Pharmacy Compliance Question of the Week
Archive
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August 30, 2010
Question:
I am not familiar with the accreditation requirement for pharmacies. Where can I find out more?
Answer:
The Medicare Modernization Act of 2003 (MMA) added a new paragraph to the Social Security Act requiring the Secretary of the Department of Health & Human Services (HHS) to establish and implement quality standards for suppliers of DMEPOS. Suppliers that furnish the following items or services must comply with the quality standards in order to receive Medicare Part B payments and to retain Medicare billing privileges.
• Durable medical equipment (DME);
• Medical supplies;
• Home dialysis supplies and equipment;
• Therapeutic shoes;
• Parenteral and enteral nutrient, equipment and supplies;
• Transfusion medicine; and
• Prosthetic devices, prosthetics, and orthotics.
However, as stated last week in the answer to the question, not all pharmacies must be accredited. For more details, see Transmittal 346PI at http://www.cms.gov/transmittals/downloads/R346PI.pdf.
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August 23, 2010
Question:
Must all pharmacies be accredited by next year?
Answer:
No, all pharmacies are not required to submit evidence to the Secretary of the Department of Health and Human Services (HHS) by January 1, 2011, that they meet the accreditation standards. That’s the word from the Centers for Medicare & Medicaid Services (CMS) in transmittal R346PI (issued June 25).
Exceptions will be made for certain pharmacies if they meet five specific requirements. Here’s one of those as an example: if the total billings for specific items and services are less than 5 percent of total pharmacy sales for the previous three calendar years, three fiscal years, or other yearly period specified by CMS.
For more on this topic, go to http://www.cms.gov/Transmittals/downloads/R346PI.pdf for the transmittal.
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August 16, 2010
Question:
I heard that inpatient drugs are now included in the 340B Drug Pricing Program for DSH facilities?
Answer:
According to CMS, this is not correct. It is important to note that the 340B program can only be used for purchases of outpatient drugs and this continues to be the case. However, under the new Medicare law, disproportionate share hospitals (DSHs) participating in the 340B program now have their inpatient drug purchases excluded from the Medicaid "best price" calculation. DSHs still cannot purchase their inpatient drugs under the 340B program, but drug manufacturers now have more incentive to choose to provide discounts on these drugs to participating 340B DSHs.
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August 9, 2010
Question:
Can critical access hospitals participate in the 340B program?
Answer:
Section 7101 of the Patient Protection and Affordable Care Act (PPACA) expanded the Section 340B Drug Pricing Program (340B Program) to certain critical access hospitals, freestanding cancer hospitals, rural referral centers, sole community hospitals, and children's hospitals. The amendment took effect on January 1, 2010. Check this web site for more information on the program: http://www.cms.gov/MedicaidDrugRebateProgram/.
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August 2, 2010
Question:
My comment relates to the July 19 answer to the pharmacy question related to incident-to and self-administered drugs.
I believe your answer to the question of reimbursement for drugs furnished incident to a physician's services implies something contrary to the regulations. The first statement in the answer might be read to mean that the determination of coverage is individual-based. (“…if the patients who take them usually do not self-administer them). While the balance of the answer appears to be correct, I believe a clarification is warranted about this phrase. Changes identified in the cited transmittal do not impact the concept of "usually self-administered." I think that a clarification that it is "patients as a whole" would be very helpful to your subscribers.
Answer:
The Medicare Benefit Policy Manual, Chapter 15 (Covered Medical and Other Health Services), section 50.2 (Determining Self-Administration of Drug or Biological) explains that the program covers drugs that are furnished “incident to” a physician’s service provided that the drugs are not usually self-administered by the patients who take them. Paragraph C defines "usually self-administered," and the term “usually'” means that “if a drug is self-administered by more than 50 percent of Medicare beneficiaries, the drug is excluded from coverage and the contractor may not make any Medicare payment for it. In arriving at a single determination as to whether a drug is usually self-administered, contractors should make a separate determination for each indication for a drug as to whether that drug is usually self-administered.”
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July 26, 2010
Question:
Last week’s question related to incident-to and self-administered drugs. Can you provide more information about how CMS defines “self-administered”?
Answer:
In transmittal R123BP (April 30, 2010), the Centers for Medicare & Medicaid Services (CMS) furnished Medicare contractors with updates to the Medicare Benefit Policy Manual relating to determining self-administration of drug or biological. In that transmittal, CMS explains that the update allows for other routes of administration besides injections to be considered as not usually self-administered. Below is a direct quote from the related provider-information memo MM6950.
“The Medicare program covers drugs that are furnished ‘incident to’ a physician’s service provided that the drugs are not usually self-administered by the patients who take them. … The term “administered” refers only to the physical process by which the drug enters the patient’s body. It does not refer to whether the process is supervised by a medical professional (for example, to observe proper technique or side-effects of the drug). Injectable drugs, including intravenously administered drugs, are typically eligible for inclusion under the ‘incident to’ benefit. With limited exceptions, other routes of administration (including, but not limited to, oral drugs, suppositories, and topical medications) are considered to be usually self-administered by the patient.”
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July 19, 2010
Question:
Does Medicare reimburse drugs furnished “incident to” a physician’s service?
Answer:
Yes, if the patients who take them usually do not self-administer them. Generally, injectable drugs, including intravenously administered drugs, are eligible for coverage under the incident-to benefit. The latest update (which becomes effective on July 30, 2010) issued by the Centers for Medicare & Medicaid Services (CMS) allows for other administration routes in addition to injections to be considered as not usually self-administered, including, but not limited to, oral drugs, suppositories, and topical medications. Fiscal intermediaries and Medicare administrative contractors (MACs) make the call on whether a drug is usually self-administered and does not meet the incident-to benefit category, but CMS requires them to post on their web sites the processes used to make such a determination. They also must post a list of drugs that are subject to the self-administered exclusion. For more on this, see CMS’s official instructions at www.cms.gov/Transmittals/downloads/R123BP.pdf.
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July 12, 2010
Question:
Your reply to the question concerning modifier JW is questionable. When MLN Matters published their article stating that all providers must use modifier JW, I contacted our Medicare Regional Office for clarification, as the CMS TR 1962 said that Contractors "may" require the use of modifier JW when processing claims for drugs and biologicals (except those provided under the CAP Program) to identify drug waste. After checking with the Central Office, our Regional Office advised me that the word "may" means that the Contractor can impose the "JW" requirement if they want to, but that the use of "JW" is not mandatory. Can you please explain your reply stating that the use is mandatory effective July 30, 2010?
Answer:
The answer did not say it was mandatory but you are correct that the answer was written in a misleading way. In the first line under the background section of MM6711, CMS writes, “As a reminder, your Medicare contractor may require its providers to use the JW modifier.” So the answer is that you may use the modifier JW on July 30 and after, and you should definitely check with your own Medicare payer to see if it is required.
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July 5, 2010
Question:
When does the requirement to use the modifier JW take effect?
Answer:
On July 30, this new billing instruction takes effect. In MLN Matters Number MM6711 and Transmittal R1962CP, the Centers for Medicare & Medicaid Services (CMS) reminded all healthcare professionals who administer and supply drugs and biologicals as well as Medicare contractors that pay for them about use of modifier JW. Although this information was issued previously, CMS revised the announcement on May 21 to clarify that Medicare contractors may require that this modifier be used.
This information can be found at http://www.cms.gov/Transmittals/downloads/R1962CP.pdf and http://www.cms.gov/MLNMattersArticles/downloads/MM6711.pdf.
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June 28, 2010
Question:
The June 14 answer addressed the topic of oxaliplatin and incorrect unit billing. Could you provide guidelines for proper billing?
Answer:
First, be sure that your hospital chargemaster is up-to-date, with attention to quantity specifications in drug code long descriptors. Staff should be educated on a regular basis about coding changes and current Medicare billing guidance to ensure that the units billed correspond to units administered.
Medicare rules define service units as “the number of times the service or procedure being reported was performed.” Here are two examples of correct unit assignment for codes that describe a 5-mg injection of oxaliplatin:
- Code C9205 was effective for services performed from 2003 through 2005. If a patient received 5 mg of oxaliplatin during this period, the hospital would bill for one service unit.
- Code J9263 is effective for dates of service on or after 2006. If a patient received 100 mg of oxaliplatin, the hospital would bill for 200 service units.
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June 21, 2010
Question:
What should hospital pharmacies be doing to prepare for RACs?
Answer:
Listed below are a few strategies that pharmacy department staff may use
to handle potentially upcoming audits.
- Perform an internal audit.
- Identify high-volume drugs and biologics with high payments.
- Know the local and national coverage determination policies to ensure
medical necessity.
- Find out the specific RAC assigned to your hospital or healthcare system,
and become aware of its planned drug investigations.
- Review your chargemaster to ensure that it includes the correct number
of billing units for drugs (per Medicare instructions).
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June 14, 2010
Question:
You mentioned the drugs that are at the top of the RAC list for overpayments. Were the claims coded wrong or what?
Answer:
In the case of Neulasta, recovery audit contractors (RACs) identified $9.5
million in Medicare overpayments caused by lack of medical necessity in
the records audited. This was just in the states of New York and Florida.
For pharmaceutical infusion services, RACs recovered $2.3 million from 930
cases in New York and California for services deemed to be medically unnecessary.
Incorrect coding was the culprit in pharmaceutical injections, with 18,930
incidents representing $5.8 million.
The problem with oxaliplatin was billing the incorrect number of units.
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June 7, 2010
Question:
What sorts of things are recovery audit contractors looking for in the pharmacy?
Answer:
Pharmaceuticals are expensive and represent a significant portion of patient
charges, so it is an area closely investigated by auditors. To minimize
the burden on providers and maximize the return on investment for the government,
RACs attempt to target claims that are most likely to contain improper payments.
Although there are several others being investigated by RACs, the drugs
below are offering the highest overpayments:
- Neulasta;
- Pharmaceutical infusion services; and
- Oxaliplatin.
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May 31, 2010
Question:
Does the 340B program offer any benefits to hospital pharmacies?
Answer:
Yes, according to the Centers for Medicare & Medicaid Services, it
does. Covered entities receive substantial discounts on covered outpatient
drugs. The 340B price is at least as low as the price that state Medicaid
agencies pay. In addition, while the 340B Program sets a ceiling or cap
on the price manufacturers can charge, covered entities may be able to negotiate
additional discounts.
According to CMS, surveys of 340B Program participants indicate high satisfaction
with the 340B Program, and participants frequently report paying 30 percent
less than the covered entity otherwise would have paid for covered pharmaceuticals.
Other studies have reported that the 340B Program price for pharmaceuticals
may be 25 percent to 50 percent less than the average wholesale price (AWP).
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May 24, 2010
Question:
What is the section 340B program?
Answer:
This federally mandated drug-pricing program requires pharmaceutical manufacturers that participate in the Medicaid program to provide front-end discounts on covered outpatient drugs purchased by certain "covered entities."
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May 17, 2010
Question:
When will CMS reimburse physicians, providers and suppliers for the amount of a drug or biological administered?
Answer:
Section 100.2.9 of the Medicare Claims Processing Manual indicated that
the Centers for Medicare & Medicaid Services (CMS) will reimburse physicians,
providers and suppliers for the amount of a drug or biological administered
(and for the amount discarded) when the following is true:
- The participating competitive acquisition program (CAP) physician has
made a good-faith effort to minimize the unused portion of the CAP drug
or biological in scheduling patients and in ordering, accepting, storing
and using the drug or biological; and
- In its process of supplying the drug or biological to the participating
CAP physician, the approved CAP vendor has made a good faith effort to minimize
the unused portion of the drug or biological.
See the following references for more on this information:
http://www.cms.hhs.gov/mlnmattersarticles/downloads/MM5520.pdf and
http://www.cms.hhs.gov/transmittals/downloads/R1248CP.pdf.
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May 10, 2010
Question:
I work at an outpatient pharmacy and have a question regarding when we bill J7507. It is billed per 1mg, but we dispense three different strengths (0.5 mg, 1 mg, and 5 mg capsules). Often, patients are on at least two of the strengths. We bill the claims separately, but generally on the same day. I think because they are the same J code and the same day, one will be paid, while the other denied as a duplicate. This occurs even when the quantities are different. How can we avoid this?
Answer:
I think that the situation you describe can be resolved by submitting a
single claim for the same date of service. I am curious why you bill two
separate claims for the same date of services? Because the HCPCS code is
billed in 1mg increments, you would report the total number of mg dosed
to the patient on a single claim form line next to the HCPCS code J2507.
So if a patient receives a 5 mg and a 0.5 mg capsule on the same date of
service, you would report the drug as follows:
HCPCS ---- Quantity
J2507 ---------- 6
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May 3, 2010
Question:
If several pharmacies, each with their own NPI, are owned by the same covered organization, may the X12 835 payment and remittance advice for these pharmacies be consolidated and sent to the covered organization health care provider?
Answer:
According to the Centers for Medicare & Medicaid Services (CMS), payment and remittances for multiple pharmacies, each with their own NPIs, may be consolidated when the receiving entity (payee) shares the same taxpayer identification number (TIN) as those pharmacies. The pharmacies are subparts of the payee. In order for the payment and remittance to be consolidated, the payee identification at the header level must be the NPI of the entity designated to receive the payment. It is important to note that while the consolidation of remittances is technically feasible this fact does not obligate a payer to execute such consolidation. CMS says this is a business decision and contract issue to be negotiated between trading partners.
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April 26, 2010
Question:
How do I know whether to use the National Drug Code (NDC), the Healthcare Common Procedural Coding System (HCPCS), or another code set when reporting drugs and biologics on HIPAA transactions?
Answer:
The final rule adopting changes to the HIPAA Electronic Transactions and Code Set standards published in the Federal Register on February 20, 2003, does not adopt a standard for reporting drugs and biologics in HIPAA transactions other than those for retail pharmacies. Therefore, it permits the use of any code set to meet business needs. In the absence of an adopted code set for drugs and biologics, the X12 implementation guides adopted as HIPAA standards must be consulted. If you currently use HCPCS to report drugs and biologics you may continue to do so. You may also use the NDC code set if you meet the conditions for use in the implementation guide. The NDC code set must be used for reporting drugs and biologics on retail pharmacy transactions.
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April 19, 2010
Question:
I work at an outpatient pharmacy and have a question regarding billing J7507, which is billed per 1 mg. We dispense three different strengths (0.5 mg, 1 mg, and 5 mg capsules). Often, patients are on at least two of the strengths. We bill the claims separately but, generally, on the same day. I think because they are the same J code and on the same day, one will be paid, while the other denied as a duplicate. This occurs even when the quantities are different. How can we avoid this?
Answer:
We are not sure why you bill two separate claims for the same DOS, but the situation you describe probably could be resolved by submitting a single claim for the same date of service. Because the code is billed in 1 mg increments, you should report the total number of milligrams dosed to the patient on a single claim form line next to the code J7507. So, if a patient receives a 5 mg and a 0.5 mg capsule on the same DOS, you would report code J7507 with a quantity of 6.
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April 12, 2010
Question:
Last week you answered a question about high-dose interleukin and use of code 00.15. Can this code also be assigned for low-dose?
Answer:
No, code 00.15 cannot be assigned for low-dose IL-2 cases. Code 99.28 (injection or infusion of biological response modifier [BRM] as an antineoplastic agent) is the correct procedure code for low-dose IL-2 therapy.
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April 5, 2010
Question:
My question relates to high-dose interleukin. When can procedure code 00.15 be assigned and to what related MS-DRGs?
Answer:
Effective October 1, 2007, procedure code 00.15 (high-dose infusion of
IL-2) is assigned
to either:
- MS-DRG 837 (chemotherapy with acute leukemia as secondary diagnosis or
with high-dose chemotherapeutic agent with MCC); or
- MS-DRG 838 (chemotherapy with acute leukemia as secondary diagnosis with
CC or high-dose chemotherapeutic agent).
For the correct use of procedure code 00.15, the medical record must contain
the following documentation:
- Bolus infusions given over no more than 30 minutes at a dose of no less
than 600,000 IU/kg (weight-adjusted);
- Placement and utilization of a central line;
- Administration in a hospital setting under the supervision of a qualified
physician experienced in the use of anticancer agents with an intensive
care facility and specialists skilled in cardiopulmonary or intensive care
medicine available; and
- A planned five-day treatment protocol.
More information about the above can be found at http://www.cms.hhs.gov/AcuteInpatientPPS/downloads/CMS-1533-FC.pdf.
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March 29, 2010
Question:
When the FDA identifies a "serious adverse drug event," what does this mean? Is there a list of drugs that are classified this way?
Answer:
Adverse drug events are considered to be serious when certain negative outcomes occur that require some type of intervention. These outcomes include any events that result in death, permanent disability, birth defects, hospitalization, or any other medically significant consequences.
On February 25, 2010, the Institute for Safe Medications Practices (ISMP) released its quarterly report, called QuarterWatch, which contains reports of serious adverse drug events received by the U.S. Food & Drug Administration (FDA) during the first three quarters of 2009. Rosiglitazone (avandia) headed this list with 1,218 reports. Quetiapine (seroquel) was next with 977 reports.
For this report, go to http://www.ismp.org/Newsletters/acutecare/articles/20100225.asp.
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March 22, 2010
Question:
In regard to code J2505, is it correct to bill for the total number of mg?
Answer:
Claims for J2505-injection, pegfilgrastim, 6 mg-should be submitted so that the units billed represent the number of multiples of 6 mg administered, not the total number of mgs.
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March 15, 2010
Question:
What is the correct coding for adenosine in regard to dose and units billed? This is for a hospital outpatient service.
Answer:
Adenosine represents 30 mg per unit, and one unit for every 30 mg should be billed per patient per date of service.
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March 8, 2010
Question:
Are any quality standards available related to individually prepared medications?
Answer:
The U.S. Pharmacopeial Convention (USP) recently proposed new and revised quality guidelines for pharmacists who compound or individually prepare medications. Although USP has long had such standards, it is now proposing updates and new content for General Chapter Quality Assurance in Pharmaceutical Compounding <1163>.
Entirely new content includes the following sections:
- Training;
- Physical testing of dosage units;
- Weight and volume assessment;
- Cleaning and disinfecting;
- Containers, packaging, repackaging and storage; and
- Outsourcing.
For information on the above, go to http://www.usp.org/USPNF/pf/1163comments.html.
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March 1, 2010
Question:
I am looking for the appropriate medical necessity documentation for J1441- filgrastim injection, 480 mcg. Can you help?
Answer:
You will need to check the local coverage determination (LCD) for your Medicare payer to determine the requirements for this code.
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February 22, 2010
Question:
Is it too late to submit an application for DME accreditation?
Answer:
In an e-mail dated December 28, 2009, CMS announced that it would continue to process durable medical equipment (DME) accreditation determinations for pharmacies after the January 1, 2010 effective date. As suppliers of DME to Medicare beneficiaries, pharmacies must be accredited by a CMS-approved accreditation organization. CMS encourages pharmacies to complete their accreditation applications as soon as possible.
For more information, visit the DME accreditation page on CMS's website at www.cms.hhs.gov/MedicareProviderSupEnroll/DMEPOS_DeemedAccreditationOrganizations.asp.
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February 15, 2010
Question:
What is the limited income NET program?
Answer:
Effective January 1, 2010, the Centers for Medicare & Medicaid Services (CMS) replaced the existing point-of-sale facilitated enrollment (POS FE) process with the Limited Income Newly Eligible Transition Program, which Humana will administer.
The point of this new program is to provide immediate-need Part D prescription drug coverage to Medicare beneficiaries who are eligible for limited income subsidies (LIS) and who are not yet enrolled in a Part D plan. Another point is to provide retroactive coverage for new dual- eligible beneficiaries.
All of the details you need about this program can be found at http://www.humana.com/pharmacists/resources/li_net.asp, including a document that includes "four steps for pharmacy providers."
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February 8, 2010
Question:
How does Medicare pay for code J7185--injection, factor viii (antihemophilic factor, recombinant) (Xyntha), per IU?
Answer:
In the hospital outpatient prospective payment system, this code has a status indicator of K-nonpass-through drugs and nonimplantable biologicals, including therapeutic radiopharmaceuticals. It receives a separate rate of $1.07 under the OPPS.
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February 1, 2010
Question:
Can you provide any billing guidelines for new code G9143 for pharmacogenomic testing under qualifying clinical trails?
Answer:
Everything you need to know can be found in provider-information memo MM6715
at http://www.cms.hhs.gov/MLNMattersArticles/downloads/MM6715.pdf.
The following elements must be used on claims submitted:
- Value code D4 and an eight-digit clinical trial number (when present on
claim);
- ICD-9 diagnosis code V70.7 (examination of participant in clinical trial);
- Condition code 30;
- HCPCS modifier Q0 (for outpatient claims only); and
- HCPCS code G9143
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January 25, 2010
Question:
What code should be assigned for the Medicare coverage of warfarin in clinical trials?
Answer:
To enable the implementation of pharmacogenomic testing under qualifying
clinical trials, the Centers for Medicare & Medicaid Services (CMS)
recently announced the creation of the new temporary HCPCS Level II code
below. Note that Medicare only will cover this once in a lifetime unless
there is a reason to believe that the patient's personal genetic characteristics
would change over time.
G9143 Warfarin responsiveness testing by genetic technique using any method, any number of specimen(s)
For additional coverage and billing information, go to Transmittal 111 at http://www.cms.hhs.gov/Transmittals/downloads/R111NCD.pdf.
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January 18, 2010
Question:
I understand Reclast will no longer be a pass through medication starting Jan 1, 2009. How will this impact reimbursement?
Answer:
Non-pass through drugs will be paid at the average sales price (ASP) plus 4 percent. The hospital outpatient payment for Reclast (zoledronic acid), HCPCS code J3488, will be $218.59 per 1 mg.
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January 11, 2010
Question:
How will Medicare pay for nonpass-through drugs in 2010?
Answer:
In 2010, Medicare payment for nonpass-through drugs, biologicals and therapeutic radiopharmaceuticals will be made at a single rate of average sales price (ASP) + 4 percent, which provides payment for the associated acquisition and pharmacy overhead costs. If ASP data are not available, payment will be based upon mean unit cost from hospital claims data.
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December 28, 2009
Question:
A colleague mentioned that the government issued safety warnings about Tamiflu. Where can I find this information?
Answer:
During October, the Food and Drug Administration (FDA) issued several health
alerts about Tamiflu® (oseltamivir phosphate). They covered the following
topics:
- Dosing instructions and dispenser for oral suspension;
- Expired products; and
- Pediatric patients one year and less.
For these alerts, go to http://www.fda.gov/Safety/MedWatch/SafetyInformation/default.htm,
2009, Tamiflu.
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December 21, 2009
Question:
What are the quality measures that hospital pharmacies must report to get the update factor for the OPPS?
Answer:
Hospitals that reported on the 11 quality measures in 2009 will receive
an inflation update of 2.1 percent in their payment rates for services furnished
to Medicare beneficiaries in outpatient departments. The quality measures
include the following that relate to pharmacy services:
- OP-4: Aspirin on arrival in emergency department
- OP-6: Timing of antibiotic prophylaxis for surgery patients
- OP-7: Prophylactic antibiotic selection for surgery patients
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December 14, 2009
Question:
Can you tell me which pharmacy level II codes were deleted for 2010?
Answer:
The following codes have been deleted for 2010:
C9247 Iodine I-123 iobenguane, diagnostic, per study dose, up to 15 millicuries
C9249 Injection, certolizumab pegol, 1 mg
C9251 Injection, C1 esterase inhibitor (human), 10 units
C9252 Injection, plerixafor, 1 mg
C9253 Injection, temozolomide, 1 mg
Q2023 Injection, factor viii (antihemophilic factor, recombinant) (Xyntha), per i.u.
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December 7, 2009
Question:
Has the JCAHO published any information related to medication management standards? Specifically, which ones are the most troublesome for hospitals?
Answer:
For 2009, there are two medication management (MM) standards with high percentages of noncompliance. The top issue is medication security. Most medication carts were left in hospital hallways and units (typically not in operating rooms) instead of secure areas (such as on the floor or a locked room) or under constant surveillance.
Also, the Joint Commission stated that it has seen a jump in medication-ordering noncompliance. For example, organizations did not implement their own policies, such as those needed to clarify unclear, illegible, and incomplete orders, and there was an inconsistency in the pharmacist's review of medication orders, especially those related to noncontrast radiopharmaceuticals.
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November 30, 2009
Question:
Are hospitals required to comply with the USP's revised chapter 797?
Answer:
No, the Joint Commission does not currently and will not in 2010 survey against U.S. Pharmacopeia's (USP) revised Chapter 797. The Joint Commission does require hospitals to evaluate their systems against the most current 797 requirements and develop an implementation plan for any changes that the organization deems are necessary, however.
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November 16, 2009
Question:
Do hospitals still have to report NDCs for Medicaid patients?
Answer:
In August 2009, Safety Net Hospitals for Pharmaceutical Access (SNHPA)
and University Medical Center of Southern Nevada won a law suit against
the Centers for Medicare & Medicaid Services (CMS). This is good news
because the lawsuit reverses the implementation of a July 2007 federal regulation
requiring hospitals to report national drug codes (NDCs) on Medicaid claims
for physician-administered outpatient drugs. The only stipulation is that
the drugs must not be billed for more than their purchasing cost, as defined
by each state's Medicaid plan. Be sure to contact Medicaid in your state
to confirm implementation plans.
For more on this, go to
http://www.snhpa.org/public/documents/news_release_10_8_09.cfm.
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November 9, 2009
Question:
My question is a follow-up to last week's answer about ESAs used in renal dialysis facilities. Can you provide more information about this study?
Answer:
Recently, the Food & Drug Administration approved revised labeling for ESAs, including a black-box warning recommending that they be dosed to maintain a hemoglobin value of less than 12 g/dL. According to the revised label, maintaining levels above this can adversely affect a patient's health, possibly resulting in death. There are concerns that facilities may be using dosing guidelines, standards and protocols that are not consistent with the revised recommendations. The OIG is investigating to what extent this is occurring.
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November 2, 2009
Question:
Is the OIG still studying renal dialysis facilities and dosing of ESAs?
Answer:
Yes, this project is again on the Department of Health & Human Services Office of Inspector General (OIG) work plan for next year. It will review whether protocols used by renal dialysis facilities for ESAs adhered to FDA labeling recommendations.
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October 26, 2009
Question:
I know that CMS updates the average sales price (ASP) every quarter, but I would like to know whether prices actually increase or decrease each quarter.
Answer:
As an example, the Centers for Medicare & Medicaid Services (CMS) states on its web site that a comparison of fourth-quarter payments with third-quarter reveals that "for the most part" average drug prices in the market remain stable. On average, prices for the top Part B drugs increased by less than 1 percent. For most of the higher volume drugs (34 out of the top 50), the prices changed 2 percent or less. Overall, the prices for 32 of the top 50 drugs increased, while six remained the same.
For the fourth quarter ASPs go to:
http://www.cms.hhs.gov/McrPartBDrugAvgSalesPrice/01a1_2009aspfiles.asp.
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October 19, 2009
Question:
How does CMS calculate the average sales price (ASP)-based payment limit?
Answer:
Here's the explanation CMS gave on its web site.
For each billing code, CMS calculates a weighted average sales price (ASP) using data submitted by manufacturers who 1) submit ASP data at the 11-digit national drug code (NDC) level and 2) the number of units of the 11-digit NDC sold and the ASP for those units. The number of billing units in an NDC is determined by the amount of drug in the package.
For example, a manufacturer sells a box of four vials of a drug. Each vial contains 20 milligrams (mg). The billing code is per 10 mg. The number of billing units in this NDC for this billing code is 4 vials (X 20 mg)/10 mg=8 billable units.
Beginning April 1, 2008, CMS uses the following weighting methodology to
determine the payment limit:
- Sums the product of the manufacturer's ASP and the number of units of
the 11-digit NDC sold for each NDC assigned to the billing and payment code,
and then divide this total by the sum of the product of the number of units
of the 11-digit NDC sold and the number of billing units in that NDC for
each NDC assigned to the billing and payment code.
- Weight the ASP for an NDC by the number of billing units sold for that
NDC.
For more on this, go to https://questions.cms.hhs.gov/cgi-bin/cmshhs.cfg/php/enduser/std_adp.php?p_faqid=4758.
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October 12, 2009
Question:
I believe the answer to the October 5 pharmacy question is incomplete in terms of how hospital outpatient infusion centers are paid. Could you please review it and comment?
Answer:
You are correct, and we appreciate your input. We have revised the answer to the October 5 question, and a more comprehensive explanation can be found under that posting.
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October 5, 2009
Question:
How do hospital outpatient infusion centers get reimbursed by CMS presently? Is it by AWP, ASP or AMP?
Answer:
To determine your payment for pharmaceuticals used in hospital-based infusion centers, check the most current version of Addendum B of the outpatient prospective payment system (OPPS) (http://www.cms.hhs.gov/HospitalOutpatientPPS/AU/list.asp#TopOfPage). Find the HCPCS Level II code in the first column, and identify the status indicator (SI) in the column to the right.
You will find several different SIs listed for pharmaceuticals in this addendum, and each one has a different payment method. In fact, in the 2009 version of Addendum B, there are at least six different SIs listed for pharmaceuticals.
- Drugs assigned to three of the SIs (A, B and E) are not paid under the
OPPS.
- Drugs with an SI of G (pass-through drugs and biologicals) receive a separate
APC payment that includes a pass-through payment amount. Payment for pass-through
status is currently made at the physician’s office payment rate of
the average sales price (ASP) + 6 percent—a payment proposed again
for 2010. If the ASP data is not available, payment would be the wholesale
acquisition cost (WAC) + 6 percent. If the WAC is not available, payment
would be based on 95 percent of the product’s most recently published
AWP.
- Drugs with an SI of K (nonpass-through drugs and biologicals) are paid
under OPPS and receive a separate payment amount.
- Drugs assigned an SI of N (items or services packaged into APC rates)
are paid under the OPPS, but their payment is packaged into payment for
other services. In other words, there is no separate payment.
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September 28, 2009
Question:
Did CMS issue a recent decision about coverage of warfarin?
Answer:
Last year, the Centers for Medicare & Medicaid Services (CMS) opened
a national coverage analysis (NCA) to investigate the medical necessity
of pharmacogenomic testing for warfarin (commonly marketed as Coumadin®).
In August, CMS issued a final decision stating that the available evidence
does not demonstrate that pharmacogenomic testing to predict warfarin responsiveness
improves health outcomes. Thus, the agency does not consider such testing
reasonable and necessary and will not reimburse for it.
However, CMS will allow reimbursement for pharmacogenomic testing to predict
warfarin responsiveness under the Coverage with Evidence Development (CED)
provision of the Social Security Act. This means subjects enrolled in clinical
studies that meet certain scientific standards outlined in the agency's
decision memo will receive coverage under Medicare. CMS specifies that qualifying
studies would determine the frequency and severity of adverse outcomes in
patients that received testing compared with those who did not.
For CMS's decision memo, go to https://www.cms.hhs.gov/mcd/viewdecisionmemo.asp?from2=viewdecisionmemo.asp&id=224&.
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September 21, 2009
Question:
My question relates to the use of NDCs in 837 I billing. Are providers required to submit quantities when using these codes?
Answer:
Medicare hospitals subject to the OPPS report drugs that have been approved by the Food and Drug Administration (FDA), but that do not yet have a product-specific drug/biological HCPCS code, using HCPCS code C9399. In transmittal 188 (May 28, 2004), the Centers for Medicare & Medicaid Services (CMS) provided the instructions to Medicare providers and claims processors about this. CMS recently issued Transmittal 446, which builds upon this instruction and clarifies the use of national drug codes (NDCs) in 837 I billing.
Effective July 1, 2009, hospitals billing for drugs/biologicals that have received FDA approval but that have not yet received product-specific drug/biological HCPCS codes shall not only specify the NDC of the drug/biological, but shall also specify the quantity of that drug/biological using the CTP segment in the ANSI X-12 837 I.
In addition, Medicare contractors must allow decimals in the specification of quantity. The CMS is aware that most drug/biological pricing is performed using whole numbers. However, it is necessary for the Medicare system and contractors to accept decimals in the quantity field for the drug, store this information in the repository, and forward it to a subsequent payer. The companion guide to the 837 I will be updated after issuance of this CR.
Transmittal 446 is available for download at http://www.cms.hhs.gov/transmittals/downloads/R446OTN.pdf.
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September 14, 2009
Question:
Is there any information from Medicare regarding the H1N1 virus?
Answer:
The Centers for Medicare & Medicaid Services (CMS) have created two
new Level II HCPCS codes with an effective date of September 1. As shown
below, one code describes the vaccine and the other describes its administration.
G9142 Influenza A (H1N1) vaccine, any route of administration
G9141 Influenza A (H1N1) immunization administration (includes the physician
counseling the patient/family)
Under the hospital outpatient prospective payment system (OPPS), no Medicare payment will be available for code G9142 when it is submitted on an outpatient bill type because CMS anticipates that providers will receive the vaccine at no cost.
Medicare will pay $24.89 (for 2009) per visit to providers who administer the vaccine, even when the vaccine is free. Providers should report one unit of code G9141 for each administration. Beneficiary copayment and deductible (for both OPPS and non OPPS providers) do not apply to this code.
For the above information, go to http://www.cms.hhs.gov/transmittals/downloads/R1803CP.pdf.
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September 7, 2009
Question:
How will drug administration be paid next year under the hospital outpatient prospective payment system?
Answer:
For 2010, the Centers for Medicare & Medicaid Services (CMS) plans to continue using the full set of CPT codes for drug administration under the five-level APC structure. However, it intends to make minor adjustments to the APCs to account for changes in HCPCS code-specific costs. Table 33 of the proposed rule presents the proposed configuration of the five drug administration APCs for 2010. Increases or decreases in reimbursement vary by service.
The proposed 2010 hospital OPPS rule can be found at http://edocket.access.gpo.gov/2009/pdf/E9-15882.pdf.
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August 31, 2009
Question:
We carry meperidine 25 mg, 50 mg, 75 mg, 100 mg and pca 300 mg. J2175 is used to report meperidine per 100 mg. Isn't that for each 100 mg dose and not to used on the lower strengths? Coding is saying Medicare only has one J code, and it is billed for all injections of the drug. Which is correct? Should it read up to 100 mg in the J code description?
Answer:
When assigning a J-code, the only choice is J2175, which would be billable for each separately prepared dose of meperidine of 100 mg or less. For a dose strength that exceeds 100 mg, the appropriate multiple of billable increments is to be applied. Note that if you are required to use an alternate code set for billing Medicaid (such as is required in California when billing to Medi-Cal), there are specific X-codes for the varying strengths mentioned.
For more on this, see the Medicare Claims Processing Manual, Chapter 17-Drugs and Biologicals, Section 70--Claims Processing Requirements -
When the dosage amount is more than the amount indicated for the HCPCS code, the facility should round up to determine units. When the dosage amount is less than the amount indicated for the HCPCS code, use the numeral 1 as the unit of measure.
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August 24, 2009
Question:
What has CMS proposed as the outpatient PPS drug-packaging threshold for next year?
Answer:
Under Medicare, CMS packages the cost of most drugs with their associated procedure, but pays separately for drugs that exceed the annual packaging threshold. CMS proposes raising the packaging threshold in 2010 from $60 (the current threshold) to $65; thus, drugs with per-diem costs of $65 or less will be packaged. For the proposed OPPS rule, go to http://edocket.access.gpo.gov/2009/pdf/E9-15882.pdf.
