Is Your Hospital Drug Really ASP+?

Jacob Graham, Chance Scott, Sneha Peck, and Kathryne Kirk

Publication of the Centers for Medicare & Medicaid Services’ (CMS) 2020 Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center (ASC) Payment System final rule in November 2019 offers a finalized perspective on CMS’ hospital outpatient payment approach and its ASC payment system, effective Jan. 1, 2020. 

While not new, packaging payment in the prospective payment system may pose potential market access hurdles for manufacturers. Historically, many drugs used in the facility setting were paid for using a “buy and bill” method where the provider purchases, stocks, administers to the patient, and then bills for separate reimbursement to recoup drug cost at average sales price plus (ASP+) some add-on amount.

In an effort to encourage cost efficiencies in outpatient settings such as hospitals and ASCs, CMS has implemented several policies to capitate financial exposure and limit separate drug payment outside of transitional pass-through status.

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