CMS Should Verify Part B Drug Pricing From Manufacturers, GAO Says
Executive Summary
CMS 'concurs' with GAO’s recommendation on ASP reports but it’s unclear how much more aggressively it will pursue underlying documentation.
The Centers for Medicare and Medicaid Services should periodically request verification of the average sales price (ASP) data reported to the agency by biopharmaceutical manufacturers for Medicare Part B drugs, the Government Accountability Office recommends in a recent report.
The agency could request source documentation from companies to corroborate the reported data either directly or in collaboration with the HHS Office of Inspector General, GAO's report says.
In response to the report, CMS told GAO it “concurs” with the recommendation. But it’s unclear how aggressively the agency will pursue underlying documentation for the ASP reports.
Manufacturers report ASP and sales volume data to CMS each quarter and CMS uses the reports as the basis for Medicare reimbursement rates going forward. By law, manufacturers that participate in the Medicaid drug rebate program are required to submit ASP data to CMS.
CMS Current Process For Validating Sales Price Data From Manufacturers
- Prior to submission of report, an authorized official from the manufacturer must attest to accuracy of information.
- Once reports come in, CMS performance series of electronic data checks to assess completeness of submission.
- If discrepancies are detected, CMS attempts to resolve issues directly with manufacturer and if it can’t, refers the case to the OIG.
The agency told GAO it believes the steps it already takes to validate manufacturer-reported data are adequate (see box). Agency officials also noted that since 2009, only one manufacturer has incurred civil monetary penalties as a result of OIG’s review of reporting discrepancies, GAO reports.
Sandoz Inc. agreed to $12.6m in civil monetary penalties to resolve allegations that it misrepresented ASP data to Medicare, according to a settlement announced by the OIG in March 2015. OIG charged that the company submitted inaccurate pricing data between January 2010 and March 2012.
Furthermore, although CMS is authorized by law to survey manufacturers that have Medicaid drug rebate agreements to verify ASP, agency officials told GAO that this authority does not allow them to conduct “blanket surveys to routinely collect information regarding manufacturers’ ASP data beyond what is on the ASP data collection form.”
The officials indicated “they may also request that OIG use its authority to audit ASP data submitted by manufacturers,” GAO points out. However, “CMS has limited such referrals to situations where the agency has identified potential consistent or repeated problems with calculating and reporting ASP data.”
Mandates, Automation Could Yield Better Data
CMS is developing an automated ASP submission system that it hopes will ensure the accuracy of ASP reporting. The system has been in the works for a number of years but its implementation has been delayed by budget restrictions (Also see "CMS Should Fully Automate ASP Data Submissions, OIG Says" - Pink Sheet, 25 Jul, 2014.). CMS officials said the agency is still testing the system and hopes it will begin operation at the end of 2016, GAO says.
GAO recommends that Congress consider requiring all manufacturers of Part B drugs, not only those with Medicaid rebate agreements, submit sales price data to CMS. GAO notes that the agency believes most manufacturers participate in the Medicaid rebate program and those that don’t voluntarily submit sales price data to CMS. However, a broader requirement would ensure the broadest level of participation, the report points out.
Congress could also “ensure that CMS has authority to request source documentation to periodically validate such data,” GAO adds.
GAO reviewed the steps CMS takes to ensure the accuracy of sales price data reported by manufacturers and developed recommendations on how the process could be enhanced at the request of House Ways and Means Committee ranking minority member Sander Levin, D-Mich., who has been vocal critic of high drug prices in Medicare.
“Additional information on Medicare Part B drug spending and utilization and the accuracy of the sales price data reported by drug manufacturers may inform congressional efforts to moderate program spending,” GAO told Levin.