Georgia Medicare Part B Drug Payment Guide (2026)

For every Georgia Medicare beneficiary receiving chemotherapy at Northside Cancer Institute, every patient receiving infliximab infusions at Piedmont Hospital for inflammatory bowel disease, every kidney transplant recipient at Emory University Hospital taking tacrolimus to prevent organ rejection, and every senior receiving the annual influenza vaccine at their primary care office, the underlying payment framework is the Medicare Part B drug payment system established by Section 303 of the Medicare Modernization Act of 2003. The framework determines how much Medicare pays the provider, how much the beneficiary owes in coinsurance, and ultimately whether the drug is financially accessible.

This guide explains the federal authorities (Section 303 of the MMA, Section 1847A of the Social Security Act, the Inflation Reduction Act of 2022, the 340B Drug Pricing Program, the Outpatient Prospective Payment System drug provisions), the Average Sales Price plus 6 percent payment methodology, the distinction between Part B and Part D drug coverage, the buy-and-bill model that dominates Part B drug administration, the inflation rebate and drug price negotiation provisions added by the 2022 Inflation Reduction Act, the Georgia delivery infrastructure (major cancer centers, 340B hospitals, specialty pharmacies), the role of Palmetto GBA as Georgia's Part B Medicare Administrative Contractor, and the practical steps Georgia Medicare beneficiaries should take to access physician-administered drugs and manage out-of-pocket costs.

By Brevy Care Team · Last verified May 21, 2026

Section 303 of the Medicare Modernization Act 2003

The current Part B drug payment framework was established by Section 303 of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003, commonly known as the Medicare Modernization Act or MMA. While the MMA is primarily known for creating Medicare Part D (the outpatient prescription drug benefit), Section 303 of the MMA fundamentally restructured how Medicare pays for physician-administered drugs under Part B.

Section 303 of the MMA established the Average Sales Price (ASP) plus 6 percent methodology as the payment basis for most Part B drugs and replaced the prior Average Wholesale Price (AWP) plus 15 percent methodology that had been in place under Section 1842(o) of the Social Security Act. The replacement was driven by extensive evidence that the AWP-based methodology had produced systematic overpayments. The Department of Health and Human Services Office of Inspector General (OIG), the Government Accountability Office (GAO), and the Medicare Payment Advisory Commission (MedPAC) all documented substantial AWP-to-acquisition-cost spreads, and several drug manufacturers entered settlements with the Department of Justice over allegedly inflated AWP reporting.

Section 1847A of the Social Security Act

Section 303 of the MMA added a new Section 1847A to the Social Security Act establishing the statutory framework for ASP-based Part B drug payment. Section 1847A(b)(1)(C) specifies that for most physician-administered drugs, the Medicare payment limit is 106 percent of the volume-weighted Average Sales Price (i.e., ASP plus 6 percent). This statutory authority remains the current basis for Part B drug payment, subject to the modifications enacted by the Inflation Reduction Act of 2022 (described later in this guide) and to the sequestration reduction applied to all Medicare payments.

The implementing regulations for Section 1847A are codified at 42 CFR Part 414 Subpart K (Determination of Allowance for Drugs Furnished by Physicians or Hospital Outpatient Departments). CMS publishes ASP-based payment rates quarterly through the ASP Drug Pricing Files, which Palmetto GBA applies to claims processing.

The ASP Calculation Methodology

The Average Sales Price is calculated for each Healthcare Common Procedure Coding System (HCPCS) code based on manufacturer sales data. Under Section 1927(b)(3)(A) of the Social Security Act and Section 1847A(c) of the Social Security Act, manufacturers report quarterly to CMS the total dollar value and total unit volume of sales to most U.S. purchasers (including wholesalers, group purchasing organizations, hospitals, physicians, and clinics, but excluding certain federal purchasers like the Department of Defense and the Department of Veterans Affairs whose negotiated prices receive different regulatory treatment).

The ASP for each HCPCS code is calculated as the total sales revenue divided by total unit volume across the reported categories. CMS then aggregates manufacturer-specific ASPs into a volume-weighted ASP for each multi-source HCPCS code (i.e., codes that include multiple manufacturers' products). For single-source drugs (only one manufacturer), the manufacturer ASP is the basis. The Medicare payment limit is then calculated as 106 percent of the resulting ASP, subject to applicable rounding and special rules.

Wholesale Acquisition Cost (WAC) Fallback

When ASP data is unavailable (typically for newly approved drugs in the first quarters after market entry, before quarterly ASP reporting cycles complete), Section 1847A(c)(4) of the Social Security Act provides that payment is based on Wholesale Acquisition Cost (WAC). The Medicare payment limit during the WAC period is a set percentage of WAC as specified by current statute and CMS guidance; consult the current CMS ASP Drug Pricing File documentation for the operative percentage. The WAC-based methodology applies until quarterly ASP data becomes available, typically two quarters after market entry.

WAC is defined as the manufacturer's list price to wholesalers, exclusive of typical wholesale or other discounts. Because WAC does not reflect actual transaction prices (which include various discounts), WAC-based payment is generally higher than ASP-based payment would be.

Sequestration: The Across-the-Board Reduction

All Medicare payments, including Part B drug payments, are subject to the across-the-board sequestration reduction established by Section 251A of the Budget Control Act of 2011 (Public Law 112-25). Sequestration was paused briefly during the COVID-19 public health emergency under the CARES Act and subsequent legislation, but the reduction resumed and remains in effect.

The net effect on Part B drug payment is that the ASP+6 percent statutory rate is reduced by the sequestration percentage. The sequestration applies to the Medicare program payment, not to beneficiary coinsurance. The 20 percent beneficiary coinsurance is calculated on the pre-sequestration ASP+6 percent allowed amount.

IRA Changes to Section 303 MMA Part B Drug Payment

The Inflation Reduction Act of 2022 (IRA), signed into law as Public Law 117-169, made the most significant changes to Medicare drug pricing since the 2003 MMA. Three IRA provisions are particularly important for Part B drug payment: Section 11001 (Medicare Drug Price Negotiation Program), Section 11003 (Part B Drug Inflation Rebates), and Section 11401 (Vaccine Coverage Without Cost-Sharing).

