Rules and Regulations Affecting Revenue

FOR PRACTICES managing diverse patient populations covered by a variety of payers, a number of payment rule changes and unknown future federal and state regulations loom ahead.

Code Sets

Code sets aren’t static one-time creations; they often go through numerous updates and revisions. As living documents, they must continually be incorporated into healthcare practices’ multiple electronic or computerized systems. Through its MedLearn Matters publications, software downloads and revenue cycle financial systems, the Centers for Medicare and Medicaid Services (CMS) conveys this information automatically at no cost. Following are some recent small changes to reimbursement that can have significant revenue implications for healthcare practices:

April 1, 2022: The Centers for Disease Control and Prevention (CDC) implemented three new ICD-10-CM diagnosis codes for reporting COVID-19 vaccination status: Z28.310 (unvaccinated for COVID-19 nonCC 23 95); Z28.311 (partially vaccinated for COVID-19 nonCC 23 951); and Z28.39 (other underimmunization status nonCC 23 95). Consequently, it is important for healthcare to determine which of the many computerized and tracking systems are affected by these new or changed codes.

April 1, 2022: CMS implemented seven new ICD-10-PCS procedure codes to describe the introduction or infusion of therapeutics, including vaccines for COVID-19 treatment (Table). Medicare pays for inpatient COVID-19 vaccines and their administration separately from the diagnosis-related group rate. Therefore, a mechanism must be in place to ensure claims for these separate payments are processed correctly.

A cascade of activities are related to adding new drugs to financial systems regardless of formulary status. As quickly as possible, facilities should add them to the drug master files with applicable Healthcare Common Procedure Coding System (HCPCS) codes and National Drug Code numbers, as well as create a billing unit crosswalk. A charge description master entry and link are also essential. In addition, prior authorization and other payer requirements need to be noted/linked, as well as appropriate drug administration codes.

Jan. 7, 2022: CMS created a new HCPCS code for Veklury (HCPCS code J0248; long descriptor: injection, remdesivir, 1 mg; short descriptor: injection, remdesivir, 1 mg), an antiviral medication, when administered in an outpatient setting that can be used by all payers for dates of service on or after Dec. 23, 2021. This drug is a classic example of revenue generated from drug administration fees. With 2021 sales of $5.6 billion, it had the largest drug spend.

According to Novitas, a Medicare Administrative Contractor that provides administrative services for government-sponsored healthcare programs, when billing for monoclonal antibody (mAb) infusions, the beneficiary coinsurance and deductible will be waived. When mAb doses are provided by the government without charge, facilities must bill for the drug along with the administration, with the billed amount as $0.01. And, while infusion claims for Medicare Advantage (MA) plan patients were submitted to original Medicare for 2020 and 2021, effective Jan. 1, 2022, they must be billed to the MA plan.

Billing for Injectable Drugs in the Outpatient Setting

Although under the outpatient prospective payment system, reimbursement for the Part B/medical drug products may be decreased or incorporated into a bundled or packaged payment (or even provided free of charge), drug administration payments may cover some of the costs of required products and supplies. This may also be true for reimbursement from private insurers. Drug administration reimbursed as a bundled payment involves both nursing and pharmacy, and includes use of local anesthesia, starting the IV, accessing the IV, catheter or port, routine tubing, syringe, preparation of drug, flushing at completion and hydration fluid. To ensure reimbursement, data must be captured related to drug administration with the requisite charting to substantiate the charges.

Injectable drugs can arrive at a facility in a variety of different ways from a variety of sources when they are purchased or when obtained at no cost:

• Shipped directly to the facility from a specialty pharmacy for a specific patient

• Shipped directly to the facility for a specific patient or a group of patients as patient assistance drugs or government supplied drugs

• Brought to the facility by the patient to allow continuance of a specific regimen of a biologic or immunologic or other specialty product

Regardless of how they are received, when a drug is zero-priced, the facility/ physician should bill the HCPCS code for the drug administered with the correct quantity (according to the dose per unit specified in HCPCS) and a zero charge.

The Waste REFUND Act

The Infrastructure Investment and Jobs Act (H.R.3684), which passed on Nov. 15, 2021, includes a drug waste provision from the Recovering Excessive Funds for Unused and Needless Drugs (REFUND) Act that requires manufacturers to rebate the amount wasted back to CMS effective Jan. 1, 2023.

The bill requires drug companies and manufacturers to reimburse Medicare for certain wasted medications, specifically leftover portions of drugs packaged in single-dose containers or single-use packages payable under Medicare Part B. Exclusions to this are 1) drugs or biologicals that are either a radiopharmaceutical or imaging agent; 2) drugs or biologicals approved by the U.S. Food and Drug Administration (FDA) for which dosage and administration instructions included in the labeling require filtration during the drug preparation process prior to dilution and administration, and that require any unused portion of such drugs after the filtration process be discarded; or 3) drugs or biologicals approved by FDA on or after the date of enactment of the bill and for which payment has been made for fewer than 18 months.

Further provisions require the U.S. Department of Health and Human Services (HHS) to aggregate the total amount of discarded Part B drugs quarterly using Medicare Part B claims, and to calculate refunds using average sales price (ASP) or wholesale acquisition cost if ASP isn’t available. Drug manufacturers are required to provide a rebate to HHS for the total amount of discarded medication recorded, above a 10 percent low-volume threshold. Noncompliance to provide a timely rebate could incur civil monetary penalties under the Act.

Compliance audits are intended to rule out fraud. These audits could include manufacturer’s compliance, accuracy of aggregated amount calculated, comparisons of billed doses and billed wastage with the number of units sold, or any other methods of determining data accuracy.

Medicare created billing for expensive waste in the OPPS shortly after switching to “billing units representing actual dose given” for reimbursement and away from the “whole vial” method of billing. While Medicare does not mandate billing for waste, it makes it possible to recoup lost dollars if a facility chooses to bill for it. To determine whether a drug can be billed for waste, answer these four questions: 1) Is the drug being used for a Medicare outpatient? 2) Is it a single-dose vial/package? 3) Does the product have an HCPCS code? 4) Does the product have a status indicator G or K designation? Only if the answer is yes to these questions can the facility bill for waste. If the answer is no, then it cannot bill.

Of course, it’s important to avoid creating an auto bill situation that doesn’t represent true actions. For example, if the vial contains 1 gram of the drug, and the infusion center uses 500 mg for each of two patients, nothing is wasted. But without carefully building this calculation into the system, the revenue cycle could assume two vials had been used and would erroneously process two waste charges, which is fraud.

Zero-priced products (patient assistance and white bag/specialty pharmacy drugs) don’t qualify for waste billing since there is no charge for these products. Staff must understand the difference, know when a zero-priced product is being used and use the correct line item on the order entry.