(Medicare Claims Processing Manual)

The payment limits included in the revised ASP and Not Otherwise Classified (NOC) payment files supersede the payment limits for these codes in any publication published prior to this document.  20.1.1 - Online Pricing Files for Average Sales Price  (Rev. 509, Issued: 03- 18-05; Effective:  07 -01-05; Implementation: 07 -05-05)  Beginning July1, 2005, the standard for the number of online pricing files maintained by DME MACs for determining the applicable allowed amount for paying drug claims is eight fee screens/pricing files for Part B drugs billed to DME MACs for payment on a f ee-for-service basis.   20.1.2 - Average Sales Price (ASP) Payment Methodology (Rev. 3292, Issued: 07- 10-15, Effective: 07 -01-15, Implementation: 07- 06-15)  Section 303(c) of the Medicare Modernization Act of 2003 (MMA) revised the payment methodology for Part B covered drugs and biologicals that are not priced on a cost or prospective payment basis.  Per the MMA, beginning January 1, 2005, the vast majority of drugs and biologicals not priced on a cost or prospective payment basis will be priced based on the average sales price (ASP) methodology.  Pricing for compounded drugs is performed by the local contractor.  Beginning in July 2015, claims for compounded drugs shall be submitted using a compounded drug, not otherwise classified (NOC) HCPCS code.  Beginning in 2006, all ESRD drugs furnished by both independent and hospital -based ESRD facilities, as well as specified covered outpatient drugs, and drugs and biologicals with pass -through status under the Outpatient Prospective Payment System (OPPS), will be priced based on the ASP methodology.  The ASP methodology is  based on quarterly data submitted to CMS by manufacturers. CMS will supply contractors with the  ASP drug pricing files for Medicare Part B drugs on a quarterly basis.  Contractors will be notified of the availability of this file via a Recurring Update Notification.  Visit http://www.cms.gov/Medicare/Medicare -Fee-for-Service -Part-B-Drugs/McrPartBDrugAvgSalesPrice/index.html?redirect=/McrPartBDrugAvgSalesPrice for more information about the ASP payment methodology.  The absence or presence of a HCPCS code and its associated payment limit does not indicate Medicare coverage of the drug or biological.  Similarly, the inclusion of a payment limit within a specific column does not indicate Medicare coverage of the drug in that specific category.  The local Medicare contractor processing the claim shall make these determinations.   Beginning January 1, 2005, in general, the payment allowance limits for Medicare Part B drugs and biologicals that are not paid on a cost or prospective payment basis are 106 percent of the ASP.  Beginning January 1, 2006, in general, the payment allowance  limits for ESRD drugs when separately billed by freestanding and hospital -based ESRD facilities, as well as specified covered outpatient drugs, and drugs and biologicals with pass -through status under the OPPS, will be paid based on 106 percent of the ASP .  CMS will update the payment allowance limits quarterly.   As announced in late 2006, CMS has been working further to ensure that accurate and separate payment is made for single source drugs and biologicals as required by Section 1847A of the Social Security Act.  As part of this effort, we have also reviewed how  we have operationalized the terms single source drug, multiple source drug, and biological product in the context of payment under Section 1847A.  For the purposes of identifying single source drugs and biological products subject to payment under Section 1847A, generally CMS (and its contractors) will utilize a multi- step process.  We will consider:    The FDA approval;    Therapeutic equivalents as determined by the FDA; and    The date of first sale in the United States.   For a biological product (as evidenced by a new FDA Biologic License Application or other relevant FDA approval) or a single source drug (that is, not a drug for which there are two or more drug products that are rated as therapeutically equivalent in the most recent FDA Orange Book) first sold in the United States after October 1, 2003, the payment limit for a biological product or single source drug will be based on the pricing information for products marketed or sold under the applicable FDA approval.  As appropriate, a unique HCPCS code will be assigned to facilitate separate payment.  Separate payment may be operationalized through use of not otherwise classified HCPCS codes.  20.1.3 - Exceptions to Average Sales Price (ASP) Payment Methodology  (Rev. 2437, Issued: 04- 04-12; Effective: 01 -01-13; Implementation: 01 -01-13)  The payment allowance limits for blood and blood products (other than blood clotting factors) that are not paid on a reasonable charge or prospective payment basis, are determined in the same manner the payment allowance limits were determined on October 1 , 2003.  Specifically, the payment allowance limits for blood and blood products are 95 percent of the average wholesale price (AWP) as reflected in the published compendia.  The payment allowance limits will be updated on a quarterly basis.  Blood and blood products furnished in the hospital outpatient department are paid under OPPS at the amount specified for the Ambulatory Payment Classification (APC) to which the product is assigned.   The payment allowance limits for infusion drugs furnished through a covered item of durable medical equipment on or after January 1, 2005, will continue to be 95 percent of the AWP reflected in the published compendia as of October 1, 2003, unless the drug is compounded or the drug is furnished incident to a professional service.  