Transitional Pass through payments related to Drugs, Biologicals, and Radiopharmaceuticals to determine eligibility under the Outpatient Prospective Payment System

Process and Information Required to Determine Eligibility of Drugs, Biologicals, and
Radiopharmaceuticals for Transitional Pass-Through Status under the Hospital
Outpatient Prospective Payment System (OPPS)
This announcement describes in detail the process and information required for applications requesting transitional
pass-through payment for drugs, biologicals, and radiopharmaceuticals under the Medicare hospital outpatient
prospective payment system (OPPS).
We will accept transitional pass-through applications for drugs, biologicals, and radiopharmaceuticals on an ongoing
basis. 1 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, decision making, 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 a complete application and
all necessary information by the first
business date in:
March

Earliest possible date for
pass-through status to be effective:
July 1

June

October 1

September

January 1

December

April 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.
BACKGROUND:
Section 1833(t)(6) of the Social Security Act provides for temporary additional payments or “transitional passthrough payments” for certain drugs and biological agents. As originally enacted by the Balanced Budget Refinement
Act of 1999 (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 sources used for the treatment of cancer; and current
radiopharmaceutical drugs and biological products. Transitional pass-through payments are also provided for certain
“new” drugs, devices and biological agents that were not 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.gov/Medicare/Medicare-Fee-forService-Payment/HospitalOutpatientPPS/Hospital-Outpatient-Regulations-and-Notices.html;
http://www.cms.gov/Outreach-and-Education/Medicare-Learning-NetworkMLN/MLNMattersArticles/index.html?redirect=/MLNMattersArticles/; and http://www.cms.gov/Regulations-andGuidance/Guidance/Manuals/index.html?redirect=/Manuals/.

1

CMS intends to make information used in the ratesetting process under the OPPS available to the public for analysis therefore applicants are
advised that any information submitted, including commercial or financial data, is subject to disclosure for this purpose.

The following products are not eligible to apply for transitional pass-through payments through this drug, biological
and radiopharmaceutical pass-through application process and instead must apply through the device transitional passthrough application process:
1. Implantable biologicals (regardless of Food and Drug Administration [FDA] approval or clearance type)
2. Skin substitutes and similar products that aid wound healing (regardless of FDA approval or clearance type)
3. Any product approved or cleared by the FDA as a medical device except for viscosupplements for
osteoarthritis.
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
will not be acted upon:
1. The trade name and generic name of the product.
2. A detailed description of the product including the following:
a. Composition and clinical indication(s).
b. The form in which it is supplied (e.g., solution, tablet, etc.).
c. Method of administration (e.g., intramuscularly, intravenously, orally, subcutaneously, sublingually,
etc.).
d. Manner of packaging (e.g., volume, dosages, concentrations per ml, per tablet, per mCi, etc.).
Note – Packaging, that is, the quantity of the drug, biological or radiopharmaceutical that is represented
by an NDC or similar product identifier, must be able to be verified through a publically available source,
e.g., the DailyMed web site.
e. The usual minimum dosage per administration for one patient.
f. The usual maximum dosage per administration for one patient.
g. 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?
h. How dosages are measured.
i.
For drugs and biologicals other than contrast agents or radiopharmaceuticals, specify
how dosages are measured, e.g., in milligrams, micrograms, etc.
ii.
For diagnostic and therapeutic radiopharmaceuticals 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 Average Wholesale Price (AWP) (or other price) is stated “per vial” or "per
ampule," indicate how many doses can be administered from one vial or one
ampule.
C. If the AWP (or other price) 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.
3. A copy of the most recently published AWP and Wholesale Acquisition Cost (WAC), including the date
of publication and compendium where published (please include either RED BOOK™ or Medi-Span
Price Rx among the compendium in which the price is published). Note – the price submitted by the
application deadline (which is subject to verification by CMS) will be used for initial determination of
pass-through payment. No price updates after the application deadline will be accepted. If the
applicant has not determined the price by the application deadline or if the applicant wants to update
the price after the application deadline, then the applicant must withdraw the application and reapply
for pass-through in a subsequent quarter.
4. Average Sales Price (ASP) for specified units of the drug.
5. The current cost of the drug, biological or radiopharmaceutical 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 product
specified in terms of dosage and concentration.

6. The date of commercial market availability or 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 HCPCS code that reflects the drug administration procedure code(s) or other
procedure code associated with the product.
b. Level II HCPCS code that currently identifies the product/item, including an unlisted HCPCS
code (e.g., A, C, J, or Q code). Note: Approval of a drug, biological or radiopharmaceutical for
a transitional pass-through payment under the hospital OPPS is not contingent on prior
assignment of a national HCPCS 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 specific projected timeframe for the utilization (e.g., Jan 1–Dec 31, 2015, or April
1, 2015–March 30, 2016, etc.). If a drug is packaged in multiple sizes, list projections for every single
package size. List projected units separately by the following categories for every single package size:
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., Federally Qualified Health Centers, Rural Health Clinics, Veterans
Administration Hospitals, etc.).
9.

A copy of the FDA New Drug Application or Biologics License Application approval letter. Only for
viscosupplements for osteoarthritis may a Premarket Approval (PMA) letter be submitted.

10. A copy of the FDA label (package insert).
11. Applicant name(s), company name, address(es), e-mail address(es) and telephone number(s) of the party or
parties making the request and responsible for the information contained in the application. If different
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.
12. Other information as CMS may require or that the applicant believes CMS may need to evaluate the
application.
Note: A separate application is required for each distinct drug, biological or radiopharmaceutical 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 AND ASK QUESTIONS:
Send three hard copies and one electronic copy of each completed application with all supporting information to the following address and e-mail 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
[email protected]
Questions pertaining to the pass-through payment application process for drugs, biologicals or radiopharmaceuticals may be sent via e-mail to
[email protected] or by phone to 410-786-7267.
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: January 2015.