What's New in Medicare Part B for Biosimilars

The current administration in Washington, DC, is one of the most active when it comes to policy and regulation that affects biosimilars, said a presenter at the 14th Biosimilars Summit, held January 22-23, 2019, in Alexandria, Virginia.

Molly Burich, MS, director of public policy for biosimilars and reimbursement for Boehringer Ingelheim Pharmaceuticals, Inc, recapped last year’s changes to reimbursement for biosimiliars by CMS in Part B, which is how the government pays for drugs administered by physicians. As with other presentations at the conference, not every rule or regulation is specific to biosimiliars, but almost everything has an impact, she said.

“CMS does drive a good bit of the decision-making,” said Burich. “Commercial payers often follow.”

Burich discussed the changes in the Healthcare Common Procedure Coding System (HCPCS). Last year, CMS began reimbursing biosimilars through Medicare Part B with its own codes (known as Q codes) as opposed to lumping them together with the same billing code (J) as reference biologics.

Q codes are historically considered temporary codes; it is up to CMS to decide when to move a biosimilar to the permanent J code, she said. While Q codes are considered temporary, Burich said the good thing is that most payers are using them.

This is an improvement from a few years ago, when CMS was assigning biosimilars “blended” codes, which Burich said most stakeholders did not want, given issues with pricing and tracking pharmacovigilance. By removing blended codes, biosimilars no longer need a separate modifier for billing purposes; that issue alone caused some complications in trying to educate physicians and coding staff about how to use them, she said.

With the separate coding system, Part B now pays for biosimilars under the Physician Fee Schedule based on the average sales price (ASP) plus 6% of its specific reference product. Previously, CMS treated biosimlar reimbursement similarly to how it treats small-molecule drugs and generics and did not differentiate between them.

“That really did create payment uncertainty and instability for physicians," she said.

Another change from last year, albeit one that is on hold due to a federal court decision in late December 2018, are 340B price cuts. If their sponsors apply for pass-through status, which lasts for 3 years, biosimilars are exempt from the cuts that HHS tried to make last year. HHS sought to reduce the price paid to ASP minus 22.5%, but the court ruled that HHS did not have the authority to make the decision.

Burich also discussed step therapy in Medicare Advantage plans as another opportunity for biosimilars, but acknowledged that, “Different stakeholders have different perspectives.” She noted that the CMS plan has certain guardrails in place, and that decisions to move from a reference product to a biosimilar should not be made unless it is clinically appropriate.