Reimbursement Issues

HDA supports exclusion of customary prompt pay discounts from the calculation of the Average Sales Price (ASP) for Medicare Part B.

The Medicare Prescription Drug Improvement and Modernization Act (MMA) of 2003 established ASP as the reimbursement metric for drugs reimbursed under Medicare Part B. Part B drugs or specialty pharmaceuticals — many of which are biologically derived — are used primarily to treat chronic or rare diseases; typically involve treatment regimens calling for ongoing clinical monitoring and patient education; and frequently require special handling, storage and delivery.

Currently, customary prompt pay discounts extended by manufacturers to distributors are included in the calculation of ASP.  Prompt pay discounts are based on negotiated terms between the manufacturer and the distributor for payment within a certain time frame and represent the time value of money. However, these discounts are typically not passed on to the physician purchasing the product. Excluding prompt pay discounts would align Medicare reimbursement with current Medicaid reimbursement methodology.

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