CMS should consider pursuing rulemaking to expand the price substitution policy in Medicare Part B.

When Congress established ASP as the basis for Medicare Part B drug reimbursement, it required OIG to monitor the relationship between ASPs and AMPs. If OIG finds that the ASP for a drug exceeds the AMP by 5 percent, CMS substitutes the ASP-based reimbursement amount with the lesser of the widely available market price or 103 percent of AMP. CMS may make this price substitution when OIG identifies a drug that exceeds the 5 percent threshold in the two previous quarters or three of the four previous quarters. OIG recommends that CMS should consider broadening its price-substitution criteria. For example, a more expansive policy might include drugs that exceed the 5-percent threshold in a single quarter. Such a revised policy could still provide CMS the discretion to forgo a price substitution when warranted. Average Sales Prices and Average Manufacturer Prices for Medicare Part B Drugs: An Overview of 2013 (OEI-03-14-00520)