Costs & IRMAA
Federal Watchdog Flags Nine Medicare Part B Drug Codes Where Payments May Exceed Market Prices
An OIG report found nine infused-drug billing codes in Q1 2026 where what Medicare pays appears to exceed what manufacturers charge large buyers, potentially triggering a payment substitution that would also reduce what beneficiaries owe in cost-sharing.
By the Goodsurance editorial teamAugust 26, 2026
Medicare Part B covers drugs that are infused or injected in a clinical setting, such as chemotherapy agents, biologic medicines for inflammatory diseases, and treatments for rare conditions. The program pays for these drugs at a rate tied to the average sales price, or ASP, the weighted average price at which manufacturers sell the product to doctors, hospitals, and distributors. Congress directed the Health and Human Services Office of Inspector General to compare those prices each quarter with average manufacturer prices, or AMP, the figure that reflects what manufacturers charge their largest commercial customers.
If an ASP exceeds its corresponding AMP by more than 5 percent for enough consecutive quarters, the Centers for Medicare and Medicaid Services is authorized to substitute a lower payment amount, the lesser of the widely available market price or 103 percent of the AMP. That substitution would also reduce the 20 percent coinsurance that Part B enrollees typically owe on infused and injected medicines.
OIG flagged nine Medicare Part B drug codes where payments may exceed market prices, a finding that could reduce what beneficiaries owe in cost-sharing.
In the first quarter of 2026, OIG found that nine drug codes met CMS's criteria for price substitution, meaning each had exceeded the 5 percent threshold for the required number of consecutive quarters. OIG forwards this finding to CMS, and the agency then decides whether to implement the lower rate.
The quarterly comparison is a congressionally mandated check designed to keep Medicare's Part B drug payments aligned with market reality. Beneficiaries who receive infused treatments in a clinic or a physician's office could see lower cost-sharing if CMS acts on the finding for any of the nine identified codes.
In plain words
Medicare pays for drugs you get as an IV drip or a shot in a doctor's office or clinic. Congress requires the government to check every few months whether Medicare is paying too much for these drugs compared to what drug companies charge their biggest customers. If Medicare is paying more than 5 percent extra, the government can lower the payment. A lower payment also means patients pay less, because they usually owe 20 percent of the cost. The government found nine drug billing codes early in 2026 where Medicare may be paying too much. Now it is up to Medicare to decide whether to lower what it pays for those drugs.
Understand the basics first
Source: OIG
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