Section 11001: Medicare Drug Price Negotiation Program

Section 11001 of the IRA established the Medicare Drug Price Negotiation Program, codified at new Sections 1191 through 1198 of the Social Security Act. The program authorizes the Secretary of Health and Human Services to negotiate maximum fair prices (MFP) with manufacturers of selected high-cost drugs.

Key features of the negotiation program include:

Drug selection criteria: Drugs are selected based on highest Medicare spending. For Part D drugs, eligibility includes single-source brand-name drugs and biologics. For Part B drugs (beginning with later selection rounds), eligibility extends to physician-administered drugs that meet the highest spending criteria.

Phased implementation: The first cohort of drugs, all from the Part D side, has been selected and announced by HHS. Subsequent annual selection rounds expand the program to additional drugs, with Part B drugs becoming eligible for selection in later years. Consult the current CMS Drug Price Negotiation Program page for the active selection list and the schedule of negotiated-price effective dates.

Negotiation methodology: The negotiation process incorporates several factors specified by Section 1194 of the Social Security Act, including the manufacturer's research and development costs, federal financial support, prior federal financial support for the drug's development, current unit costs of production and distribution, prior FDA approvals, patent and exclusivity status, market data, and comparable therapeutic alternatives.

Maximum Fair Price (MFP): The negotiated price is called the Maximum Fair Price. The MFP is generally substantially lower than the prior list price.

Manufacturer participation: Manufacturers may decline to negotiate, but face significant excise tax consequences under Section 5000D of the Internal Revenue Code if they refuse to participate while continuing to sell to Medicare beneficiaries. As a practical matter, manufacturers of selected drugs have entered the negotiation process.

Litigation: Multiple manufacturers and trade associations filed lawsuits challenging the constitutionality of the negotiation program. Federal courts have largely upheld the program, with several cases pending appeal. The negotiation program is proceeding on schedule.

Section 11003: Part B Drug Inflation Rebates

Section 11003 of the IRA established Part B drug inflation rebates, requiring manufacturers to pay rebates to Medicare when Part B drug prices rise faster than the Consumer Price Index for All Urban Consumers (CPI-U). The provision is codified at Section 1847A(i) of the Social Security Act.

The inflation rebate calculation compares the current ASP to a benchmark ASP indexed by CPI-U from a baseline quarter specified by the statute (generally the third quarter of 2021 or the third quarter following market entry for newer drugs). If the current ASP exceeds the inflation-adjusted benchmark, the manufacturer owes a rebate equal to the per-unit excess multiplied by Medicare units sold.

A parallel inflation rebate applies to Part D drugs under Section 11002 of the IRA. The Part B and Part D inflation rebate provisions together create strong incentives for manufacturers to limit price increases to inflation rates. Beneficiaries also benefit directly from the Part B inflation rebate through reduced coinsurance for inflation-rebated drugs (the 20 percent coinsurance is calculated on the inflation-adjusted payment amount rather than on the higher actual ASP).

Section 11401: Vaccine Coverage Without Cost-Sharing

Section 11401 of the IRA established cost-sharing protection for vaccines covered under Medicare Part D, eliminating deductibles and copayments for adult vaccines recommended by the Advisory Committee on Immunization Practices (ACIP).

Most Part B vaccines (influenza, pneumococcal, hepatitis B for high-risk beneficiaries, and COVID-19) were already covered without beneficiary cost-sharing under existing Part B preventive services provisions. The IRA's vaccine cost-sharing protection primarily benefited Part D vaccines (notably shingles vaccine, Tdap, and others not covered under Part B's narrow vaccine list).

Part B Drug Categories: What Is Covered Under Part B vs Part D

The distinction between Part B drug coverage and Part D drug coverage is one of the most important and frequently misunderstood aspects of Medicare prescription drug coverage. The general principle is that Part B covers drugs that are not usually self-administered (i.e., drugs administered by a healthcare professional incident to a physician's service), while Part D covers drugs that are self-administered (i.e., drugs the beneficiary takes themselves, typically oral medications, most pills, and most self-injectables).

Part B Drug Categories

Medicare Part B covers physician-administered drugs in the following categories:

Chemotherapy and Cancer Drugs: Most infused and injected chemotherapy drugs are covered under Part B when administered in physician offices or hospital outpatient departments. Examples include trastuzumab (Herceptin), bevacizumab (Avastin), rituximab (Rituxan), pembrolizumab (Keytruda), nivolumab (Opdivo), pemetrexed (Alimta), oxaliplatin, paclitaxel, docetaxel, and many other infusion chemotherapy agents.

Oral Cancer Drugs Section 1861(s)(2)(Q): Section 1861(s)(2)(Q) of the Social Security Act provides specific Part B coverage for oral anti-cancer drugs that have the same active ingredient as a Part B covered intravenous chemotherapy drug. Examples include capecitabine (Xeloda), oral methotrexate, oral cyclophosphamide, and certain other oral chemotherapy agents that have intravenous equivalents.

Oral Antiemetic Drugs Section 1861(s)(2)(T): Section 1861(s)(2)(T) provides Part B coverage for oral antiemetic drugs used as part of an anti-cancer chemotherapy regimen. Coverage is time-limited following chemotherapy administration; consult the current Medicare Benefit Policy Manual for the active window. Examples include ondansetron, granisetron, and aprepitant when used immediately following Part B chemotherapy.

Infused Biologics for Autoimmune Disease: Part B covers physician-administered biologic drugs for autoimmune and inflammatory conditions. Examples include infliximab (Remicade), tocilizumab (Actemra), abatacept (Orencia), vedolizumab (Entyvio), and certain interleukin inhibitors when administered as physician office or hospital outpatient infusions.

Vaccines: Part B covers specific vaccines: influenza (annual), pneumococcal (PCV20, PCV15, PPSV23), hepatitis B (for high-risk beneficiaries), and COVID-19 (including boosters). These vaccines are covered without beneficiary cost-sharing under existing preventive services provisions.

