Reimbursement Rules with Zero or Negative ASP
Every year, CMS publishes their Physician Fee Schedule Rule. One of the areas I want to highlight in the recently issued 2025 rule is CMS's payment limit calculation for $0 or negative dollar ASP sales. I think it is always important to flag the actual business impact of all things related to government pricing, and the ASP reimbursement is key for many manufacturers selling buy and bill drugs.
Generally speaking, most ASP calculations produce a positive ASP price and the number of units sold, and can be directly used in calculating the quarterly reimbursed for a unique HCPCS code (i.e. J Code) or a blended HCPCS code. In rare instances, whether due to relabeling or price concession timing, a manufacturer may calculate a 0 or a negative value for ASP. Since the CMS guidance requires a manufacturer to report ASP as calculated, this raises questions of how the drug will be reimbursed.
Starting on page 470 of the rule, CMS states that:
Currently, when all NDCs assigned to a HCPCS code have negative or zero manufacturer's ASP data, CMS establishes the payment limit in other ways. As appropriate given the data available for a drug, CMS will either calculate a payment limit for a billing and payment code based on other applicable and available pricing data or not include a payment limit for the billing and payment code on the ASP pricing file. When a payment limit for a drug separately payable under Part B is not included in the ASP pricing file, the payment limit is based on either the published or Wholesale Acquisition Cost (WAC) or invoice pricing, as described in section 20.1.3, Chapter 17 of the Medicare Claims Processing Manual.
They go on to clarify the meaning of "available pricing data" on page 473:
Therefore, we are proposing ... a methodology for calculating payment limits in certain circumstances based on manufacturer's ASP for the most recent quarter for which data is available. Specifically, we propose to specify that positive manufacturer's ASP data are considered “available” and that negative or zero manufacturer's ASP data are considered "not available" for purpose of CMS calculating a payment limit under the statute.
There are differences in how CMS applies this in situations where all or only some of the NDCs under a HCPCS code have 0 or negative ASP, and CMS does give themselves some flexibility in determining which price point to utilize, so you will need to monitor your ASP pricing files to determine the reimbursement price CMS sets.
Should you have any questions about your ASP calculations, reporting or other Medicare questions we’d be happy to further discuss your particular scenario - please feel free to reach out to the Woven team to learn more!
Published on July 23, 2024 by Scott Hoffman