Drugs and biologicals are reimbursed using one of several methodologies:

  • CMS Average Sales Price (ASP) Pricing File
  • CMS Not Otherwise Classified (NOC) Pricing File
  • Wholesale Acquisition Cost (WAC) plus six percent or invoice pricing
  • Other pricing methodology (employed for radiopharmaceuticals)

For drugs and biologicals reimbursed using ASP methodology:

  • Payment is based on 106 percent of the ASP
  • There are several exceptions to the ASP payment methodology, including: blood and blood products; some drugs infused through a covered item of Durable Medical Equipment and certain vaccines
  • ASP and NOC pricing files are available on the CMS website.

For drugs or biologicals reimbursed using WAC or invoice pricing:

  • WAC pricing applies to drugs that are not reimbursed based on CMS ASP or the NOC Pricing Files
    • When WAC pricing is available, Palmetto GBA will base the reimbursement on 106 percent of the published WAC amount available in our drug compendia resources
    • No invoice is needed when a WAC amount is available
    • The payment limit is based on the lesser of the lowest brand or median generic WAC plus six percent
    • The payment allowance for new drugs that were first sold on or after January 1, 2005, is based on 106 percent of the WAC
    • Information on determining WAC pricing is available in CMS Medicare Claims Processing Manual, chapter 17, section 20.1.3 on the CMS website. (PDF, 527 KB)
  • When invoice pricing is used, each Medicare contractor determines how many invoices are necessary to determine the reimbursement amount
    • Palmetto GBA requires that invoices be submitted with each claim, when the drug or biological is not priced based on ASP and there is no WAC available
For radiopharmaceuticals:
  • Reimbursement for radiopharmaceuticals is based on 95 percent of the Average Wholesale Price (AWP), invoices or other reasonable payment methods/data made available.
  • Priced annually, effective January 1, based on the previous November's drug compendia sources.
  • This pricing methodology was in place in November 2003 and is currently used to determine reimbursement for radiopharmaceuticals

References:
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Contact Palmetto GBA JJ Part B Medicare

Provider Contact Center: 877-567-7271

Email JJ Part B

Contact a specific JJ Part B department


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