The payment allowance limits for infusion drugs furnished through a covered item of durable medical equipment that were not listed in the published compendia as of October 1, 2003, (i.e., new drugs) are 95 percent of the first published AWP unless the drug is compounded or the drug is furnished incident to a professional service.   The payment allowance limits for influenza, Pneumococcal and Hepatitis B vaccines are 95 percent of the AWP as reflected in the published compendia except where the vaccine is furnished in a hospital outpatient department.  Where the vaccine is administered in the hospital outpatient department, the vaccine is paid at reasonable cost.  CMS will supply contractors with the payment allowance limits annually to be effective on August 1 of each year.  Contractors will be notified of the availability of payment allowance limits via a Recurring Update Notification.   The payment allowance limits for drugs and biologicals that are not included in the ASP Medicare Part B Drug Pricing File or Not Otherwise Classified (NOC) Pricing File, other than new drugs that are produced or distributed under a new drug application (or other application) approved by the Food and Drug Administration, are based on the published Wholesale Acquisition Cost (WAC) or invoice pricing, except under OPPS where the payment allowance limit is  95 percent of the published AWP.  In determining the payment limit based on WAC, the contractors follow the methodology specified in Publication. 100- 04, Chapter 17, Drugs and Biologicals, for calculating the AWP, but substitute WAC for AWP.  The payment limit is 106 percent of the lesser of the lowest- priced brand or median generic WAC.   MACs shall develop payment allowance limits for covered drugs when CMS does not supply the payment allowance limit on the ASP drug pricing file.  At the contractors  discretion, contractors may contact CMS to obtain payment limits for drugs not included in the quarterly ASP or NOC files or otherwise made available by CMS on the CMS Web site.  If the payment limit is available from CMS, contractors will substitute CMS -provided payment limits for pricing based on WAC or invoice pricing. CMS will provide the payment limits either directly to the requesting contractor or via posting an MS Excel file on the CMS Web site.   The payment allowance limits for new drugs and biologicals that are produced or distributed under a new drug application (or other new application) approved by the Food and Drug Administration, and that are not included in the ASP Medicare Part B Drug Pric ing File or Not Otherwise Classified (NOC) Pricing File, are based on 106 percent of the WAC, or invoice pricing if the WAC is not published, except under OPPS where the payment allowance limit is 95 percent of the published AWP.  This policy applies only to new drugs that were first sold on or after January 1, 2005.  At the contractors  discretion, contractors may contact CMS to obtain payment limits for new drugs not included in the quarterly ASP or NOC files or otherwise made available by CMS on the CMS Web site.  If the payment limit is available from CMS, contractors will substitute CMS -provided payment limits for pricing based on WAC or invoice pricing.  CMS will provide the payment limits either directly to the requesting contractor or via posting an MS Excel file on the CMS Web site.   The payment allowance limits for radiopharmaceuticals are not subject to ASP.  A/B MACs (B) should determine payment limits for radiopharmaceuticals based on the methodology in place as of November 2003 in the case of radiopharmaceuticals furnished in othe r than the hospital outpatient department.  Refer to Chapter 17, 90.2 of the manual regarding radiopharmaceuticals furnished in the hospital outpatient department.   20.2 - Single Drug Pricer (SDP)  (Rev. 397, Issued:  12- 16-04, Effective:  01 -01-05, Implementation:  01- 03-05)  Effective January 1, 2003, contractors pay drug claims on the basis of the prices shown on the SDP files, if present.   On a quarterly basis, CMS furnishes three SDP files to all MACs and ROs except A/B MACs (HHH) and DME MACs, as follows:   1. HCPCS Drug Pricing File   a. CMS furnishes a  SDP file that contains drugs identified by a code established by the Health Care Procedure Code System (HCPCS).  This HCPCS drug- pricing file (HDPF) contains:    Every HCPCS drug code for every drug for which claims are submitted to A/B MACs (B) (excluding DME MACs);    With respect to each such HCPCS code, the unit of measure by which such HCPCS code is defined;    With respect to each HCPCS code and unit of measure, the Medicare allowed amount;    With respect to each HCPCS code for which the price has changed from the price determined in the previous quarter, an indication as to whether the new price is higher or lower than the price determined in the prior quarter;    With respect to each new HCPCS code, an indicator to that effect; and    With respect to each deleted HCPCS code, an indicator to that effect.   b. The filename convention is as follows: (1) hdpf in the first 4 positions (2) positions 5- 8 correspond to the year and quarter for which the file is applicable (e.g., hdpf0301.xls).  c. An HDPF will be made 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.  2. Not otherwise classified (NOC) Drug Pricing File   a. CMS furnishes a NOC SDP file for drugs not otherwise classified.  This NOC drug pricing file (NDPF) contains:    With respect to every drug NOC under the HCPCS for which claims are submitted to A/B MACs (B) (excluding DME MACs), the NDC code and drug name;    With respect to each such NDC code, the unit of measure by which such drug is covered;    With respect to each NOC drug, the Medicare allowed amount;    With respect to each NOC drug for which the price has changed from the price determined in the previous quarter, an indication as to whether the new price is higher or lower than the price determined in the prior quarter;    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: