Methodology and Data Sources

Last updated: April 18, 2026

Why this page exists. CareCost Estimate is designed to qualify as non-device clinical decision support ("CDS") software under Section 520(o)(1)(E) of the Federal Food, Drug, and Cosmetic Act. One of the statutory criteria for that classification is that a healthcare professional must be able to independently review the basis for any recommendation the software provides. This page exists to satisfy that criterion — to describe, in plain language, what data the Service uses, how estimates are calculated, where the numbers come from, and where the limits of the analysis lie.

1. What the Service is and is not

The Service is: an informational reference for licensed healthcare providers that surfaces publicly available pricing, billing, and patient-assistance-program information and performs arithmetic on user-supplied benefit parameters.

The Service is not: a medical device, a source of reimbursement or billing advice, a claim-adjudication system, or a substitute for verifying coverage with a patient's specific payer. See our Terms of Service for the full disclaimer.

2. Inputs the Service accepts

Each estimate is computed from inputs the user provides. No output is possible without an affirmative, user-entered value for each required field.

Drug and billing code — HCPCS J-code or Q-code selected from an autocomplete list of CMS-recognized drugs.
Dose and unit of measure — total mg, mg/kg, mg/m², or flat dose, as applicable to the drug's FDA labeling.
Patient weight and height — where the dose depends on weight or body surface area.
Insurance type — Medicare Part B, Medicare Advantage, commercial, government, Medicaid, or uninsured.
Benefit parameters — deductible, amount met, out-of-pocket maximum, coinsurance split.
Secondary coverage — Medigap plan letter, TRICARE, or secondary commercial payer, where applicable.
ICD-10 diagnosis — used to match diagnosis-gated patient assistance foundations; optional for the core cost calculation.

Inputs are limited to what is necessary for the calculation. The Service is not intended to receive or store patient identifiers (name, date of birth, MRN, policy number, etc.).

3. Data sources

Data	Source	Update cadence
Medicare Part B drug payment limits (ASP + 6%)	CMS Part B Drug Pricing Files (ASP Pricing Files)	Quarterly, published by CMS
HCPCS J-code descriptions and billing units	CMS HCPCS Level II long descriptors	Annual, with mid-year corrections
NDC → HCPCS crosswalk	CMS ASP NDC-HCPCS Crosswalk	Quarterly
FDA-labeled drug formulation (vial, prefilled syringe, pen-injector, auto-injector)	openFDA drug-ndc bulk dataset (NDC Directory)	Refreshed against FDA releases, typically monthly
Commercial payer negotiated rates	Payer-published Transparency-in-Coverage Machine-Readable Files (MRFs) under 45 CFR Part 147	Monthly, where published by the payer
Physician Fee Schedule (administration codes)	CMS Medicare Physician Fee Schedule Look-Up Tool	Annual, with quarterly updates
Patient assistance programs (manufacturer copay, foundation grants)	Manufacturer-published program pages, foundation websites (PAN, HealthWell, GoodDays, etc.), RxAssist	Re-validated per program cadence; statuses re-checked weekly
ICD-10 diagnosis codes	CDC National Center for Health Statistics ICD-10-CM	Annual (Oct 1)
Prior-authorization and REMS flags	Aggregated from CMS Part D formulary publications and FDA REMS database	Quarterly

The ASP quarter in effect for any given estimate is displayed in the Cost Breakdown panel as the pricing source label (e.g., "CMS ASP 2026 Q2"). Users can verify the quarter at the time of estimate generation.

4. Calculation logic

4.1 Units and drug cost

Each drug is billed in CMS-defined units. The Service converts a user-entered dose into billing units by dividing the total mg (or appropriate unit) by the CMS-defined increment:

billing_units = total_dose / cms_increment
drug_allowed = billing_units × payment_limit

For Medicare Part B, the payment_limit is ASP + 6% drawn from the active CMS ASP quarter. For commercial payers where a Transparency-in-Coverage negotiated rate is available for the drug in the selected state and the contract sample size meets our minimum threshold, the negotiated rate is used; otherwise the estimate falls back to ASP and is clearly labeled as such.

