2006 proposed fee schedule - American Society of Clinical Oncology

248
data which, despite updates by the PPI, do not necessarily
reflect current market conditions. As discussed below, the
chances increase that Medicare payments will either overpay
or underpay for drugs, thus, resulting in payments that are
inconsistent with the goal of making accurate payments for
drugs. We also considered whether actual acquisition cost
data could be periodically updated. However, we do not
believe that it would be feasible to base Medicare payments
over the long term on continually acquiring data on actual
acquisition costs from ESRD facilities. This approach would
provide incentives for manufacturers and facilities to
increase acquisition costs without constraint. It also
would not necessarily provide data regarding current market
rates. Therefore, we believe it is appropriate for the
payment methodology for all ESRD drugs when separately
billed by freestanding ESRD facilities during CY 2006 to be
paid the amount determined under section 1847A of the Act.
This payment amount is the ASP +6 percent rate.
In reaching the conclusion about establishing payment
using the amount determined under section 1847A of the Act
rather than actual acquisition costs, we analyzed the ASP +6
percent payment rates for all separately billable ESRD
drugs, including the top 10, for both the first and second
quarters of CY 2005. (We note that the ASP payment rates
are updated quarterly. The new rates are made available