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April 6, 2023

Medicare Part B DME Drug Inflation Rebates

Starting April 1, 2023, beneficiary coinsurance for certain Part B drugs (including biological products) billed to the DME MACs with prices that increased at a rate faster than the rate of inflation will be adjusted so beneficiary coinsurance is based on the lower inflation-adjusted payment amount.

This new inflation rebate applies to certain Medicare Part B single source drugs and biological products, including biosimilar biological products. Refer to Reduced Coinsurance for Certain Part B Rebatable Drugs under the Medicare Prescription Drug Inflation Rebate ProgramExternal PDF for affected drugs and the reduced deductible amounts.

Starting April 1, 2023, the following rules are implemented when the Medicare Part B payment amount for a Part B rebatable drug for a calendar quarter is higher than the inflation-adjusted payment amount:

  • Patient coinsurance is based on 20% of the inflation-adjusted payment amount for the quarter and will be reflected as a percentage (that is less than 20%) of the Medicare Part B payment amount.
  • The Medicare portion of your payment will increase for the difference between the Medicare Part B payment amount and patient coinsurance, minus any Part B deductible and sequestration. For example,
    • If the Medicare Part B payment amount for the drug is $100 and the patient coinsurance is 18.525%, the patient would be charged $18.52.
    • Typically, the Medicare portion of payment to practitioners for Part B drugs and biologicals is limited to 80%.
    • When the patient coinsurance is adjusted, the percentage of the Medicare portion of payment to the supplier will be increased.
    • In this example, the percentage of the Medicare portion would be 81.475% or $81.48 of the Medicare Part B payment amount.
  • Suppliers must charge patients the correct amount of coinsurance, which may change quarterly.

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