Lawmakers Air Concerns about CMS Billing Codes for Biosimilars

February 8, 2016

by Amanda Conschafter, blog editor

The Centers for Medicare and Medicaid Services’ billing code system for biosimilars earned it a “D-” grade at the House Energy and Commerce Health Subcommittee’s February 4 hearing on biologics. The hearing, “Examining Implementation of the Biologics Price Competition and Innovation Act,” invited testimony from FDA Director Janet Woodcock as well as Medicare Director Sean Cavanaugh. Though CMS’ letter-grade assessment came from Rep. Joe Barton (R-Texas), subcommittee members across party lines expressed concerns about lumping different biosimilars under a single billing, or “J,” code.

Finalized in November 2015, CMS’ rule dictates that billing codes for biosimilars differ from those of their biological reference products but not from fellow biosimilars of the same biologic. CMS’ approach defied input from several U.S. senators, who argued in a 2015 letter to Acting Administrator Andrew Slavitt that CMS should delay determining billing codes for biosimilars until the FDA “has completed regulations for these drugs” and the biosimilar market is “safe and stable.”

CMS’ 2016 Medicare Physician Fee Schedule essentially treats biosimilar coding as it does generic versions of conventional medications – ignoring subtle differences among biosimilar as well as the potential impact of those differences on patient safety. The decision exacerbates concerns from patients and advocates that the lack of distinct billing codes will complicate the process of tracing adverse events to their source.

Lawmakers questioned whether CMS’ rule aligns with the FDA’s policies on biosimilars. The subcommittee, in its background memo, noted that aspects of the rule “seemingly conflict with and potentially undermine FDA decisions on various matters.” The memo highlights specifically that “CMS would group all biosimilars that share the same reference product under the same [billing code] …regardless of whether FDA makes an interchangeability determination or if the biosimilar shares the same indications as the reference product.”

FDA Director Janet Woodcock, MD, contended that CMS’ billing policy does not conflict with existing FDA guidance. She focused her concerns instead on FDA’s inability to properly manage the biosimilars regulatory program at current funding levels. The program, she fears, will “explode” given the overwhelming workload and lack of resources.

FDA has yet to issue final guidance on several key issues related to biosimilars, including interchangeability and labeling. Dr. Woodcock explained that the FDA hopes to release those in 2016.

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