OIG: Medicare Spent $366 Million More by Including Self-Administered Drugs in Part B Calculations

Medicare and its beneficiaries would face significantly lower costs for drugs if the Centers for Medicare and Medicaid Services excluded noncovered versions of drugs while setting Part B drug payments, according to the HHS Office of Inspector General.

Under CMS policy, all drugs with the same FDA approval number are considered the same drug or biologic for payment purposes.

The result of this practice is that when the agency determines Part B payments for prescription drugs, it factors in data from self-administered versions, even when the CMS Healthcare Common Procedure Coding System code states it is not for use in those cases. This inclusion, the report states, resulted in Medicare and its beneficiaries paying $366 million more from 2014 to 2016 for two drugs, Cimzia and Orencia.