This week in Medicare updates—1/11/2023

January 11, 2023
Medicare Insider

CMS Should Bolster its Oversight of Manufacturer-Submitted Average Sales Price Data to Ensure Accurate Part B Drug Payments

On January 3, the OIG published a Review of CMS’ oversight of manufacturer-reported average sales price (ASP) data, as the data is used to help calculate Part B payments and therefore there are concerns about the impact of inaccurate data on Part B spending. The OIG found that there were gaps in CMS’ oversight of this data, as CMS’ quality assurance procedures did not include checks to ensure the accuracy of manual processes employed to analyze the data used to calculate Part B payment amounts. The OIG also found CMS does not leverage its data collection system to produce reports that could monitor ASP data quality and aid in oversight. Because of invalid or missing data, CMS had issues calculating ASP-based payment amounts for a small amount of drug codes, and that can often lead to higher drug payment amounts for Part B drugs. The OIG also found that 24% of drug codes were missing ASP data for drugs within that code in at least one quarter from 2016-2020. The OIG recommends CMS determine a strategy to strengthen its internal controls for ensuring the accuracy of Part B drug payments. CMS concurred with the OIG recommendations.


Manufacturers May Need Additional Guidance to Ensure Consistent Calculations of Average Sales Prices

On January 3, the OIG published a Review regarding accuracy of manufacturer-calculated average sales price (ASP) data. The OIG aimed to compare ASPs for the 30 highest-expenditure drugs in Part B to different benchmark prices for prescription drugs in the second quarter of 2021. The OIG’s comparison did not reveal much insight into potential inaccuracies, but the accompanying manufacturer surveys the OIG included in the audit helped the OIG identify some inconsistencies in manufacturer calculations and areas where manufacturers would like additional CMS guidance. The OIG said manufacturers expressed concern that CMS offered more guidance and regulation for calculating average manufacturer prices and best prices in Medicaid than it did for Medicare, which manufacturers said causes them to rely on assumptions when calculating ASP. 

The OIG recommends CMS review current guidance on this topic and determine whether additional guidance would ensure more accurate and consistent ASP calculations. The OIG specifically identified nine areas where manufacturers said additional guidance might be necessary, and it suggests CMS prioritize issues that may have a greater effect on pricing and payments. CMS concurred with the recommendations.


Home Health Prospective Payment System (HH PPS) Rate Update for CY 2023

On January 4, CMS published Medicare Claims Processing Transmittal 11777, which rescinds and replaces Transmittal 11702, dated November 10, 2022, to revise the policy section with the most recent changes to the rural add-on policy. These changes came from the Consolidated Appropriations Act of 2023, which extended the rural add-on policy by an increase of 1% of the payment amount made for home health services provided in the low population density category for 2023. The original transmittal was published regarding the implementation of changes from the CY 2023 HH PPS Final Rule for various payment rates, national per-visit amounts, the cost-per-unit payment amounts, and more. 

CMS published MLN Matters 12957 on the same date to accompany the transmittal. 

Effective date: January 1, 2023

Implementation date: January 3, 2023


Correction Notice: CY 2023 Hospital Outpatient Prospective Payment System (OPPS) Final Rule

On January 4, CMS published a Correction Notice in the Federal Register regarding corrections to the CY 2023 OPPS final rule. Errors include the omission of certain cross references related to the definition of primary roads as a CAH requirement in sections about transitioning to rural emergency hospitals, the inadvertent use of CAH instead of REH in certain places in the the regulatory text, and other minor typos. 

This correction is effective January 1, 2023.


Updated List of Laboratory Tests Subject to Exceptions to Laboratory Date of Service Policy

On January 4, CMS published the Download Link to the updated list of laboratory tests subject to exceptions to the lab date of service policy. 


Direct Mailing Notification to Hospice Providers Regarding the Value-Based Insurance Design (VBID) Model, Hospice Benefit Component, Participating Medicare Advantage Organizations

On January 5, CMS published One-Time Notification Transmittal 11776 regarding requirements for MACs for a direct mailing that MACs will send to hospice providers to raise awareness of the VBID Model hospice benefit component and to provide education on participation and billing for Medicare Advantage enrollees receiving services in affected areas. The letters MACs are supposed to send are located at the end of the 90 pages of attachments to the transmittal.

Effective date: February 6, 2023

Implementation date: February 6, 2023


April Quarterly Update to ICD-10-CM Codes, Guidelines

On January 5, the CDC posted the updated ICD-10-CM coding guidelines and files for the April 1, 2023 quarter. Most of the coding changes apply to codes for social determinants of health, such as inadequate access to resources, threats of violence, and more.


Clinical Laboratory Fee Schedule - Medicare Travel Allowance Fees for Collection of Specimens and New Updates for 2023

On January 6, CMS published Medicare Claims Processing Transmittal 11778 regarding the 2023 Medicare travel allowance fees for specimen collection and to clarify various laboratory specimen collection fee policies. 

Effective date: January 1, 2023

Implementation date: January 23, 2023