Immunosuppressants: Part B covers immunosuppressant drugs administered to Medicare beneficiaries who received an organ transplant in a Medicare-certified facility, where Medicare paid for the transplant. Coverage is generally time-limited post-transplant under longstanding rules, with the Inflation Reduction Act extending coverage for kidney transplant recipients beyond the standard window under specific circumstances; consult the current Medicare immunosuppressant coverage page. Common immunosuppressants include tacrolimus (Prograf), cyclosporine, mycophenolate (CellCept), sirolimus, and others.

Erythropoiesis Stimulating Agents (ESAs): Part B covers ESAs administered for treatment of anemia related to chronic kidney disease, cancer chemotherapy, or other Medicare-covered conditions. Examples include epoetin alfa (Epogen, Procrit) and darbepoetin alfa (Aranesp). ESAs administered to dialysis patients are typically covered through the End-Stage Renal Disease (ESRD) Prospective Payment System rather than separately under Part B drug payment.

Bone Resorption Inhibitors: Part B covers bone-strengthening drugs administered by infusion or injection, including zoledronic acid (Reclast, Zometa), pamidronate, and denosumab (Prolia, Xgeva).

Iron Therapy: Part B covers infused iron preparations including iron sucrose (Venofer), iron dextran (INFeD), ferumoxytol (Feraheme), and others.

Hemophilia Factor Products: Part B covers blood clotting factor concentrates for hemophilia patients, including Factor VIII, Factor IX, and von Willebrand factor products.

Inhalation Drugs for DME Nebulizers: Part B covers certain inhalation drugs delivered through durable medical equipment nebulizers. Examples include albuterol, ipratropium, budesonide nebulization solution, and combination products.

Other Categories: Part B also covers certain other drugs, including specific intravenous antibiotics for home infusion (under the Home Infusion Therapy benefit established by the 21st Century Cures Act), parenteral nutrition (under DME coverage), and miscellaneous drugs that meet the Part B coverage criteria.

Part D Drug Categories (Generally)

Medicare Part D covers self-administered prescription drugs, including most oral medications, most pills, most self-injectable products (insulin pens, self-administered biologics), and most outpatient prescription drugs that beneficiaries take themselves. The distinction is based on whether the drug is usually self-administered rather than physician-administered.

Self-administered drugs that may be administered in a physician's office (for example, if a patient receives their first dose of a self-injectable in the office for training purposes) are generally not covered under Part B because they are usually self-administered. Such drugs would be covered under Part D if the beneficiary has Part D enrollment.

The Practical Implication

For a Georgia Medicare beneficiary:

• Chemotherapy infusion at Northside Cancer Institute is Part B coverage with ASP+6% payment to the cancer center and 20 percent beneficiary coinsurance.
• The same beneficiary's oral pain medication (e.g., hydromorphone, oxycodone) is Part D coverage with plan-specific copayment.
• The annual flu vaccine at Walgreens or the primary care office is Part B coverage with no beneficiary cost-sharing.
• The shingles vaccine (Shingrix) is Part D coverage, now without cost-sharing under IRA Section 11401.
• Tacrolimus after kidney transplant is Part B coverage if transplant was Medicare-covered, with 20 percent beneficiary coinsurance.

Hospital Outpatient Part B Drug Payment Under OPPS

When Part B drugs are administered in a hospital outpatient department (HOPD), payment is made through the Outpatient Prospective Payment System (OPPS) under Section 1833(t) of the Social Security Act. The OPPS framework is the same framework that pays for all hospital outpatient services (procedures, observation, emergency department visits, etc.), with specific provisions for drugs.

Separately Payable Drugs vs Packaged Drugs

Under OPPS, drugs are classified as either separately payable or packaged:

Separately Payable Drugs: Drugs with a per-day cost exceeding the applicable OPPS packaging threshold (updated annually by CMS) are paid separately at ASP+6 percent. These are the high-cost drugs (most chemotherapy, biologics, infused immunosuppressants) that account for the majority of hospital outpatient drug spending.

Packaged Drugs: Drugs with per-day costs below the threshold are packaged into the OPPS payment for the associated procedure (e.g., the infusion administration code). The hospital is not paid separately for these drugs; the packaged payment is intended to cover the bundled cost.

Section 1833(t)(14) OPPS Drug Pass-Through Payment

Section 1833(t)(14) of the Social Security Act provides for transitional pass-through payment for new drugs and biologics under OPPS. New separately payable drugs receive pass-through status for a limited transition period after market entry, during which the drug is paid at ASP+6 percent and the payment is passed through the OPPS system rather than being absorbed into payment rates for the underlying procedure. The pass-through provision is intended to encourage adoption of new therapies and to provide payment stability during the transition from initial market entry to integrated OPPS payment.

Section 1833(t)(16) OPPS Drug Payment Refinements

Section 1833(t)(16) of the Social Security Act provides specific OPPS drug payment refinements, including provisions for separately payable drug payment methodology, the OPPS packaging threshold, and special rules for certain drug categories.

Beneficiary Cost-Sharing in OPPS Drug Payment

The OPPS beneficiary coinsurance for separately payable drugs is generally 20 percent of the OPPS allowed amount, subject to certain caps and adjustments. For packaged drugs, the coinsurance is part of the overall procedure coinsurance.

The 340B Drug Pricing Program

The 340B Drug Pricing Program, established by Section 340B of the Public Health Service Act (added by the Veterans Health Care Act of 1992), requires drug manufacturers to provide deeply discounted drug prices to specific safety net healthcare providers (called covered entities). The program is administered by the Health Resources and Services Administration (HRSA), not by CMS.

340B Covered Entities

Eligible covered entities include:

• Disproportionate share hospitals (DSH) meeting the specific statutory eligibility criteria.
• Children's hospitals.
• Cancer hospitals.
• Critical Access Hospitals.
• Rural Referral Centers.
• Sole Community Hospitals.
• Federally Qualified Health Centers (FQHCs).
• Ryan White HIV/AIDS Program grantees.
• Specific other safety net providers.

