CMS Publishes Final 2011 Physician Fee Schedule; Prohibits Billing for Intentional Overfill

November 8, 2010

On Nov. 3, 2010, the Centers for Medicare and Medicaid Services (CMS) issued a 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 the FDA.

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.