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August 17, 2009
Question:
On the outpatient side of things, which of the quality measures relate to pharmaceuticals?
Answer:
In order for hospitals to receive the full update in 2010 (now proposed
at 1.9 percent), they must report on 11 quality measures in 2009, including
the following that pertain to pharmacy services:
- OP-4: Aspirin on arrival in ED
- OP-6: Timing of antibiotic prophylaxis for surgery patients
- OP-7: Prophylactic antibiotic selection for surgery patients
Hospitals will receive a 2 percent decrease in their 2010 update if they
fail to report the 11 quality measures to CMS.
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August 10, 2009
Question:
Last week you mentioned the new NCPDP form. Where can I find out more details about this form and the transition?
Answer:
Answers to your questions should be covered by going to the following sites:
- MLN Matters Number SE0904, available at http://www.cms.hhs.gov/mlnmattersarticles/downloads/se0904.pdf.
In addition to information about the pharmacy transaction standard, this
memo from CMS contains information about Version 5010-the health care transaction
standard.
- On its website (http://www.ncpdp.org/news_outreach.asp),
the National Council for Prescription Drug Programs (NCPDP) provides information
about this new standard including links to several archived webcasts (for
purchase) related to it.
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August 3, 2009
Question:
How does the NCPDP Version D.0 differ from the current version 5.1?
Answer:
According to the Centers for Medicare & Medicaid Services (CMS), it features new data elements and rejection codes to facilitate coordination of benefits and Medicare Part D processing. CMS also says that it better identifies patient responsibility, benefits stages, and coverage gaps on secondary claims-and facilitates the billing of multiple ingredients in processing claims for compounded drugs.
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July 27, 2009
Question:
When does the revised NCPDP form (for pharmacy transactions) take effect?
Answer:
Although the effective date for NCPDP Version D.0 is January 1, 2012, the
Centers for Medicare & Medicaid Services (CMS) is advising providers
to begin the transition now from Version 5.1. The first step, says CMS,
is to communicate with your facility's information technology department
and billing or software vendor because implementation will require changes
to software, systems, and perhaps procedures used for billing fee-for-service
Medicare and other non-FFS-Medicare payers.
For more information on this national standard, go to available at: http://www.cms.hhs.gov/mlnmattersarticles/downloads/se0904.pdf.
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July 20, 2009
Question:
Has CMS issued any new drugs with pass-through status lately?
Answer:
The Centers for Medicare & Medicaid Services (CMS) recently announced
that it had given pass-through status to nine drugs and biologicals, effective
July 1. Providers will receive payment for these drugs at a rate of the
average sales price (ASP) + 6 percent. This will be a single payment covering
the product, acquisition and pharmacy overhead costs. The following new
codes will be of interest to pharmacists and pharmacy department managers.
C9251 - Injection, C1 esterase inhibitor (human), 10 units
C9252 - Injection, plerixafor, 1 mg
C9253 - Injection, temozolomide, 1 mg
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July 13, 2009
Question:
Has Medicare issued the latest quarter's ASP prices yet?
Answer:
Yes, the Centers for Medicare & Medicaid Services (CMS) has posted the July 2009 average sales price (ASP) files and crosswalks at: http://www.cms.hhs.gov/McrPartBDrugAvgSalesPrice/01a1_2009aspfiles.asp
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July 6, 2009
Question:
Can you provide examples of cases where a drug is not directly related and integral to a procedure or treatment and would not be considered a packaged supply?
Answer:
Examples include the following:
- Cases where drugs are given to a patient for their continued use at home
after leaving the hospital would not be packaged.
- In the situation where a patient who is receiving an outpatient chemotherapy
treatment develops a headache, any medication for the headache would not
meet the conditions necessary to be treated as a packaged supply.
- In the situation where a patient who is undergoing surgery needs his or
her daily insulin or hypertension medication, the medication would not be
treated as a packaged supply.
Note that drugs treated as supplies should be reported under the revenue
code associated with the cost center under which the hospital accumulates
the costs for the drugs.
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June 29, 2009
Question:
How does CMS determine what drugs are packaged?
Answer:
Certain drugs are so integral to treatments or procedures that they could not be performed without the drug. If a drug is clearly an integral component, it is packaged into the APC of the treatment or procedure as a supply under the hospital outpatient prospective payment system (OPPS) APC. Hospitals may not bill beneficiaries for items whose costs are packaged in this way.
Here are some examples.
- Sedatives administered to patients preoperatively as part of the preparation
for the surgery;
- Eye drops to dilate pupils, anti-inflammatory drops, antibiotic drops,
and ocular hypotensives administered immediately before, during, or immediately
after an ophthalmic procedure;
- Barium or low osmolar contrast media for diagnostic imaging;
- Local anesthetics; and
- Antibiotic ointment placed in wounds or surgical incisions at the completion
of a procedure.
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June 22, 2009
Question:
Are hospitals required to report the HCPCS codes for packaged drugs?
Answer:
No, hospitals are not required to report the HCPCS codes for packaged drugs. However, it is essential that hospitals include the charges for packaged drugs in the charge for the procedure or service for which the drug is used or as a separate drug charge.
This is critical because the costs of the packaged drugs are used for calculating the hospitals outlier and transitional corridor payments and used in the annual update of APC payment rates for the procedures and services with which the drugs are furnished.
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June 15, 2009
Question:
How can hospitals get paid for new drugs that do not yet have a HCPCS code?
Answer:
The Medicare Claims Processing Manual, Chapter 17, Section 90.3, states the following.
Hospitals should assign HCPCS code C9399 (unclassified drug or biological)
when billing a new drug or biological that the U.S. Food & Drug Administration
(FDA) approved on or after January 1, 2004 and for which a product-specific
HCPCS code has not been assigned. The following information must be placed
on the form:
- The National Drug Code (NDC);
- The quantity of the drug administered (expressed in the unit of measure
applicable to the drug or biological); and
- The date the drug was furnished to the beneficiary.
