Completed Work on Reimbursement Policy

A recent CMS press release announcing the Enhanced Drug Dashboard listed Orencia as the drug with greatest price increase among top Part B drugs. A November 2017 OIG report illustrates that a significant factor in this "increase" was a quirk in Part B reimbursement policy. Specifically, a higher-cost version of Orencia primarily intended for self-injection entered the market in 2014. Typically, drugs that are self-administered by patients are not covered under Medicare Part B. However, CMS interprets the law to require the inclusion of noncovered self-administered versions in limited circumstances when setting Part B payment amounts. As a result, Medicare Part B payment for a typical monthly dose of Orencia immediately jumped from $1,774 to $2,394 per month in 2014, despite the cost of the physician-administered version remaining stable. OIG recommended that CMS seek a legislative change that would provide the agency flexibility to determine when noncovered versions of a drug should be included in Part B payment amount calculations.