Eligibility of Drugs, Biologicals, and Radiopharmaceutical Agents for Transitional Pass-Through Status Under the Hospital Outpatient Prospective Payment System (OPPS) in 42 CFR 419.64

Process and Information Required to Determine Drugs, Biologicals, and Radiopharmaceutical Agents, Eligible for
Transitional Pass-Through Provisions Under the Hospital Outpatient Prospective Payment System (OPPS)
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Process and Information Required to Determine Eligibility of Drugs, NonImplantable Biologicals, and Radiopharmaceutical Agents for Transitional
Pass-Through Status Under the Hospital Outpatient Prospective Payment
System (OPPS)
Please note:

Effective January 1, 2010, implantable biologicals that are surgically inserted or implanted
(through a surgical incision or natural orifice) will be evaluated for device pass-through
payment under the instructions using the device pass-through process. For the processes and
information required to apply for designation of New Technology services or new pass-through
device categories go to the main OPPS web page, currently at
http://www.cms.hhs.gov/HospitalOutpatientPPS/Downloads/catapp.pdf to see the latest
instructions. (NOTE: Due to the continuing development of the new cms.hhs.gov web site, this
link may change.)

This announcement describes in detail the process and information required for applications requesting transitional
pass-through payment for drugs, non-implantable biologicals, and radiopharmaceutical agents under the Medicare
hospital outpatient prospective payment system (OPPS). These instructions apply solely to requests submitted on or
after January 1, 2010 for transitional pass-through status for drugs, non-implantable biologicals, and
radiopharmaceuticals.
Because CMS intends to make information used in the ratesetting process under the OPPS available to the public
for analysis, applicants are advised that any information submitted, including commercial or financial data, is
subject to disclosure for this purpose.
We will accept transitional pass-through applications for drugs, non-implantable biologicals, and
radiopharmaceutical agents on an ongoing basis. However, we must receive applications sufficiently in advance of
the first calendar quarter in which transitional pass-through status is sought to allow time for analysis, decisionmaking, and computer programming. The table below indicates the earliest date that pass-through status could be
implemented once a completed application and all additional information are received.

CMS Must Have Complete
Application and All Necessary
Information by the first business date
in . . . .
March

Earliest Date To Be Considered For
Pass-Through Status Effective. . .

June

October 1

September

January 1

December

April 1

July 1

A longer evaluation period may be required if an application is incomplete or if further information is required upon
which to base a determination of pass-through eligibility.
An application is not considered complete until—
All required information has been submitted, AND
All questions related to such information have been answered.

Process and Information Required to Determine Drugs, Non-Implantable Biologicals, and Radiopharmaceutical
Agents, Eligible for Transitional Pass-Through Provisions Under the Hospital Outpatient Prospective Payment
System (OPPS)
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BACKGROUND:
Section 1833(t)(6) of the Act provides for temporary additional payments or ―transitional pass-through payments‖
for certain drugs and biological agents. As originally enacted by the BBRA, this provision required the Secretary to
make additional payments to hospitals for current orphan drugs, as designated under section 526 of the Federal
Food, Drug, and Cosmetic Act (Pub. L. 107-186); current drugs and biological agents and brachytherapy used for
the treatment of cancer; and current radiopharmaceutical drugs and biological products. For those drugs and
biological agents referred to as ―current,‖ the transitional pass-through payment began on the first date the hospital
OPPS was implemented (before enactment of BIPA (Pub. L. 106-554), on December 21, 2000).
Transitional pass-through payments are also provided for certain ―new‖ drugs, devices and biological agents that
were not being paid for as a hospital outpatient department service as of December 31, 1996, and whose cost is ―not
insignificant‖ in relation to the OPPS payment for the procedures or services associated with the new drug, device,
or biological. Under the statute, transitional pass-through payments can be made for at least 2 years but not more
than 3 years. Transitional pass-through payments for drugs and biologicals under the OPPS are discussed in the
final rule published in the April 7, 2000 Federal Register (65 FR 18478), and in subsequent OPPS rules and
issuances, which can be found at, http://www.cms.hhs.gov/HospitalOutpatientPPS/HORD/list.asp#TopOfPage,
http://www.cms.hhs.gov/MLNMattersArticles/, and http://www.cms.hhs.gov/Manuals/.
Section 1833(t)(6)(D)(i) of the Act sets the payment rate for pass-through eligible drugs and biologicals (assuming
that no pro rata reduction in pass-through payment is necessary) as the amount determined under section 1842(o) of
the Act. Section 303(c) of Pub. L. 108-173 amended Title XVIII of the Act by adding new section 1847A. This
new section establishes the use of the average sales price (ASP) methodology for payment for drugs and biologicals
described in section 1842(o)(1)(C) of the Act furnished on or after January 1, 2005. Payment for OPPS passthrough drugs and biologicals is set at the rate under the Competitive Acquisition Program (CAP) for Part B drugs
or, if the drug is not included in the CAP, at the rate established by the ASP methodology. For CY 2011, payment
rates will be established under ASP methodology. Under the hospital OPPS, radiopharmaceuticals are considered
drugs for pass-through purposes. For CY 2011, payment for diagnostic and therapeutic radiopharmaceuticals that
are granted pass-through status will be based on the ASP methodology.
The most current list of the drugs and biologicals that are separately paid under the OPPS, along with their payment
rates, can be found in the most recent quarterly update of Addendum B, located at
http://www.cms.hhs.gov/HospitalOutpatientPPS/AU/list.asp#TopOfPage. Information on Average Sales Price is
found at http://www.cms.hhs.gov/McrPartBDrugAvgSalesPrice/.

