Noncovered Drug Versions Are Inflating What Medicare Pays for Certain Infused Medicines, Federal Watchdog Reports

Medicare Part B covers drugs given by infusion or injection in a clinical setting, not drugs taken at home. Many prescription medicines come in both an injectable version covered by Part B and a pill or self-injected form that Medicare does not cover. When manufacturers group both versions under the same billing code, the average price Medicare uses to set payments can be pulled upward by the noncovered form.

The Health and Human Services Office of Inspector General reviewed five consecutive quarters of Part B drug data, from January 2025 through March 2026, to examine how often CMS included average sales prices for noncovered self-administered versions when calculating payment amounts. The agency found six drug billing codes that contained noncovered versions. For four of those six, CMS calculated payment using prices that blended covered and noncovered forms, resulting in inflated payment rates.

OIG used Tremfya, a biologic infused in a clinical setting for plaque psoriasis, as a concrete example. In the fourth quarter of 2025, Medicare and its enrollees paid approximately 15,200 dollars for an induction dose of the infused medicine. Had the noncovered self-administered version been excluded from the billing code, the same dose would have cost approximately 14,200 dollars, about 1,000 dollars less per dose. Because Part B beneficiaries typically owe 20 percent coinsurance on infused drugs, the inflated price translates to roughly 200 dollars of excess out-of-pocket cost per dose.

OIG conducts this review under a congressional mandate and recommends that CMS take corrective action to exclude noncovered drug versions when setting payment rates.