Medicare Part B Reimbursement of Prescription Drugs . Conclusion

06/01/2014

In response to widespread manipulation and overpayments associated with the previous AWP-based Medicare Part B drug payment system, the MMA tied reimbursement more closely to health care providers' acquisition costs by paying for a drug's market price. Under this acquisition process, Medicare has no price-setting power reimbursement rates lag rather than lead market prices. Empirical analysis of quarterly ASPs and reimbursement rates for covered drugs shows that market prices vary considerably over time and occasionally experience sharp spikes. In general, however, previous studies have found that most providers could still purchase most covered drugs at or below the reimbursement rate.

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