Price substitution policy works, OIG says
By HME News Staff
Updated 10:53 AM CDT, Tue September 5, 2023
WASHINGTON – Medicare and its enrollees have saved $73.4 million since 2013, because of CMS’s price substitution policy for Part B covered drugs, according to an August issue brief from the Office of Inspector General. They could have realized an additional $889,000 in savings in 2021, if CMS expanded the price-substitution criteria, the OIG says. When Congress established average sales prices (ASPs) as the basis for reimbursement for Medicare Part B drugs, it also provided a mechanism for monitoring market prices and limiting potentially excessive payment amounts. The Social Security Act mandates that the OIG compare ASPs with average manufacturer prices (AMPs), and if the OIG finds that the ASP for a drug exceeds the AMP by 5%, the act directs the secretary of Health and Human Services to substitute the ASP-based payment amount with a lower calculated rate. CMS makes this substitution only if the ASP for a drug exceeds the AMP by 5% in the two previous consecutive quarters or three of the previous four quarters. The issue brief is one in a series of annual reports— produced since CMS implemented the price-substitution policy in 2013—that quantifies the savings to Medicare and its beneficiaries that result from CMS’s price-substitution policy.
Comments