340B Drug Discounts

Manufacturers provide drugs to 340B covered entities at the 340B ceiling price, which is calculated based on the Medicaid drug rebate formula and is generally substantially below the wholesale acquisition cost. The discount can be meaningful and varies by drug; consult the HRSA 340B page for the current ceiling-price methodology.

Hospital Outpatient Department 340B Payment Policy

For 340B-acquired drugs administered in hospital outpatient departments, CMS previously adopted a reduced payment policy below the standard ASP+6 percent. The policy was successfully challenged by the American Hospital Association, and the Supreme Court in American Hospital Association v. Becerra held that the policy violated the Social Security Act because CMS had not properly conducted the survey required to support differential rates.

Following the Supreme Court decision, CMS reverted to ASP+6 percent payment for 340B drugs in hospital outpatient departments and addressed retroactive remedies through subsequent rulemaking. Current policy provides for ASP+6 percent payment to 340B hospitals for separately payable drugs in the outpatient setting.

340B Eligibility for Georgia Hospitals

Major Georgia 340B-participating hospitals include Grady Memorial Hospital (Atlanta), other major safety net hospitals, several children's hospitals, and various Federally Qualified Health Centers throughout the state. The 340B program is particularly important for safety net hospitals serving uninsured and Medicaid populations, where the discount margins help fund uncompensated care and other safety net services.

The Buy-and-Bill Model for Part B Drugs

Most Part B drugs are administered under the buy-and-bill model, where the physician or hospital outpatient department:

1. Purchases the drug from a wholesaler or specialty distributor (typically at WAC or with negotiated discounts).
2. Stores the drug in inventory.
3. Administers the drug to the patient during a clinic visit.
4. Bills Medicare for both the drug (at ASP+6%) and the administration service.
5. Bills the beneficiary (or Medigap/secondary insurance) for the 20 percent coinsurance.

Practitioner Economics of Buy-and-Bill

The buy-and-bill model creates several practitioner considerations:

Inventory Investment: Practitioners must maintain drug inventory, tying up capital. For high-cost biologics, a single dose can represent thousands of dollars, and a cancer center may carry a substantial drug inventory at any time.

Acquisition vs Payment Spread: The practitioner's economics depend on whether the actual acquisition price is below or above ASP. For most drugs in the post-2005 ASP era, the spread has narrowed substantially compared to the pre-2005 AWP era. The 6 percent statutory margin is offset by overhead, inventory risk, and administrative costs.

Risk of Loss: Wasted vials, spoiled inventory, lost doses, and patient no-shows create financial risk. Practitioners use various inventory management strategies (just-in-time ordering, vial sharing where feasible) to minimize waste.

Sequestration Impact: Sequestration reduces the effective payment margin, putting additional pressure on practice economics.

Alternative Distribution Models

Some Part B drugs are increasingly distributed through white bagging or brown bagging models:

White Bagging: A specialty pharmacy ships the drug directly to the provider site for a specific patient, eliminating inventory risk for the provider but creating timing and coordination challenges.

Brown Bagging: A specialty pharmacy ships the drug directly to the patient, who brings it to the provider for administration. This raises potential drug handling concerns and is generally discouraged for chain-of-custody reasons.

Clear Bagging: A specialty pharmacy within the same health system delivers the drug to the provider site for a specific patient, combining the inventory advantages of white bagging with the chain-of-custody benefits of in-system pharmacy.

Medicare's payment policies remain centered on buy-and-bill, but commercial insurance increasingly drives toward alternative models. Georgia oncology practices generally use buy-and-bill for Medicare patients while accommodating various commercial insurance distribution models.

Beneficiary Cost-Sharing for Part B Drugs

The 20 Percent Coinsurance

After the annual Part B deductible (the dollar amount is indexed annually; confirm the current-year figure on Medicare.gov), beneficiaries are responsible for 20 percent coinsurance on Part B drug payment. The coinsurance is calculated on the Medicare allowed amount (ASP+6 percent, pre-sequestration), not the post-sequestration payment.

For high-cost drugs, this 20 percent coinsurance is substantial. A patient receiving pembrolizumab every three weeks for advanced cancer may face annual Part B drug coinsurance in the tens of thousands of dollars. A patient receiving infliximab every eight weeks for inflammatory bowel disease can also face significant annual coinsurance depending on dose.

Medigap Coverage of Part B Coinsurance

Medicare Supplement Insurance (Medigap) policies cover the 20 percent Part B coinsurance for enrolled beneficiaries. Plans F, G, and N are among the most popular Medigap plans, with Plan G typically providing the most comprehensive coverage for new enrollees (Plan F is generally no longer available to people who became eligible for Medicare after January 1, 2020).

Georgia is a Medigap-friendly state with multiple insurers offering Medigap plans. Beneficiaries who enroll in Medigap during their initial enrollment window (the six months beginning when they turn 65 and enroll in Part B) are guaranteed issue without medical underwriting. Beneficiaries who delay Medigap enrollment may face medical underwriting and could be denied coverage or charged higher premiums based on health status.

Medicare Advantage Cost-Sharing for Part B Drugs

Medicare Advantage plans replace traditional Medicare cost-sharing with plan-specific cost-sharing structures. For Part B drugs, MA plans typically use one of several approaches:

Specialty Drug Coinsurance: Many MA plans apply a 20 percent coinsurance (or higher) for specialty Part B drugs, sometimes with an annual out-of-pocket cap.

Specialty Drug Copayment: Some plans use flat copayments per administration.

Maximum Out-of-Pocket (MOOP) Limit: All MA plans must include a maximum out-of-pocket limit set annually by CMS. The MOOP provides a backstop against catastrophic out-of-pocket costs.

Patient Assistance Programs

For uninsured and underinsured beneficiaries, patient assistance programs from drug manufacturers, foundations, and other sources can help cover Part B drug coinsurance. Major foundations include the Patient Access Network Foundation, the Patient Advocate Foundation, the Leukemia and Lymphoma Society Co-Pay Assistance Program, and the Cancer Care Co-Payment Assistance Foundation. Georgia oncology practices typically have financial counselors who help patients identify and apply for assistance.

