Medicare Part B
Reimbursement

Part B generally covers drugs given by a clinician in an office or clinic, such as injections and infusions that patients cannot reasonably give themselves. Drugs patients take at home usually fall under Part D. Each Medicare Administrative Contractor (MAC) also publishes a list of self-administered drugs it will not cover under Part B. That’s why a drug can have a valid HCPCS code and still be denied.

For most Part B drugs, Medicare pays based on a published payment limit for each HCPCS billing unit. The payment limit is multiplied by the number of units billed, subject to CMS unit limits called Medically Unlikely Edits (MUEs). Medicare generally pays 80% of the allowed amount, with the remaining 20% paid by the patient or a secondary payer.

ASP is the average sales price manufacturers report to CMS. WAC is the manufacturer’s list price before discounts. The Medicare payment limit is the amount CMS uses to calculate payment for a claim, based on the reported ASP. ASP and WAC are useful for comparing Medicare reimbursement to the drug’s acquisition cost, but the payment limit is what determines the Medicare payment.

WAC and AWP are updated weekly. ASP and Medicare payment limits are updated each quarter when CMS publishes new files in January, April, July, and October, and we apply CMS corrections as they are released. MUEs, the JW/JZ code list, and MAC exclusion lists are updated on their own publication schedules.