news image

August 18, 2015

By Gary A. Puckrein, PhD

Proposed Medicare Part B Reimbursement Rate Cover


The Centers for Medicare and Medicaid Services (CMS) is the largest single payor of healthcare in the United States. Nearly 90 million Americans rely on healthcare benefits provided through programs that are administered through Medicare, Medicaid, and the State Children’s Health Insurance Program (SCHIP)[1]. Their programmatic reach is broad, and their reimbursement policies form the contextual framework within which the commercial sector defines its payment parameters.

On July 8, 2015, CMS proposed the addition of a new rule to its 2016 Medicare Physician Fee Schedule that seeks to assign one Healthcare Common Procedure Coding System (HCPCS) code to all biosimilars to a particular reference product.[2] This new rule also defines reimbursement for all biosimilars associated with a particular HCPCS code as the volume weighted average of the average sales price (ASP) of the biosimilars within a shared code. This proposed reimbursement policy, which treats biosimilars as multiple source drugs, will have the effect of limiting patient and provider access based upon economic considerations, and without consideration of heterogeneity of treatment effect.

The National Minority Quality Forum (The Forum) is encouraged by the promise of biologics and biosimilars to address diseases for which there are currently no effective therapies. The CMS proposed rule for reimbursement of biosimilars betrays that promise.

Download Issue Brief Here