Medicare Advantage Step Therapy for Part B Drugs

Under Section 1854(j)(2) of the Social Security Act and current CMS guidance, Medicare Advantage plans may apply step therapy requirements to Part B drugs. Step therapy requires beneficiaries to try lower-cost or preferred drugs before higher-cost alternatives.

Step Therapy Protections

MA step therapy must comply with several protections:

Annual Review: Plans must review step therapy policies annually to ensure clinical appropriateness.

Exceptions Process: Plans must offer an exceptions process for beneficiaries whose clinical situation warrants direct access to the higher-step drug. Common exceptions include prior failure of the preferred drug, intolerance, or contraindication.

Continuation for Existing Therapy: Plans generally must allow beneficiaries already stable on a particular drug to continue therapy without being forced to switch (grandfathering protection).

Coordination with Care Management: Step therapy must be coordinated with care management programs to support beneficiary engagement.

Beneficiary Appeals

Beneficiaries denied access to a Part B drug due to step therapy may file an expedited appeal with the MA plan. If the plan upholds the denial, the beneficiary can appeal to the Independent Review Entity (IRE), then to the Administrative Law Judge, then to the Medicare Appeals Council, and finally to federal district court.

Georgia beneficiaries can get help with MA appeals from GeorgiaCares SHIP (1-866-552-4464), the Medicare Rights Center (1-800-333-4114), and Atlanta Legal Aid (404-377-0701).

Georgia Part B Drug Delivery Landscape

Major Georgia Cancer Centers

Georgia has multiple major cancer centers that are significant Part B drug billers:

Northside Cancer Institute: Part of Northside Hospital, one of the largest community cancer programs in the country, with multiple Atlanta-area locations.

Piedmont Cancer Institute: Part of Piedmont Healthcare, with multiple metro Atlanta and Georgia locations.

Emory Winship Cancer Institute: An NCI-designated comprehensive cancer center, the only such designated cancer center in Georgia, providing the highest level of cancer research and treatment integration.

Augusta University Cancer Center (Georgia Cancer Center): Part of Augusta University's Medical College of Georgia, providing comprehensive cancer care for east Georgia.

Georgia Cancer Specialists: A large community oncology practice with multiple locations across Georgia.

Memorial Health Cancer Center (Savannah): Part of HCA Healthcare, providing cancer care for coastal Georgia.

Wellstar Cancer Programs: Part of Wellstar Health System, with multiple Atlanta-area cancer centers.

Specialty Practices Beyond Oncology

Beyond oncology, multiple Georgia specialty practices use Part B drugs extensively:

Rheumatology Practices: Infused biologics for rheumatoid arthritis, psoriatic arthritis, ankylosing spondylitis. Major Georgia rheumatology practices include Piedmont Rheumatology, Northside Rheumatology, and various independent practices.

Gastroenterology Practices: Infused biologics for inflammatory bowel disease (Crohn's, ulcerative colitis). Atlanta Gastroenterology Associates and multiple other practices.

Nephrology Practices: ESAs and iron therapy for chronic kidney disease anemia. Dialysis-related drugs are typically paid through ESRD PPS rather than Part B.

Neurology Practices: Various infused therapies for multiple sclerosis (natalizumab, ocrelizumab) and other neurological conditions.

Dermatology Practices: Infused biologics for severe psoriasis, atopic dermatitis.

340B Participation

Major Georgia 340B-participating hospitals include:

Grady Memorial Hospital: Atlanta's primary safety net hospital, a disproportionate share hospital with substantial 340B savings.

Children's Healthcare of Atlanta: A children's hospital system with 340B participation.

Augusta University Health: Academic medical center with 340B participation.

Various Critical Access Hospitals: Rural Georgia CAHs participate in 340B.

Federally Qualified Health Centers: Throughout Georgia, FQHCs participate in 340B for their pharmacy services.

Palmetto GBA: Georgia's Part B MAC

Palmetto GBA serves as the Part B Medicare Administrative Contractor (MAC) for Georgia (along with several other states in Medicare Administrative Contractor Jurisdiction J). Palmetto GBA processes Part B claims (including drug claims), publishes Local Coverage Determinations (LCDs) for Georgia, conducts medical review and audits, and provides provider education.

Georgia providers contact Palmetto GBA for Part B claims questions, coverage determinations, and audit responses; current contact details are on the Palmetto GBA website. Beneficiaries can also contact Palmetto GBA for claims status and denial inquiries.

Specialty Pharmacy Distribution

Major specialty pharmacies serving Georgia Medicare beneficiaries include:

CVS Specialty Pharmacy: Multiple Atlanta-area locations, extensive specialty drug distribution.

Walgreens Specialty Pharmacy: Specialty drug distribution and patient support.

Accredo (Express Scripts): Specialty pharmacy services.

Optum Specialty Pharmacy: Specialty distribution for UnitedHealth-affiliated plans and others.

Hospital-Affiliated Specialty Pharmacies: Major Georgia hospitals operate their own specialty pharmacies (Emory Healthcare Specialty Pharmacy, Northside Specialty Pharmacy, Piedmont Specialty Pharmacy, etc.) primarily for white-bagging models and 340B-eligible distribution.

Worked Example 1: Georgia Cancer Center Chemotherapy ASP+6% Payment

Scenario: A 68-year-old Georgia Medicare beneficiary diagnosed with non-small cell lung cancer receives pembrolizumab (Keytruda) every three weeks at Northside Cancer Institute. The patient has traditional Medicare with Medigap Plan G.

Drug Details: Pembrolizumab is billed under a Part B HCPCS code. Payment is based on the current quarterly ASP-based rate published by CMS and applied by Palmetto GBA.

Payment Calculation:

• Medicare allowed amount: ASP+6 percent per the current quarterly rate.
• Beneficiary 20 percent coinsurance: 20 percent of the Medicare allowed amount (covered by Medigap Plan G).
• Medicare program payment to Northside: 80 percent of allowed, reduced by sequestration.

