MLN Matters. . .Information for Medicare Providers
(Issued by the Centers for Medicare & Medicaid Services)
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MMA - Drugs
Paid by Average Selling Price Beginning January 1,
2005
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Note: This article was
revised on December 16, 2004, to reflect revised
effective and implementation dates. Related
CR3232 was also reissued on December 16 for the
same purpose.
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Provider Types Affected
Physicians, suppliers, and providers
Provider Action Needed
Physicians, suppliers, and providers should note that
beginning January 1, 2005, the payment limit for Part B
drugs and biologicals, not paid on a cost or prospective
payment basis, will be paid based on the Average Sales
Price (ASP) plus 6 percent. Drugs will be paid based on
date of service and the lower of:
1) The submitted charge; or
2) The ASP plus 6 percent
Background
According to the
Medicare Prescription Drug Improvement and Modernization
Act of 2003 (MMA), beginning January 1, 2004 through
December 31, 2004, drugs and biologicals not paid on a
cost or prospective payment basis are paid based on
various standards specified in the statute, although the
default payment limit standard is 85 percent of Average
Wholesale Price (AWP).
This instruction notifies contractors (Part B Local
Carriers and Durable Medical Equipment Carriers
(DMERCs)) that the MMA mandates that drugs and
biologicals not paid on a cost or prospective payment
basis are to be paid based on the ASP beginning January
1, 2005.
Therefore, beginning January 1, 2005, the Centers for
Medicare & Medicaid Services (CMS) will:
- Supply contractors with a drug payment limit file
for drugs and biologicals
- Send quarterly updates of this file to
contractors
Payment will be based on:
- The lower of the submitted charge or the payment
limit on this file
- The date-of-service
Finally, contractors will:
- Develop payment limits when CMS does not supply a
payment limit for the drug on the file
- Continue to determine the payment limit for
compounded drugs
- Continue to determine the payment limit for new
drugs
Implementation
The
implementation date for this instruction is January 3,
2005.
Related Instructions
The
Medicare Internet Only Manual (IOM) has been edited with
revised and new sections to reflect changes implemented
with this instruction. These revised and new sections
include the following:
The Medicare Claims Processing Manual (Pub. 100-4),
Chapter 17 (Drugs and Biologicals):
- Section 10 (Payment Rules for Drugs and
Biologicals) - revised
- Section 20 (Payment Allowance Limit for Drugs and
Biologicals Not Paid on a Cost or Prospective Payment
Basis) - revised
- Subsection 20.1 (MMA Drugs) -
new
These revised and new sections of the Medicare Claims
Processing Manual are included in the actual instruction
(CR 3232) issued to your carrier or DMERC.
Additional Information
The
official instruction issued to your carrier regarding
this change may be found by going to:
http://www.cms.hhs.gov/Transmittals/
From that Web page, look for CR 3232 in the CR NUM
column on the right, and click on the file for that CR.
If you have any questions, please contact your
carrier/intermediary at their toll-free number, which may
be found at:
http://www.cms.hhs.gov/MedlearnProducts/downloads/CallCenterTollNumDirectory.pdf
Disclaimer
Medlearn Matters articles are prepared as a service to
the public and are not intended to grant rights or impose
obligations. Medlearn Matters articles may contain
references or links to statutes, regulations, or other
policy materials. The information provided is only
intended to be a general summary. It is not intended to
take the place of either the written law or regulations.
We encourage readers to review the specific statutes,
regulations, and other interpretive materials for a full
and accurate statement of their contents.
Related Change Request (CR) #:
3232
Medlearn Matters Number: MM3232 Revised
Related CR Release Date: December 16,
2004
Related CR Transmittal #: 397
Effective Date: January 1,
2005
Implementation Date: January 3, 2005
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