(Medicare Claims Processing Manual)

 With respect to each new NOC drug, an indicator to that effect; and    With respect to each deleted NOC drug, an indicator to that effect.   b. The filename convention is as follows: (1) ndpf in the first 4 positions (2) positions 5- 8 correspond to the year and quarter for which the file is applicable (e.g., the initial NOC files filename was ndpf0301.xls).  c. The CMS makes a revised NDPF available approximately 30 days before the beginning of each calendar quarter, i.e., on or about each February 1, May 1, August 1, and November 1.   NOTE TO A/B MACs (A) :  The NOC file does not necessarily contain all NOC drugs.  A/B MACs (A) must contact A/B MACs (B) to determine if there are other drugs the A/B MAC (B) has priced separately and request the prices for those drugs as needed.   3. The CMS furnishes a pricing documentation file (PDF) that contains only new drugs and biologicals for which a Medicare price has been established since the previous quarter:   a. The data in the drug pricing file, i.e., each HCPCS code and its Medicare allowed amount;   b. With respect to each HCPCS drug code, every product, as identified by its NDC code, that contains the same active ingredient as specified in the definition of the HCPCS code;   c. With respect to those NDC codes used to determine the Medicare- allowed amount, an indicator to that effect;  d. With respect to each such NDC, the price or prices used to determine the average wholesale price (AWP) of the product;   e. With respect to each such price, an identification of the source(s) of the price; and   f. With respect to each such source, the date, edition, and other information necessary and sufficient to enable CMS to verify the price.   Except as specifically noted, each A/B MAC (A) and (B) will:    Upon receiving the quarterly update files, execute its normal update process using the SDP files.  If necessary, the contractor shall process manually to implement SDP file prices effective with the beginning of the following quarter.    Compare the prices it paid previously with the prices shown on the prior SDP file; taking note of the unit pricing quantity shown on the applicable SDP file and comparing it to the unit pricing quantity to ensure that any apparent price changes are real.   o A/B MACs (B) must notify physicians of price changes.   o A/B MACs (A) must notify ESRD facilities (with respect to ESRD drugs not included in the composite rate) and hospitals (with respect to clotting factors) of price changes to the extent and in the manner you have done previously.   Advise the RO of any price on a SDP file it believes is not correct.   Not substitute its price for the price shown on an SDP file unless authorized to do so by a joint memorandum from CMS.   If updated prices, in whole or in part, are not made available on a timely basis, use the prices from the prior quarters SDP files to the extent necessary.   A/B MACs (B) continue to price drugs as outlined in 20.2 with respect to any drug that is not listed on the SDP files and with respect to any compounded drug that is not identified by a single NDC.   o Report to the RO, on or before March 1 of each year, whether any drugs are being priced separately, including but not limited to NOC drugs.  If one or more drugs are being priced separately, then the name of the drug, its NDC, the price determined, and the  source used to price drug must also be included in the report.    A/B MACs (A) and (B):  Publish current SDP prices on their Web site immediately upon receipt of the file from CMS.    A/B MACs (A):  As needed on a quarterly basis and within seven days of receipt of the SDP files, request, from A/B MACs (B), prices of drugs that A/B MACs (B) may price separately.   o A/B MACs (B):  Upon request, on a quarterly basis and within seven days of any such request, furnish to A/B MACs (A) within jurisdiction, free of charge, the subset of files, which includes drugs that are priced separately.    A/B MACs (A) and (B):  Respond to questions about price changes and the implementation of AWP pricing as done previously.  Contractors respond to questions about the SDP on the basis of these instructions.  Questions that cannot be answered should be refer red to the RO.   The MCS shared systems shall maintain eight fee screens/pricing files (a current period and seven prior periods) for Part B incident to drugs billed to A/B MACs (B) for payment on a fee -for-service basis.  ( NOTE: VIPS is waived and will continue to carry 5 pricing periods)    Since they post the updated SDP file to their Web site upon receipt from CMS, A/B MACs (B) are waived from the requirement to give 30 days advance notice for fee schedule changes with respect to drugs.   SDP does not preclude the use of inherent reasonableness or the establishment of local medical review policies, including the use of a least costly alternative.   o If a least costly alternative is determined and a price for the least costly alternative exists on the SDP, the SDP price for the least costly alternative must be used.    Medicare coverage determinations are independent of the SDP.  The presence or absence of a price for a particular drug in the SDP is irrelevant to Medicare coverage determinations.    EPO=Q codes are included in the SDP, applicable to physician claims.  The statutory limit for EPO applies to nonphysician claims.    Unit Measurement means the amount of whatever measurement is used in the code description (e.g., milligrams (mg)).   ROs:   1.  Advise A/B MACs (B) concerning the implementation of the SDP.  2.  Respond to questions about drug price changes.  3.  Respond to questions about the implementation of the AWP pricing methodology.  4.  Respond to questions about the SDP on the basis of these instructions.  5.  Refer any questions that cannot be answered to central office (CO) per item 6, below.   6.  Advise CO of matters that require CO attention.   20.3 - Calculation of the Payment Allowance Limit for DME MAC  Drugs  (Rev. 397, Issued:  12- 16-04, Effective:  01 -01-05, Implementation:  01- 03-05)  Payments for drugs billed to the DME MACs will be based on the implementation of the MPDIMA, beginning January 1, 2004, and will be paid at 85 percent of the AWP for HCPCS payment amounts based on the April 1, 2003 fee schedule.  Exceptions to this calcula tion are as follows:   The payment limits for infusion drugs furnished through an item of durable medical equipment on or after January 1, 2004, will be 95 percent of the October 1, 2003 AWP.    The payment limits for new drugs or biologicals will be 95 percent of the AWP. A new drug is defined as an unlisted drug (not currently covered by a HCPCS code) that was FDA approved subsequent to April 1, 2003.  A drug would not be considered new if:  The brand or manufacturer of the drug changed; a new formulation of the vial size is developed; or the drug received a new indication.   The payment limits for certain drugs studied by the OIG and GAO are based on the percentages of the April 1, 2003 AWPs specified on Table 1 in 20.   Payment limits determined under this instruction shall not be updated during 2004.  20.4 - Calculation of the AWP  (Rev. 397, Issued:  12- 16-04, Effective:  01 -01-05, Implementation:  01- 03-05)  See Business Requirements and Excel Spreadsheets at:   http://www.cms.gov/Regulations -and-Guidance/Guidance/Transmittals/downloads/R54CP.pdf    and  http://www.cms.gov/Regulations -and-Guidance/Guidance/Transmittals/downloads/R55CP.pdf   A/B MACs (B) must ensure that if any NDCs are added or deleted, the formulae are applied appropriately.   A separate AWP is calculated for each drug as defined by a HCPCS code.  Within each HCPCS code there may be a single source or there may be many sources, or there may be no source.    For a single -source drug or biological, the AWP equals the AWP of the single product.    For a multi- source drug or biological, the AWP is equal to the lesser of;    The median AWP of all generic forms of the drug or biological; or    The lowest brand name product AWP.   A brand name product is defined as a product that is marketed under a labeled name that is other than the generic chemical name for the drug or biological.   NOTE:  Repackagers  make the status of the drug a multi -source.   After determining the AWP, A/B MACs (B)  multiply it by 0.85 or 0.95, or other percentage, as applicable, and round to the nearest penny.  This is the drug payment allowance limit.  A/B MACs (B) round it in accordance with standard rounding procedure.  Part B coinsurance and deductible requirements apply.   In applying this procedure, A/B MACs (B) use the package sizes that are most commonly used for the most frequently administered dosage of the drug.   A/B MACs (A) get drug prices from the A/B MAC (B) for drugs not listed on the Single Drug Pricer.  20.5 - Detailed Procedures for Determining AWPs and the Drug Payment Allowance Limits (Rev. 397, Issued:  12- 16-04, Effective:  01 -01-05, Implementation:  01- 03-05)  20.5.1 - Background  (Rev. 397, Issued:  12- 16-04, Effective:  01 -01-05, Implementation:  01- 03-05)  Payment for drugs and biologicals under Medicare is determined by a standard methodology.  Law and regulations require that a drug payment allowance limit be used as described in 20.1 .  (See 42 CFR 405.517 and MPDIMA, Section 303(b).)   The earliest drug payment allowance limit effective in 2004 will not be subsequently updated during 2004.  When limits are initially established, A/B MACs (B)  inform A/B MACs (A)  and the provider community as described in paragraph 30 below.   20.5.2 - Review of Sources for Medicare Covered Drugs and Biologicals  (Rev. 397, Issued:  12- 16-04, Effective:  01 -01-05, Implementation:  01- 03-05)  A/B MACs (B) check updates for Medicare covered services or procedures for new codes or code description changes before updating files.   For new codes, the A/B MAC (B) Medical Staff determines coverage in accordance with the coverage rules in Chapter 15 of the Medicare Benefit Policy Manual.  A/B MACs (B) refer to common sources for drug pricing information.  Examples are the various Redbook products, Drug Facts and Comparisons, the FDA publication Approved Drug Products with Therapeutic Equivalence (the Orange Book), or the Hospital Formula ry Pricing Guide by MediSpan, Inc.  If a price cannot be located in the available sources, they contact the manufacturer of the drug.   If a code has a description change, A/B MACs (B)  adjust formulas to account for any changes in the strength or dosage of the drug.  For example, if a code is listed as 50 mg, and changed to100 mg. the drug payment allowance limit is adjusted to compensate for the difference in the dosage.   20.5.3 - Use of Generics  (Rev. 397, Issued:  12- 16-04, Effective:  01 -01-05, Implementation:  01- 03-05)  A/B MACs (B)  identify the generic name of the drug from the code description.  They always  rely on the CMS HCPCS tape file or an official HCPCS publication.   A/B MACs (B)  locate generic sources in the Drug Topics Redbook or other source based on the HCPCS description of the drug.  They use entries that match the strength of the drug described by the HCPCS code, e.g., 50 mg, 100 mg, etc.