Annual Impact: With roughly 17 infusions per year (every three weeks), total Medicare drug expenditure is substantial. Beneficiary coinsurance is fully covered by Medigap Plan G, so beneficiary out-of-pocket cost for the drug is $0.

Additional Services: Northside also bills for the chemotherapy administration service (under the applicable HCPCS codes for infusion administration) and any related visits, which receive separate Medicare physician fee schedule payment.

Provider Economics: Northside acquires pembrolizumab through their specialty distributor at or near ASP. The 6 percent statutory margin minus sequestration yields the net margin on drug cost, before inventory holding costs, waste, and administrative overhead.

Worked Example 2: 340B Hospital Drug Payment

Scenario: A 72-year-old Georgia Medicare beneficiary receives rituximab (Rituxan) infusion at Grady Memorial Hospital outpatient infusion center for non-Hodgkin lymphoma. Grady is a 340B-participating disproportionate share hospital.

Drug Details: Rituximab is billed under a Part B HCPCS code. Payment is based on the current quarterly ASP-based rate published by CMS.

Payment Calculation (Post-Becerra Decision):

• Medicare allowed amount: ASP+6 percent (same rate as non-340B hospitals after the Supreme Court decision).
• Beneficiary 20 percent coinsurance: 20 percent of the Medicare allowed amount.
• Medicare program payment to Grady: 80 percent of allowed, reduced by sequestration.

340B Acquisition Cost: Grady acquires rituximab at the 340B ceiling price, which can be substantially below the wholesale acquisition cost. The differential between Medicare payment and 340B acquisition cost generates savings that Grady uses to support uncompensated care, other safety net services, and operational costs.

Beneficiary Impact: The beneficiary's 20 percent coinsurance applies to the full Medicare allowed amount. If covered by Medigap, beneficiary out-of-pocket is $0. If beneficiary has traditional Medicare without Medigap, beneficiary owes the coinsurance unless they qualify for hospital financial assistance.

Policy Context: Following the Supreme Court's decision in American Hospital Association v. Becerra, 340B hospitals receive the same ASP+6 percent payment as non-340B hospitals for separately payable drugs in OPPS. The 340B program's value to participating hospitals comes from the differential between the discounted 340B acquisition cost and Medicare payment, not from a higher Medicare payment rate.

Worked Example 3: Inflation Rebate for a High-Priced Drug

Scenario: A Georgia provider administers a hypothetical Part B drug to multiple Medicare beneficiaries. The drug's manufacturer raised the price by a percentage that materially exceeds annual CPI-U inflation.

Inflation Rebate Mechanics:

• The benchmark ASP is set to the baseline-quarter ASP indexed by CPI-U.
• The current ASP is compared to the inflation-adjusted benchmark.
• If the current ASP exceeds the inflation-adjusted benchmark, the manufacturer owes a per-unit rebate equal to the excess multiplied by Medicare units sold.

Beneficiary Impact: Beneficiaries pay 20 percent coinsurance based on the inflation-adjusted payment amount rather than on the higher actual ASP-based payment, modestly reducing beneficiary out-of-pocket cost for inflation-rebated drugs.

Manufacturer Behavior Impact: The inflation rebate creates strong incentives for manufacturers to limit price increases on Part B drugs to the rate of inflation. Manufacturer pricing announcements following the IRA reflected meaningful moderation in Part B drug price increases compared to historical patterns.

Worked Example 4: IRA Drug Price Negotiation Scenario

Scenario: A high-cost drug selected by HHS for negotiation in an early cohort has a negotiated Maximum Fair Price (MFP) that takes effect on the schedule set by CMS for that cohort.

Beneficiary Impact: Beneficiaries enrolled in Part D plans benefit from the MFP through reduced cost-sharing. The reduced drug cost flows through to lower Part D plan formulary tier costs.

Manufacturer Impact: The manufacturer must offer the drug at the MFP to Part D enrollees. Failure to negotiate or to offer the MFP triggers significant excise tax consequences under Section 5000D of the Internal Revenue Code.

Part B Drug Negotiation: Part B drugs become eligible for selection beginning with later selection rounds. Top Part B drug candidates include high-cost oncology drugs (pembrolizumab, nivolumab, others), high-cost infused biologics, and other Part B drugs with substantial Medicare spending. Negotiated Part B MFPs would substantially reduce both Medicare program spending and beneficiary 20 percent coinsurance for those drugs.

Worked Example 5: Part B vs Part D Coverage Determination

Scenario: A Georgia Medicare beneficiary with rheumatoid arthritis is starting biologic therapy. Her physician offers two options: (1) infliximab (Remicade) IV infusion every 8 weeks at the office, or (2) adalimumab (Humira) self-injection every 2 weeks at home.

Infliximab Coverage: Part B coverage. Infused by the physician, not self-administered. ASP+6 percent payment to the office, 20 percent beneficiary coinsurance. For Medicare beneficiaries with Medigap, no out-of-pocket cost.

Adalimumab Coverage: Part D coverage. Self-administered subcutaneous injection. Beneficiary pays cost-sharing per the Part D plan formulary (typically a high specialty tier copayment or coinsurance, subject to the IRA Section 11201 annual out-of-pocket cap).

Practical Implications: A Medigap-enrolled beneficiary may have lower out-of-pocket cost on the Part B option, even though both drugs are biologic and treat the same condition. A beneficiary without Medigap might face substantial Part B coinsurance on the IV option but benefits from the Part D out-of-pocket cap on the self-injectable option. Coverage choice influences the optimal therapy selection from a financial perspective, in addition to clinical considerations.

Worked Example 6: Beneficiary Cost-Sharing for Part B Drug

Scenario: A Georgia Medicare beneficiary with metastatic colorectal cancer receives 5-fluorouracil (5-FU), leucovorin, and oxaliplatin (FOLFOX regimen) plus bevacizumab (Avastin) every two weeks at Piedmont Cancer Institute. The patient has traditional Medicare without Medigap.

Per-Treatment Medicare Allowed Amount: Each treatment generates a Medicare allowed amount that sums the ASP+6 percent rates for each component drug plus the administration services. For a multi-drug regimen including a high-cost biologic like bevacizumab, the per-treatment allowed amount is in the low four figures.

