Medicare Part B Prescription Drug Dispensing and Supplying Fee Payment Rates Are Considerably Higher Than the Rates Paid by Other Government Programs

Medicare Part B would have saved millions of dollars in 2011 if dispensing fees for inhalation drugs administered through durable medical equipment and supplying fees for immunosuppressive drugs associated with an organ transplant, oral anticancer chemotherapeutic drugs, and oral antiemetic drugs used as part of an anticancer chemotherapeutic regimen had been aligned with the rates that Part D and State Medicaid programs paid. Part B paid $132.9 million in dispensing and supplying fees. We estimated that if Part B rates had been the same as the average Part D rates, Part B would have paid dispensing and supplying fees of $22 million, a savings of $110.9 million. We also estimated that if Part B rates had been the same as the average State Medicaid program rates, Part B would have paid dispensing and supplying fees of $26.6 million, a savings of $106.3 million.

We recommended that CMS amend current regulations to decrease the Part B payment rates for dispensing and supplying fees to rates similar to those of other payers, such as Part D and Medicaid. CMS did not concur with our recommendation and requested that OIG conduct a study to identify the specific activities involved with dispensing inhalation drugs and supplying oral drugs under Part B and collect information about the actual costs that are directly associated with dispensing these Part B drugs. We maintain that pharmacies are overpaid for dispensing drugs under Part B when compared with what they are paid for dispensing the same drugs under Part D and Medicaid.