Medicare Part B Biosimilar Biological Product Payment and Required Modifiers

https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Part-B-Drugs/McrPartBDrugAvgSalesPrice/Part-B-Biosimilar-Biological-Product-Payment.html

On the web page at the URL above (last updated February 2, 2018), the Centers for Medicare & Medicaid Services (CMS) clarifies its policies regarding Medicare Part B biosimilar biological product payment. The evolution of these policies is summarized below.

 

Dates of Service Prior to April 1, 2018

In the 2016 Physician Fee Schedule Final Rule, CMS updated the regulation text found at 42 CFR 414.904(j) to make clear that effective January 1, 2016, the payment amount for a biosimilar biological drug product would be based on the average sales price (ASP) of all NDCs assigned to the biosimilar biological products included within the same billing and payment code. This meant that CMS would group biosimilar products that rely on a common reference product’s biologics license application into the same payment calculation. It also meant that these products would share a common ASP payment limit and Healthcare Common Procedure Coding System (HCPCS) code. This payment structure treated biosimilars in a manner similar to multi-source agents for conventional generic drugs.

Medicare Part B claims for separately paid biosimilar products were required to include a modifier identifying the manufacturer of the specific product. Modifiers were intended to distinguish between biosimilar products that appear in the same HCPCS code but are made by different manufacturers.

While this policy was in effect, CMS issued the following HCPCS codes and assigned the following corresponding mandatory modifiers:

  • Q5101 Injection, filgrastim (G-CSF), biosimilar, 1 microgram (Zarxio); required modifier ZA – Novartis/Sandoz
  • Q5102 Injection, infliximab, biosimilar, 10 mg (Inflectra); required modifier ZB – Pfizer/Hospira
  • Q5102 Injection, infliximab, biosimilar, 10 mg (Renflexis); required modifier ZC – Merck/Samsung Bioepis

 

Dates of Service on or after April 1, 2018

The policy described above was met with widespread (although not universal) opposition. Comments submitted pursuant to the 2018 Physician Fee Schedule proposed rule persuaded CMS that there is a program need for assigning Part B biosimilar biological products into separate HCPCS codes.

Effective January 1, 2018, newly approved biosimilar biological products with a common reference product no longer are grouped into the same billing code. HCPCS code Q5102 has been replaced with two codes, Q5103 and Q5104. The new biosimilar payment policy also makes the use of modifiers that describe the manufacturer of a biosimilar product unnecessary. Thus, effective for claims with dates of service on or after April 1, 2018, modifiers used to describe the manufacturer of a biosimilar biological product are not required.