Beneficiary 20 Percent Coinsurance per Treatment: A meaningful share of the allowed amount, applied to every treatment.

Annual Beneficiary Coinsurance: With 26 treatments per year (every two weeks), the cumulative annual beneficiary coinsurance is substantial, plus the Part B deductible.

Financial Planning: Without Medigap, the beneficiary faces substantial out-of-pocket costs. Piedmont's financial counselors would discuss:

• Medicaid eligibility (if income/asset criteria met).
• Manufacturer patient assistance programs (especially for bevacizumab).
• Foundation co-pay assistance (Patient Access Network, Patient Advocate Foundation, others).
• Hospital financial assistance per Piedmont's policy.
• Whether enrolling in a Medicare Advantage plan with annual out-of-pocket maximum might provide better protection.

Critical Insight: The financial burden of Part B drug coinsurance for high-cost chemotherapy is a primary driver of Medigap enrollment among Georgia Medicare beneficiaries with cancer or other conditions requiring frequent infused drugs.

Best Practices for Georgia Medicare Beneficiaries

1. Understand the Part B vs Part D distinction: Know whether your medications are covered under Part B (physician-administered) or Part D (self-administered). Confirm with your providers.

2. Enroll in Medigap during your initial enrollment period: The six-month window beginning at age 65 (or Part B enrollment) provides guaranteed-issue Medigap with no medical underwriting. Plans G and N are popular Medigap options.

3. Verify provider Medicare participation: Confirm that your physician, cancer center, or specialty practice accepts Medicare assignment for Part B drugs. Non-assigned providers may bill you more than the Medicare-allowed amount.

4. Use Care Compare for cancer centers: The Medicare Care Compare tool provides information on hospitals and certain practices. Georgia's NCI-designated cancer center is Emory Winship Cancer Institute.

5. Engage financial counselors at major cancer centers: Northside, Piedmont, Emory, Augusta University, and other major cancer programs have dedicated financial counselors who can help with patient assistance enrollment, foundation applications, and financial navigation.

6. Apply for patient assistance proactively: Manufacturer patient assistance programs (PAP), foundation co-pay assistance, and hospital financial assistance often have application processes that take weeks. Begin applications when treatment is being planned, not after bills arrive.

7. Track your Part B drug costs: Maintain records of treatments, allowed amounts, beneficiary coinsurance, and out-of-pocket payments. This documentation supports tax deductions (medical expense itemization) and patient assistance applications.

8. Coordinate Part B and Part D: If your provider offers Part B (infused) and Part D (self-administered) alternatives for the same condition, evaluate the total financial impact including premiums, deductibles, coinsurance, and out-of-pocket caps before choosing.

9. Understand IRA changes: The Inflation Reduction Act's provisions affect your drug costs through Part B inflation rebates, the Part D annual out-of-pocket cap (IRA Section 11201), and the Medicare Drug Price Negotiation Program. Stay informed about changes affecting your medications.

10. Use GeorgiaCares SHIP for guidance: GeorgiaCares (Georgia's State Health Insurance Assistance Program, 1-866-552-4464) provides free, unbiased counseling on Medicare benefits, including Part B drug coverage and Medigap options.

11. Appeal denials promptly: If Medicare or your MA plan denies coverage for a Part B drug, file an appeal within the timeframes specified in the denial notice. Expedited appeals are available when delay would jeopardize health.

12. Maintain detailed medical records: Documentation of medical necessity, prior failures of alternative drugs, and clinical justification supports both Medicare coverage and patient assistance program applications.

13. Understand 340B implications: If you receive Part B drugs at a 340B hospital, your Medicare payment and beneficiary coinsurance are the same as at a non-340B hospital. The 340B program benefits the hospital, not directly the patient, though the savings support the hospital's safety net services.

14. Review MA plan step therapy carefully: If considering or enrolled in a Medicare Advantage plan, review the plan's step therapy policies for Part B drugs. If your current therapy is at risk of step therapy requirements, discuss with your physician about exceptions or grandfathering.

Common Issues and How to Address Them

1. Drug not covered under Part B (claims that Part B covered service is actually Part D): When Medicare denies a drug claim as Part D instead of Part B, the physician's billing staff should verify the Part B coverage criteria (physician administration, not usually self-administered, medical necessity) and resubmit with appropriate documentation. Beneficiary should not pay until appeals are exhausted.

2. High out-of-pocket coinsurance without Medigap: Beneficiaries without Medigap face 20 percent coinsurance with no annual cap. Solutions include applying for Medigap if guaranteed-issue rights apply (e.g., during initial enrollment period, special enrollment circumstances), foundation co-pay assistance, manufacturer patient assistance, or considering MA enrollment with out-of-pocket maximum.

3. MA step therapy delays: When MA plans require trial of preferred drugs before approving the drug your physician recommends, request an expedited exception based on prior failure, intolerance, or contraindication. Engage the plan's pharmacy benefits manager and document medical necessity thoroughly.

4. Drug shortages affecting Part B treatments: Cancer chemotherapy shortages and supply disruptions can delay treatment. Major Georgia cancer centers participate in supply management strategies and can sometimes substitute alternative regimens. The American Society of Health-System Pharmacists tracks drug shortages.

5. Coordination issues with specialty pharmacy white bagging: When commercial insurance requires white-bagging delivery but Medicare uses buy-and-bill, providers may need to coordinate different distribution channels for different patients. Beneficiaries should understand which distribution model applies and any timing implications.

6. 340B controversies and audits: The 340B program is subject to ongoing oversight, including HRSA audits and federal litigation. Beneficiaries are generally insulated from these dynamics, though provider participation changes can affect care continuity.

7. Inflation rebate calculation disputes: Manufacturers occasionally dispute CMS inflation rebate calculations. These disputes are resolved through administrative processes and do not affect beneficiary cost-sharing or coverage.