Medicare contractors will manually price the drug or biological at 95 percent of the average wholesale price (AWP). They will pay hospitals 80 percent of the calculated price and will bill beneficiaries 20 percent of the calculated price, after the deductible is met. Drugs and biologicals that are manually priced at 95 percent of AWP are not eligible for outlier payment.
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June 8, 2009
Question:
What procedure should be followed when a patient has a negative reaction to a prescribed drug?
Answer:
At the web site of the U.S. Food & Drug Administration (FDA) (http://www.fda.gov/medwatch/report.htm), you can report "serious adverse events for human medical products, including potential and actual product use errors and product quality problems associated with the use of FDA-regulated drugs; biologics (including human cells, tissues, and cellular and tissue-based products); medical devices (including in vitro diagnostics); and special nutritional products and cosmetics." This web site also contains directions for reporting by phone (1-800-FDA-1088) and by mail.
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June 1, 2009
Question:
Have any new codes been added recently for billing Medicare for drugs and biologicals?
Answer:
In Transmittal R107BP and R1745CP, the Centers for Medicare & Medicaid Services (CMS) issued three new HCPCS codes for reporting drugs and biologicals in the hospital outpatient setting. The effective date for the following codes is July 1, 2009.
Q2023 Injection, factor viii (antihemophilic factor, recombinant) (Xyntha),
per i.u
Q4115 Skin substitute, alloskin, per square centimeter
Q4116 Skin substitute, alloderm, per square centimeter
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May 25, 2009
Question:
When lab work is done and then a hospital dispenses a day or more of take-home drugs for an outpatient, how would this be billed?
Answer:
Paragraph 2 of the Medicare Claims Processing Manual, Chapter 17, §90.4-Hospital Billing for Take-Home Drugs, states the following:
"When beneficiaries come to a hospital outpatient department and have an encounter with a physician or mid-level professional (e.g., a physician assistant or nurse practitioner) during which one or more specimens are collected for laboratory work, treatment is monitored (including anti-cancer drugs, either oral or infused), and a drug is administered, this is considered an outpatient visit. Only when more than a single day's supply of a drug is dispensed to the beneficiary for take home use are the drugs so dispensed to be billed to the appropriate DMERC [durable medical equipment regional carrier]. When only today's drug(s) is (are) dispensed and other services are rendered in conjunction with the treatment, the entire visit is billed by the hospital to the local FI."
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May 18, 2009
Question:
I am in Tennessee, and our hospital is in a very small town. We have no local 24-hour pharmacies available. We send our ED patients home with enough PO meds for a 12-hour period until a local pharmacy is open. Can we receive payment for these drugs?
Answer:
Hospitals dispensing a day or less dose of take-home drugs (non-chemotherapy related) for the patient's convenience or until a retail pharmacy is available would bill the cost of the drug using revenue code 253-take-home drugs. Take-home pharmacy charges are not covered by Medicare and may be billed to the beneficiary after a Medicare denial is received.
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May 11, 2009
Question:
Does the USP have anything to do with hospital accreditation?
Answer:
The Joint Commission does not require hospitals to implement the chapter as a condition of accreditation. However, because the U.S. Pharmacopeia's (USP) national compendium is referenced in the U.S. Food, Drug and Cosmetic Act, its chapters become enforceable by the U.S. Food and Drug Administration (FDA). The FDA defers to states to regulate the practice of pharmacy and to perform inspections, but it retains the authority to inspect pharmacies and enforce USP Chapter <797> in the interest of public health.
Some states have adopted chapter 797 in its entirety while others have incorporated portions of it into their laws and regulations. The Joint Commission will enforce the USP standards if they are part of state law and if the facility is licensed by the state. Also, in a civil court, USP chapters can be brought forward as a standard of care.
For more on USP, go to www.usp.org.
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May 4, 2009
Question:
Where can I find out about pharmacy code changes? And how often can they be changed?
Answer:
The best place for Medicare information and billing guidelines is the web site of the Centers for Medicare & Medicaid Services. You may go to the Pharmacist Center (http://www.cms.hhs.gov/center/pharmacist.asp) and sign-up for e-mail notifications. CMS changes the codes whenever they need to be changed and that will usually be announced in transmittals you receive through the email notifications.
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April 27, 2009
Question:
Does Medicare cover immunosuppressive therapy drugs?
Answer:
Drugs used in immunosuppressive therapy (such as cyclosporine) for a beneficiary who has received a Medicare-covered organ transplant are covered. In the case of a beneficiary who did not receive a Medicare-covered transplant (for example, the beneficiary was too young to be eligible for Medicare), the immunosuppressive drugs would be covered under Part D.
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April 20, 2009
Question:
What is the proper way to code when two or more drugs are mixed together?
Answer:
In Transmittal 1702, the Centers for Medicare & Medicaid Services (CMS) states that if two or more drugs are mixed together to facilitate administration, providers should report the HCPCS code for each drug. It explains as follows: The mixture does not qualify as a "new" drug. Therefore, it is not appropriate to bill HCPCS C9399-unclassified drug or biological, which applies to new, FDA-approved drugs and biologicals that have yet to receive a HCPCS code assignment.
For the transmittal, go to http://www.cms.hhs.gov/transmittals/downloads/R1702CP.pdf.
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April 13, 2009
Question:
What is the proper way to report units to Medicare?
Answer:
Report units in multiples of the units denoted in the HCPCS descriptor. For example, if a patient receives 200 mg of a drug and the HCPCS description of the drug is 50 mg, then you would bill for 4 units.
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April 6, 2009
Question:
Did CMS approve any new pass-through drugs for this quarter?
Answer:
Yes, the Centers for Medicare & Medicaid Services (CMS) granted OPPS pass-through status to the following three drugs and one diagnostic radiopharmaceutical (effective April 1, 2009).
C9247 Iobenguane, I-123, diagnostic, per study dose, up to 10 millicuries
C9249 Injection, certolizumab pegol, 1 mg
J0641 Injection, levoleucovorin calcium, 0.5 mg
J8705 Topotecan, oral, 0.25 mg