On Nov. 3, 2010, the Centers for Medicare and Medicaid Services (CMS) issued
final rule to implement changes to the Medicare Physician Fee Schedule and
other Medicare Part B payment policies for services furnished on or after Jan.
1, 2011. In addition, the final rule addresses, implements, and discusses
certain provisions of the Affordable Care Act of 2010.
The final rule also provides that CMS will not make payment for amounts of
drugs and biologicals in excess of the amount reflected on the product’s
FDA-approved label. The final rule provides a regulatory update to address the
issue of “intentional overfill.” As of Jan. 1, 2011, 42 C.F.R. part 414 Subpart
J – Average Sales Price as the Basis for Payment will be revised to provide that
“(i) Medicare ASP payment limits are based on the amount of product in the vial
or container as reflected on the FDA-approved label” and “payment for amounts of
free product, or product in excess of the amount reflected on the FDA approved
label, will not be made under Medicare” and “no payment is made for amounts of
product in excess of that reflected on the FDA-approved label.”
Overfill is the contents of a vial or syringe that goes above and beyond the
volume stated on the FDA-approved label. For example, a single-dose vial of a
drug may contemplate that a 1.0 ml injection will be administered to a patient.
However, the actual volume in the vial often exceeds 1.0 ml. This excess is known as
“overfill.” Overfill is designed to account for variability in the manufacturing
process and in the administration of the dose. A manufacturer must disclose its
target overfill for a drug when submitting its Biological License Application to
Providers commonly make use of overfill to varying degrees. Historically,
many providers have understood that CMS and other payors condone these
practices, so long as the drug provided to a patient is reasonable and
necessary, and that the provider is complying with all applicable CMS survey
guidance. CMS has taken the position in the final rule that overfill is included
without charge to the provider, and thus is not reimbursable by Medicare.
In related news, recent survey data from the Kidney Care Council revealed
that approximately 98% of dialysis providers have opted into the new dialysis
bundled payment system effective as of 2011. Industry experts cite the likely
impact of CMS’ Final Rule as a factor in some dialysis facilities opting into
the new payment system.