Proposed 2019 OPPS Rules

THE LONG-AWAITED proposed 2019 Outpatient Prospective Payment System (OPPS) rules have been published in the Federal Register and will take effect on Jan. 1. As anticipated, the focus is on a patient-driven healthcare system with reimbursement across the episodic care journey rather than on single encounters in a healthcare facility. The proposed payment rule set has several prominent themes for the pharmacy sector: 1) simplify electronic health record requirements, reporting and regulations, 2) cut costs and save money and 3) address the opioid crisis.

Paying for Part B Drugs Under OPPS

Part B drugs are those used in an outpatient setting pursuant to a physician’s order and are usually injectables. The Centers for Medicare and Medicaid Services (CMS) pays for Part B drugs in five different ways divided into two categories: 1) separately payable with line-item reimbursement and 2) not separately payable without line-item reimbursement (since they’re paid as part of a bundle/ package). Regardless of where the drug falls in these categories, it’s essential to bill for each and every drug. CMS uses claims information to set rates in future years and makes them available to big data pools for analytic purposes. Any missing or erroneous data skews the accuracy of the pools and leads to faulty pathway development or decision-making.

In the first category (separately payable), these include:

1) New drugs not yet assigned a unique Healthcare Common Procedure Coding System code

2) New pass-through drugs, biologicals and radiopharmaceuticals (status indicator [SI] G)

3) Specified covered outpatient drugs (SI K)

In the second category (not separately payable) (SI N), these include:

4) Lower-cost packaged products costing (proposed) less than $125 per day (up from $120 in 2018)

5) Regardless of cost, products used in policy packaged services.

Payment for all packaged drugs, biologicals and radiopharmaceuticals is included in the services and procedures with which they are reported. These include:

• All diagnostic radiopharmaceuticals
• All contrast agents
• Anesthesia drugs
• Implantable biologicals that are surgically inserted or implanted into the body through a surgical incision or natural orifice
• Drugs, biologicals and radiopharmaceuticals that function as supplies when used in a diagnostic test or procedure
• Drugs and biologicals that function as supplies or implantable devices in a surgical procedure

Average sales price (ASP) for these drugs can vary from one quarter to another, and this year, CMS is proposing to change SIs to reflect a shift from SI K to SI N and back again as needed.

OPPS 2019 Proposed Payment

Transitional pass-through status: Non-pass-through separately payable drugs will continue to be paid for at ASP plus 6 percent (minus 2 percent sequestration). Some of these will expire in the quarter that is as close to three full years as possible after the products were first covered with pass-through payment status. The proposed rule lists 45 drugs with new/continuing pass-through status and 23 that lose passthrough payment status and move from SI G (pass-through) to SI K (separately payable) or SI N (items and services packaged into ambulatory payment classification [APC] rates). For 2019, new drugs and biologicals will be paid at wholesale acquisition cost (WAC) plus 3 percent (rather than WAC plus 6 percent) before ASP is available. If WAC is not available, CMS will continue to pay 95 percent of average wholesale price (AWP). Proposed provisions reducing transitional pass-through payments for policy-packaged drugs, biologicals and radiopharmaceuticals to offset costs packaged into APC groups is being developed for diagnostics and skin substitutes, and will be published by CMS as decisions are made.

Drugs and biologicals: The threshold for drugs and biologicals that are separately payable has increased to $125 per day based on ASP, an increase of $5 over this year. These will continue to be paid at ASP plus 6 percent (minus 2 percent sequestration) under the statutory default payment policy adopted in 2013. CMS will pay all non-pass-through separately payable therapeutic radiopharmaceuticals at ASP plus 6 percent (minus 2 percent sequestration) as well. However, radiopharmaceutical manufacturers are not required to submit ASP (although some manufacturers do voluntarily submit data, and CMS will use if for a patient-ready dose). If ASP data are not available, CMS will base payment on mean unit cost from its claims data.

To respond to these changes, pharmacy providers should ensure all drugs with SIs G, K and N are billed regardless of whether they are separately payable. The updated addendum B (a voluminous Excel spreadsheet that is updated quarterly throughout the year) will be published later this fall and will indicate the status indicators of Part B drugs and their payment rates. One of the simplest ways to use it is to sort the SI column and look only at SI G, K and N drugs. In addition, pharmacy providers should prepare for changes in their list of waste billing drugs by determining which on the current list have moved from K to N status and will no longer be eligible for waste billing as of Jan. 1.

Payment rate changes for certain Medicare Part B drugs purchased by hospitals through 340B: Understanding what is proposed is essential before working on any statistics or predictions. First and foremost, this is not a Health Resources and Services Administration rule change, although many administrative changes to the 340B program are anticipated in the new year. These OPPS changes apply only to Medicare patients treated in an OPPS setting.

The proposed 2019 OPPS rules retain the 2018 rates that cut reimbursement for 340B facilities, as well as the modifier requirement that is the trigger to identify drugs with rate cuts. Products acquired under 340B and used in an outpatient setting for Medicare-eligible patients will continue to be paid at ASP minus 22.5 percent, WAC minus 22.5 percent or 69.46 percent of AWP, as applicable. Remember that OPPS reimburses in five different ways (pass-through before and after ASP is established, separately payable, and bundled or packaged either due to cost or statute). Only separately payable drugs (SI K) are affected; drugs on pass-through status (SI G) and vaccines continue to be excluded. Nonexcepted, off-campus hospital departments defined as outpatient facilities located away from the hospital’s main facility paid under physician fee service (PFS) will also be subject to the reduction in 2019 and will be paid ASP minus 22.5 percent for drugs acquired through the 340B program. This is a change from this year when they were the exception to the payment cut rule. Also remember that CMS covers 80 percent of the payment with the remaining 20 percent the patient’s responsibility, either out of pocket or through secondary insurance. When payment rates decrease, this positively affects patients by lowering their costs.

Biosimilar products in 2019: There are no proposed changes to the 2018 CMS revised payment policy for biosimilar products that established separate coding and a separate payment rate for each biosimilar product, even if they have the same biological reference product as another biosimilar product. All biosimilar biological products are eligible for passthrough status, not just the first biosimilar for a reference product. Biosimilar products purchased under 340B also are subject to the payment cuts.

Responding to the Opioid Crisis

In response to recommendations from the President’s Commission on Combating Drug Addiction and the Opioid Crisis, the proposed rule set contains extensive discussions of practice changes that could be beneficial. For example, CMS is proposing to unpackage and pay separately for the cost of non-opioid pain management drugs that function as surgical supplies when they are furnished in the ambulatory surgery center setting in 2019. An equitable payment adjustment in the form of an add-on payment for APCs that use a non-opioid pain management drug, device or service is also being discussed, with Exparel as an example. In other rules, CMS is proposing getting rid of pain management questions from Hospital Consumer Assessment of Healthcare Providers and Systems in response to the opioid epidemic.

Also of interest to pharmacies are the proposed site-neutral payments under which hospital clinic visits will be reimbursed at the same rate as physician offices and other ambulatory facilities. The PFS rule proposes telehealth/virtual care reimbursement that will offer many new opportunities.