimated at $11 million 

during fiscal year (FY) 1984; 

o 	 avoidable beneficiary co-payments estimated as $4 

million in FY 1984; 

o 	 the potential for duplicate and triplicate billing; 

o 	 avoidable administrative costs estimated at $1 million 

in FY 1984; and 

o 	 inconsistencies in Medicare statutes, regulations, 

policies and procedures. 

In order to prevent excessive program and beneficiary 

payments, the Health Care Finance Administration (HCFA) 

should propose legislation that: 

o 	 Prohibits unbundling of PT provided to Medicare 

patients residing in certified or non-certified beds 

of a participating SNF.