4.2 Administration codes

Administration charges are computed using CPT codes appropriate to the drug's FDA-labeled route (intravenous infusion, intravenous push, therapeutic injection, biologic injection). The Service suggests the most common administration code for each drug and allows manual override. Reimbursement for administration is drawn from the CMS Medicare Physician Fee Schedule or payer MRF as available.

4.3 Patient out-of-pocket cost

The patient's out-of-pocket cost is computed by applying, in sequence: the remaining deductible, then the coinsurance split, then any applicable out-of-pocket maximum. Secondary-coverage effects (Medigap, TRICARE, or secondary commercial) are applied per the selected plan's standardized benefit or user-entered parameters. Where copay assistance is entered, the assistance is applied against the patient liability up to the program's annual benefit maximum.

4.4 Patient assistance matching

The Service matches a selected drug and diagnosis against our patient-assistance-program database in three ways, in order of precision:

Manufacturer match — HCPCS code, drug name, or generic name matches a manufacturer program.
Foundation match — a disease-fund explicitly lists the drug name as covered.
Foundation diagnosis match — the ICD-10 codes (from FDA labeling or user input) intersect with a foundation disease-state list, and/or the drug is on the foundation's covered-drugs list (when such a list exists).

Programs are filtered by the selected insurance type against each program's published eligibility (e.g., a commercial-only copay card is suppressed for Medicare patients). Program open/closed/waitlist status is surfaced from each foundation's own status-checking endpoint or published page.

5. Known limitations

CMS quarters lag real-world pricing. ASP is reported by manufacturers on a two-quarter lag. Estimates reflect the quarter currently in effect, not the most recent actual transaction price.
Negotiated rates vary by contract, state, and facility. MRF data represents a sample of payer contracts; a specific practice's contract may differ. When the sample is thin, a confidence badge is displayed next to the rate.
Coverage and prior authorization are payer-specific. The Service surfaces general PA flags where published, but medical necessity, step therapy, and payer-specific policy bulletins are not enumerated. Users must verify with the payer.
Formulation may affect benefit type. Drugs with self-administered formulations (auto-injector, pen, prefilled syringe for subcutaneous or intramuscular self-injection) may be covered under a patient's pharmacy benefit rather than medical benefit, which can place them on the Medicare Self-Administered Drug (SAD) exclusion list. The Service attempts to flag these cases but a final benefit determination is the payer's.
Patient assistance program terms change frequently. Maximum annual benefit, income thresholds, and open/closed status are snapshots. Eligibility must be confirmed with the program at the time of enrollment.
Off-label and investigational use. The Service does not make coverage recommendations for off-label or investigational use of any drug.
Non-CMS-recognized drugs and NOC codes. For drugs billed under "not otherwise classified" codes (J3490, J9999, etc.), the Service requires the user to supply the billed NDC and may not be able to surface an ASP payment limit. Users can still proceed with a cost estimate by entering manual pricing inputs.

6. Change log

Changes to the calculation logic, data sources, and known limitations are logged in our public release notes. Material changes that affect estimate outputs trigger a user-facing notification at next login.

7. Validation and quality control

The Service is validated on an ongoing basis against:

Manufacturer brand billing guides (where published);
CMS MLN Matters articles and Medicare Administrative Contractor (MAC) LCD/LCA guidance;
Expert review of high-volume J-codes by practicing infusion and specialty-pharmacy billing professionals;
Regular cross-checks between the CMS NDC-HCPCS crosswalk and the openFDA NDC Directory to detect formulation and dosage-form drift.

Users who identify discrepancies are encouraged to report them to support@carecostestimate.com; corrections are triaged on a rolling basis and logged in the change log.

8. Contact

For questions about the methodology, data sources, or validation process, contact support@carecostestimate.com. For regulatory or compliance inquiries, contact legal@carecostestimate.com.