OIG Announces 11 Drugs To Receive New Pricing

16 Aug, 2019 F.J. Thomas


Washington, DC (WorkersCompensation.com) – A study comparing the average sales price and average manufacturer prices shows 11 drugs must be sent for price substitution review by the Centers for Medicare and Medicaid Services. The Office of Inspector General’s quarterly comparison identifies medications for which the ASP is at least 5 percent higher than the AMP.

Per the Social Security Act, the OIG reviews ASP pricing against AMP. Any drug that exceeds the pricing limit is required to undergo a review for an appraisal of substitute pricing to avoid overpayment by Medicare. When a claim exceeds the 5 percent threshold for two consecutive quarters or three of the previous four quarters, CMS will subsite 103 percent of the AMP rate or “widely available market price” for the ASP pricing.

“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,” wrote Suzanne Murrin, deputy inspector general for the Health and Human Services Department’s Evaluation and Inspections in a letter to the CMS. “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 identifies as being in short supply.”

According to the OIG report, one drug exceeded the 5 percent threshold but the FDA identified it as being in short supply and it, therefore, was not submitted.

Drug pricing has recently been the focus of the OIG. In July, the OIG suggested that “ CMS should strengthen oversight of Part D payments for compounded topical drugs to prevent fraud, waste, and abuse while maintaining appropriate access,” in its Top Recommendations for reducing waste and fraud. Included in the report is also a 2011 recommendation that was not implemented suggesting that CMS seek legislative assistance in requiring manufacturers to submit average ASP and AMP pricing.


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    About The Author

    • F.J. Thomas

      F.J. Thomas has worked in healthcare business for more than fifteen years in Tennessee. Her experience as a contract appeals analyst has given her an intimate grasp of the inner workings of both the provider and insurance world. Knowing first hand that the industry is constantly changing, she strives to find resources and information you can use.

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