CMS Revises Medicare Part B Biosimilar Coding and Payment Policies

On November 1 and 2, 2017, the Centers for Medicare & Medicaid Services (“CMS”) released two final rules addressing changes to Medicare Part B reimbursement policies for biosimilars. These final rules—for the Medicare Physician Fee Schedule (“PFS”) and the Hospital Outpatient Prospective Payment System (“OPPS”)—announced new directions for both the coding and payment policies initially developed in 2015. Beginning in 2018, instead of classifying biosimilars with the same reference product in the same Healthcare Common Procedural System (“HCPCS”) code, CMS will establish a unique code for each biosimilar product; and instead of calculating a single blended payment rate, CMS will calculate a payment rate specific to each biosimilar product. In addition, for qualifying biosimilars, instead of considering only the first biosimilar product for the reference product for OPPS pass-through payment status, each biosimilar will be eligible. Our prior alert on this topic is available here.

In its 2018 final rules, CMS indicated that it was persuaded that the change in policy will encourage innovation and address concerns about a stronger marketplace, access, and provider and patient choices. This client alert provides an overview of both CMS’s current and new reimbursement policies. We also provide as background the current Food and Drug Administration (“FDA”) biosimilar landscape in the United States.