REQUIRED INFORMATION:
The information in items 1-12, below, is required in every application for pass-through payment for a drug,
biological or radiopharmaceutical. An application that does not include the following information is considered
incomplete and cannot be acted upon:
1.

The trade name and generic name of the product.

2.

A detailed description of the clinical application of the product:
a. What it is and what it does.
b. The form in which it is supplied (i.e., solution, tablet, etc.).
c. Method of administration (intramuscularly, intravenously, orally, subcutaneously, sublingually,
etc.).
d. Manner of packaging (indicate dosages/concentrations per ml, per tablet, per mCi, etc.).
e. The usual minimum dosage per administration for one patient.
f. The usual maximum dosage per administration for one patient.

Process and Information Required to Determine Drugs, Non-Implantable Biologicals, and Radiopharmaceutical
Agents, Eligible for Transitional Pass-Through Provisions Under the Hospital Outpatient Prospective Payment
System (OPPS)
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g.

h.

The typical dosage per administration for a Medicare patient in the hospital outpatient department
per one day. Specifically, based on a 70kg Medicare patient, what would be the typical dosage for
this drug in the hospital outpatient setting for one day?
How dosages are measured.

3.

A copy of the most recently published average wholesale price (AWP) and/or wholesale acquisition cost
(WAC), including the date of publication and compendium where published (examples include Red Book®
and Medi-Span®). NOTE: Applicants may be responsible for updating their compendia submission
prospectively.

4.

Average Sales Price (ASP) or Wholesale Acquisition Cost (WAC) for specified units of the drug.

5.

The current cost of the drug or biological to hospitals, that is, the actual cost paid by hospitals net of all
discounts, rebates, and incentives in cash or in kind. In other words, submit the best and latest information
available that provides evidence of the actual cost to hospitals for a specific drug or biological specified in
terms of dosage and concentration.

6.

The actual market date or date of sale of first unit. NOTE: If a drug is pending imminent FDA approval,
indicate estimated FDA approval date and anticipated date of sale of first unit.

7.

List the Healthcare Common Procedure Coding System (HCPCS) code(s) associated with the product.
a. CPT or Level II alphanumeric HCPCS code that reflects the procedure code(s) associated with the
product’s use (e.g.,CPT codes for drug administration, etc.).
b. Level II alphanumeric HCPCS code that specifically identifies the product/item (if available).
Specifically, list the C-code, J-code, Q-code, or any other Level II alphanumeric HCPCS code that
appropriately describes the item,
(NOTE: APPROVAL OF A DRUG OR BIOLOGICAL FOR A TRANSITIONAL PASSTHROUGH PAYMENT UNDER THE OPPS IS NOT CONTINGENT ON PRIOR
ASSIGNMENT OF A NATIONAL HEALTHCARE COMMON PROCEDURE CODING
SYSTEM CODE.). If no HCPCS code is currently available, please specify the requested
code descriptor, including dosage units.

