Part B Biosimilar Biological Product Payment and Required Modifiers

Temporary Increase in Medicare Part B Payment for Certain Biosimilar Biological Products

Under section 11403 of the Inflation Reduction Act, Medicare payment for certain biosimilar biological products is required to be the average sales price (ASP) plus 8 percent (rather than 6 percent) of the ASP of the reference biological for a 5 year period defined in the statute. For existing qualifying biosimilar biological products for which payment was made using ASP as of September 30, 2022, the applicable 5-year period begins on October 1, 2022. For new qualifying biosimilar biological products for which payment is first made using ASP between October 1, 2022 through December 31, 2027, the applicable 5-year period begins the first day of the calendar quarter of such payment. A qualifying biosimilar biological product is defined as a biosimilar with an ASP that is not more than the ASP of the reference biological.

In accordance with these provisions, the ASP Drug Pricing File reflects the temporary increased amount for qualifying biosimilar biological products for a period of 5 years beginning with the October 2022 file.

Dates of Service on or after April 1, 2018

Medicare Part B policy changes for biosimilar biological products were discussed in the CY 2018 PFS final rule [See Related Links section below]. Effective January 1, 2018, newly approved biosimilar biological products with a common reference product will no longer be grouped into the same billing code. Instructions for new codes for biosimilars that are currently grouped into a common payment code and the use of modifiers have been issued [See Related Links section below].

Effective for claims with dates of service on or after April 1, 2018, HCPCS code Q5102 will be 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 will not be required.

Please note that HCPCS code Q5102 and the requirement to use biosimilar modifiers remain in effect for dates of service prior to April 1, 2018.

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 is based on the average sales price of all NDCs assigned to the biosimilar biological products included within the same billing and payment code. In general, this means that CMS will group biosimilar products that rely on a common reference product’s biologics license application into the same payment calculation, and these products will share a common payment limit and HCPCS code.

In order to provide CMS with the ability to track claims payment and to develop a better understanding of the use of specific biosimilar products in Medicare Part B, claims for separately paid biosimilar biological products will be required to include a modifier that identifies the manufacturer of the specific product. Modifiers will be used to distinguish between biosimilar products that appear in the same HCPCS code but are made by different manufacturers. CMS will issue HCPCS codes for biosimilar biological products and will issue and assign modifiers to specific biosimilar products in each HCPCS code. The assignments will be published on this webpage. The use of the modifiers on claims for biosimilar products that appear on this webpage is mandatory. However, if a HCPCS code and corresponding biosimilar modifier(s) do not appear on the quarterly update, then a modifier is not required to appear on claims for the code. New biosimilar products that are not adequately described by an existing unique HCPCS code may be billed under a miscellaneous code or “not otherwise ified” code such as J3590. Similarly, a “not otherwise ified” code may also be used in situations where an existing biosimilar HCPCS code is associated with a corresponding modifier that is not yet in effect in the claims processing system. The manufacturer modifier is not required on claims that use a miscellaneous HCPCS code.

Please note that the determination of the payment amount for biosimilars is not affected by the use of a modifier.

The table below lists the current biosimilar HCPCS Codes, the product(s) that are associated with each code and the corresponding required modifier that is used to identify the product. The table will be updated quarterly when new permanent HCPCS codes and modifiers are available for biosimilar products that appear on the ASP price file.

Note: The ZC modifier will become effective, that is, valid for claims submitted beginning October 1, 2017 and applies retroactively to dates of service on or after July 24, 2017.