House Health Reform Includes Important Technical Change to ASP

The House Energy and Commerce Committee had a marathon mark-up session last night on the health care reform bill (as further described in the following article), but one of the key amendments adopted late last night would exclude customary prompt-pay discounts extended to distributors from a manufacturer's calculation of Average Sales Price (ASP) for Medicare Part B Drugs and Biologics. This widely supported technical change would help to ensure consistent and accurate ASP calculations and is consistent with how prompt pay terms are reported to Medicaid. As currently drafted, it would sunset after 5 years and exclude prompt pay terms up to 2 percent of wholesale acquisition cost (WAC). Prompt pay legislation was introduced in the House by Rep. Green (D-TX) and Rep. Whitfield (R-KY). Similar legislation has been introduced in the Senate by Sen. Specter (D-PA) and Sen. Roberts (R-KS).

Why does this matter? This is a key issue and flaw in the current ASP system used to reimburse all Medicare Part B products (including injections and infusions) in the physician office and hospital outpatient settings. This will clarify appropriate reporting which will make reimbursement consistent and accurate across products. This is a key issues for physicians and hospitals.