(a) General. For each Part B rebatable drug, CMS will determine the total number of billing units of the billing and payment code subject to a rebate in the applicable calendar quarter using final action Medicare fee-for-service claims for which Medicare payment was allowed and greater than zero.

(b) Total billing units. Using final action claims in the Medicare fee-for-service claims repository, at least 3 months after the end of the applicable calendar quarter, CMS will determine the total number of billing units for a Part B rebatable drug in an applicable calendar quarter by identifying separately payable claim lines for the billing and payment code for dates of service in that applicable calendar quarter and excluding the following billing units in claim lines as applicable:

(1) Billing units of drugs acquired through the 340B Program. CMS will exclude billing units acquired under the 340B Program as identified through—

(i) Separately payable units in all professional claim lines for dates of service during 2023 and 2024 that were billed with the “JG” or “TB” modifiers and separately payable billing units in claim lines for professional claims with dates of service during 2023 and 2024 from suppliers that are associated with covered entities listed by the Health Resources and Services Administration (HRSA) 340B Office of Pharmacy Affairs Information System (OPAIS) as participating in the 340B Program. CMS will use National Provider Identifiers (NPI) and/or Medicare Provider Numbers (MPN), or other fields in the OPAIS database (such as name and address) if NPI or MPN is not available, to identify these suppliers and the claims submitted with such identifiers;

(ii) Separately payable billing units in claim lines for institutional claims that are billed with the “JG” or “TB” modifiers and units in institutional claims from covered entities that are critical access hospitals and Maryland waiver hospitals with dates of service from January 1, 2023 through December 31, 2023. CMS will use NPIs and MPNs, or other fields in the OPAIS database (such as name and address) if NPI or MPN are not available, to identify these suppliers and the claims submitted with such identifiers;

(iii) Separately payable billing units in claim lines for institutional claims that are billed with the “JG” or “TB” modifiers for claims with dates of service from January 1, 2024 through December 31, 2024; and

(iv) Separately payable billing units in claim lines billed with the “TB” modifier for claims with dates of service on or after January 1, 2025.

(2) Billing units with a rebate under section 1927 of the Social Security Act. Subject to paragraph (b)(2)(i) of this section, CMS will exclude billing units from claims with dates of service during a month within an applicable calendar quarter if the units are furnished to a dually eligible Medicare beneficiary who has Medicaid coverage that may provide cost-sharing assistance.

(i) CMS will not exclude billing units from claims when the Medicare beneficiary has Medicaid coverage that does not include cost-sharing assistance, including Specified Low-Income Medicare Beneficiaries (SLMB), Qualified Disabled and Working Individuals (QDWI), and Qualifying Individuals (QI) beneficiaries.

(ii) [Reserved]

(3) Billing units that are packaged into the payment amount for an item or service and are not separately payable. CMS will exclude billing units that are packaged into the payment amount for an item or service and are not separately payable.

(4) Billing units when a drug is no longer a Part B rebatable drug. In situations where a Part B rebatable drug that is a single source drug becomes a multiple source drug during an applicable calendar quarter, CMS will:

(i) Determine if such drug has become a multiple source drug by reviewing FDA's most recent publication of “Approved Drug Products with Therapeutic Equivalence Evaluations” (commonly known as the Orange Book) for a drug that is that is rated as therapeutically equivalent to such drug; and,

(ii) If a therapeutically equivalent drug is identified as set forth in paragraph (b)(4)(i) of this section, determine if the therapeutically equivalent drug was sold or marketed during the applicable calendar quarter; and

(iii) Exclude billing units of such drug furnished on and after the first day of the calendar month in which the therapeutically equivalent drug was first sold or marketed during the applicable calendar quarter.

(5) Billing units subject to discarded drug refunds. CMS will exclude billing units of discarded refundable single-dose container or single-use package drugs for which a refund is owed as set forth in § 414.940 of this chapter from the calculation of rebate amounts. For applicable calendar quarters beginning on or after January 1, 2024, these billing units will be excluded as part of the reconciliation process described at § 427.501(d).