8.

Usage: Projected (units) volume by site of service that reflects one full year of utilization based on the
drug’s package size. Indicate the projected timeframe for the utilization (e.g., Jan 1 – Dec 31, 2008, Apr 1
– Mar 30, 2008, etc.). If a drug is packaged in multiple sizes, list projections for every single package size.
List projected volume separately by the following categories:
a. Medicare Inpatient Hospital
b. Medicare Outpatient Hospital
c. Medicare Physician’s Office
d. Medicare Ambulatory Surgical Center
e. Other sites of services (e.g., Medicaid, Veterans Administration, etc.).

9.

A copy of the Food and Drug Administration (FDA) approval/clearance letter (including FDA summary
sheets) for the product. NOTE: If a drug is pending imminent FDA approval, indicate estimated FDA
approval date.

10. A copy of the package insert.
11. For non-implantable biological application(s), a copy of the United States Pharmacopeia (USP) Monograph
for the product is required if it has not received FDA approval as a biological.
12. Applicant name(s), company name, address(es), e-mail addresses and telephone number(s) of the party or
parties making the request and responsible for the information contained in the application. If different

Process and Information Required to Determine Drugs, Non-Implantable Biologicals, and Radiopharmaceutical
Agents, Eligible for Transitional Pass-Through Provisions Under the Hospital Outpatient Prospective Payment
System (OPPS)
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from the requester, give the applicant name, company name, address, e-mail address, and telephone number
of the person that CMS should contact for any additional information that may be needed to evaluate the
application.
13. Other information as CMS may require to evaluate a specific request or that the applicant believes CMS
may need to evaluate the application.
IN ADDITION, answer 13A. or 13B., whichever is applicable.
13A. For drugs and non-implantable biologicals OTHER THAN contrast agents or radiopharmaceutical
products, specify how dosages are measured, i.e., in milligrams, micrograms, etc.
13B. For diagnostic and therapeutic radiopharmaceutical drugs and for contrast agents, specify the following
information:
a. Indicate whether the product is available in milligrams (mg), millicuries (mCi), or microcuries
(uCi), including concentration before and after reconstitution.
b. If the AWP is stated ―per vial‖ or "per ampule," indicate how many doses can be administered
from one vial or one ampule.
c. If the AWP is stated ―per dose,‖ "per vial," or "per ampule," but the item is administered in
milligrams (mg), millicuries (mCi), or microcuries (uCi), indicate how many mg, mCi, or uCi are
in one dose, one vial and/or one ampule.

NOTE: A separate application is required for each distinct drug, non-implantable biological or radiopharmaceutical
agent included in a request. For example, if an applicant requests transitional pass-through status for five new drugs,
the required information listed above must be completed for each of the five drugs.
WHERE TO SEND APPLICATIONS
Because of staffing and resource limitations, we cannot accept applications by facsimile (FAX) transmission or by email. Mail six (6) copies of each completed application to the following address:
OPPS Pass-Through Applications
Division of Outpatient Care
Mailstop C4-05-17
Centers for Medicare and Medicaid Services
7500 Security Boulevard
Baltimore, MD 21244-1850

Questions pertaining to the pass-through payment application process for drugs, non-implantable biologicals or
radiopharmaceutical agents may be sent via e-mail to the Division of Outpatient Care mailbox,
[email protected], or by phone to 410-786-0378.

According to the Paperwork Reduction Act of 1995, no persons are required to respond to a collection of information unless it displays a
valid OMB control number. The valid OMB control number for this information collection is 0938-0802. The time required to complete
this information collection is estimated to average 16 hours per response, including the time to review instructions, search existing data
resources, and gather the data needed, and complete and review the information collection. If you have comments concerning the accuracy
of the time estimate(s) or suggestions for improving this form, please write to: CMS, 7500 Security Boulevard, Attn: PRA Reports Clearance
Officer, Mail Stop C4-26-05, Baltimore, Maryland 21244-1850.

Last modified 12/3/2010