8. Part B drug denials for medical necessity: Medicare or MA plans may deny coverage when the drug is not on the approved indication list, when prior authorization criteria are not met, or when off-label use is not supported. Appeals should include peer-reviewed literature, clinical guidelines (NCCN, ASCO, others), and physician justification.

9. Immunosuppressant coverage termination at the standard window: For most transplant recipients (except kidney transplants after IRA modification), Part B immunosuppressant coverage ends at the standard post-transplant window. Beneficiaries should plan for Part D coverage of immunosuppressants beyond this period, including formulary considerations.

10. DME nebulizer drug coverage confusion: Inhalation drugs delivered through DME nebulizers are Part B, but the same drugs in metered dose inhalers (MDI) or other delivery systems are Part D. Coverage depends on the delivery mechanism, not just the drug ingredient.

11. Vaccine coverage variations: Most Part B vaccines (influenza, pneumococcal, hepatitis B for high-risk, COVID-19) have no beneficiary cost-sharing. Shingles vaccine and Tdap are Part D, now also without cost-sharing under IRA Section 11401. Travel vaccines are generally not covered.

12. Buy-and-bill vs assignment confusion: Beneficiaries may be confused by the difference between Part B drug billing (where the provider bills Medicare for both drug and administration) and other coverage models. Provider financial counselors and SHIP counselors can explain.

13. Sequestration impact on payment timing: Sequestration affects how much Medicare pays providers, not beneficiary coinsurance or coverage. Beneficiaries should not see direct impact from sequestration on their costs.

14. Negotiated drug pricing changes: As the IRA Drug Price Negotiation Program takes effect, selected drugs will have negotiated prices. Beneficiaries should understand whether their medications are on the negotiated list and what the price changes mean for their costs.

A few more common questions:

What is the Average Sales Price (ASP)? The Average Sales Price is the total sales revenue divided by total unit volume for a drug, reported quarterly by manufacturers to CMS under Section 1927(b)(3)(A) and Section 1847A(c) of the Social Security Act. The reporting includes most U.S. sales (wholesalers, group purchasing organizations, hospitals, physicians, clinics) but excludes certain federal purchasers like the Department of Defense and the Department of Veterans Affairs. CMS aggregates manufacturer ASPs into volume-weighted payment rates for each HCPCS code.

What happens when ASP data is not available? When ASP data is unavailable (typically for newly approved drugs in the first quarters after market entry), Section 1847A(c)(4) of the Social Security Act provides that payment is based on Wholesale Acquisition Cost (WAC) at a set percentage specified by current statute. The WAC-based methodology applies until quarterly ASP data becomes available.

How is Part B drug payment different in hospital outpatient departments? Hospital outpatient Part B drugs are paid through the Outpatient Prospective Payment System (OPPS) under Section 1833(t) of the Social Security Act. Drugs with per-day costs above the applicable OPPS packaging threshold are separately payable at ASP+6 percent. Drugs below the threshold are packaged into the OPPS payment for the underlying procedure. New drugs receive pass-through status under Section 1833(t)(14) for a limited transition period after market entry.

What is the buy-and-bill model? Under buy-and-bill, the physician or hospital outpatient department purchases the drug from a wholesaler or specialty distributor, stores it in inventory, administers it to the patient, and then bills Medicare for both the drug at ASP+6 percent and the administration service. Buy-and-bill creates inventory risk for providers but allows immediate administration. Most Part B drugs are administered through buy-and-bill in Georgia oncology and specialty practices.

What is my cost-sharing for Part B drugs? Beneficiaries are responsible for 20 percent coinsurance on Part B drugs after the annual Part B deductible. For high-cost drugs, this 20 percent can represent significant out-of-pocket cost annually. Medigap policies cover the 20 percent Part B coinsurance for enrolled beneficiaries. Plans G and N are the most popular new-enrollee options (Plan F is generally no longer available to people newly Medicare-eligible after January 1, 2020).

When does Part B cover immunosuppressants? Part B covers immunosuppressant drugs for Medicare beneficiaries who received an organ transplant in a Medicare-certified facility, where Medicare paid for the transplant. Coverage is generally time-limited post-transplant under longstanding rules. The Inflation Reduction Act extended coverage for kidney transplant recipients beyond the standard window under specific circumstances. Common Part B immunosuppressants include tacrolimus, cyclosporine, mycophenolate, and sirolimus.

What is the IRA Part D out-of-pocket cap? Section 11201 of the IRA established an annual cap on beneficiary out-of-pocket spending under Part D (subject to annual inflation adjustment). This cap applies to Part D drug spending, not Part B drug spending. Part B drug spending remains subject to 20 percent coinsurance with no Part B cap (other than the Medicare Advantage out-of-pocket maximum for MA-enrolled beneficiaries). Confirm the current-year cap on Medicare.gov.

How do dual-eligible beneficiaries access Part B drugs? Dual-eligible beneficiaries (those enrolled in both Medicare and Medicaid) generally have their Part B coinsurance covered by Medicaid. For Georgia full-benefit dual-eligibles, Medicaid acts as a Qualified Medicare Beneficiary (QMB) program, paying the 20 percent Part B coinsurance and other Medicare cost-sharing. The dual-eligible beneficiary should not be balance-billed by providers for QMB-protected costs. The Medicare Savings Programs (QMB, SLMB, QI) help low-income beneficiaries with Medicare premiums and cost-sharing.

Brevy: Your Partner in Navigating Medicare Part B Drug Coverage

At Brevy (brevy.com), our mission is to provide Georgia families with comprehensive, up-to-date guidance on Medicare, Medicaid, VA benefits, and the broader eldercare landscape. The Part B drug payment framework, like all Medicare programs, is complex and evolving, with the Inflation Reduction Act of 2022 introducing the most significant changes in two decades. Our team continuously updates our content to reflect current statutory provisions, regulatory developments, and Georgia-specific operational details. If you or a family member faces decisions about Part B drug coverage, Medigap enrollment, Medicare Advantage step therapy, or financial assistance for high-cost specialty drugs, please review our broader Georgia Medicare guides and contact the resources listed below for personalized counseling.

Find personalized help navigating Georgia Medicare Part B drug coverage at brevy.com.