2018 OPPS Final Rule + 340B Under Trump · Hospitals reimbursed at the same rate as physician...

2018 OPPS Final Rule + 340B Under Trump

Presenters:

Bonnie Kirschenbaum, MS, FASHP, FCSHP

Consultant, Columnist

Boulder, CO

[email protected]

BKirschenbaum 3.2018 1

FACULTY DISCLOSURE

The faculty reported the following financial relationships or

relationships to products or devices they or their

spouse/life partner have with commercial interests related

to the content of this CE activity:

• The speaker reports no conflicts of interest

• The presentation should not be considered as legal advice


CMS: Drug Prices Could Drive Future Health Spending

• CMS actuaries project drug spending will see the fastest growth rate among other health care goods and services categories

• Forecast a 5.5% annual growth rate in health care spending between 2017-2026, >3.8% recorded growth between 2008-2013

• Forecasts point to prescription drug spending as the main driver in future health care spending with an average 6.3% annual growth rate

• https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2017.1655?journalCode=hlthaff

Site Neutral Payment Proposals under consideration

Hospitals reimbursed at the same rate as physician offices and other ambulatory facilities.


https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2017.1655?journalCode=hlthaff

Medicare The single largest

payor

Part A (IPPS)HospitalizationNot eligible for 340B pricing

Part BOutpatient (OPPS) & MD Office (PFS)Drugs covered as incident to in both OPPS & PFSEligible for 340B pricing

Part DPrescription Drug Coverage for

Home/Ambulatory useMTM applies Eligible for 340B pricing


Integrity & Data Governance must be part of facility culture from the top down!

❖Those digital capabilities healthcare is dependent on have SIGNIFICANT effects on revenue

❖Even the smallest error or missing information can lead to a claim denial

❖You MUST know what feeds into these systems and how it affects revenue

• Have no idea of whether what actually happens is what the bill represents?

• Wasting a lot of time & money trying to correct errors?

• Ever looked into how much rework costs your facilities?

• Don’t even know what you’re doing/not doing to ensure accuracy?

• Belong to that set it, check it and forget it group?

• Pinpoint the weak spots and move forward!!

• What’s your cross-functional approach to denial prevention and management going to be?


Diabetes with complicationsReactive airway diseaseCompromised renal functionConsults Scans & x-raysMultiple lab testsSeveral proceduresPrescription drugsSpecialty drugs

ICD10 codesCPT codesHCPCS codesModifiers to codes

$$$Big

Data

Pool

Patient Healthcare providers


What’s all the fuss with NDC #’s?

• National Drug Code #s that identify– The manufacturer (1stdigit set), drug (2nddigit set), package size (3rddigit set)

• Miscellaneous HCPCS codes must be accompanied by the NDC# for accurate payment!!

• NDC reporting is essential for Medicaid + 340B billing– Why? Because the manufacturer doesn’t want to pay Medicaid rebates or offer 340B pricing if

his drug wasn’t the one being used!!!

– CMS wants outpatient departments and clinics & physician offices to do a better job of reporting NDCshttp://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNMattersArticles/Downloads/SE1234.pdf

• HRSA 340b GPO exclusion language: hospitals much more NDC centric, imperative that NDCs are accurate


http://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNMattersArticles/Downloads/SE1234.pdf

Payment for a drug not yet assigned a HCPCS code

• New drug: fabulosomab

• AWP: $10,000

• HCPCS code: not yet assigned

• Billed using J3490 or J3590

• Payment: ~$35 (-2% sequestration)

• Why? You didn’t identify the drug in a codeablefashion for the payor, used the wrong HCPCS code

• Who’s responsible? Pharmacy must provide the NDC# to Rev Cycle (or add it to the line item if PDM/CDM are the same file)

• Not otherwise classified (NOC) codes: for 'unclassified drugs' or 'not otherwise classified' drugs (J3490) and biologics (J3590). Must be accompanied by NDC#

• New drug: fabulosomab

• AWP: $10,000

• HCPCS code: not yet assigned

• Billed using C9399 + NDC code + dose

• Payment: 95% of AWP ($9500 -2%) until ASP set

• Why: You provided the payor with the drug name by supplying it’s NDC, used the correct HCPCS code

• Who’s responsible? Pharmacy must provide the NDC# to Rev Cycle (or add it to the line item if PDM/CDM are the same file)

• C9399: new FDA approved drugs, biologicals and radio pharmaceuticals with no specific HCPCS code assigned yet, must be accompanied by NDC#


Summary: OPPS 2018 Payment for Drugs & Biologicals.Sequestration stays at 2% for Medicare, was extended through 2027 by the budget

deal earlier this year, appropriations bill has no impact

New drugs not yet assigned unique

Healthcare CommonProcedure Coding System (HCPCS)

codes

New pass-through drugsNon pass-through

separately payable drugs >$120/day

Policy packaged or lower-cost packaged

products costing ≤$120/day

• No Change from 2017

• 95% of average wholesale price (AWP)

• NDC # required to identify drug used & determine accurate payment

• Average sales price (ASP) + 6%

• Payment based on wholesale acquisition cost (WAC) + 6% until enough ASP data gathered

• Pass-through status expiresfor 19 products

• 50 products either keep or gain pass-through status

• MD office rate ASP+6%

• Paid at ASP + 6% if not purchased under the 340B program

• Paid at ASP – 22.5% if purchased under the 340B Program (some exceptions apply)

• Increased from $110

• No separate reimbursement; drug costs are bundled into the procedure

• HCPCS codes must be reported on bill


We’re the SI Team, here to help you!

G

K N

Pass Through Drugs:

Separately Payable

Specific covered OP drugs:

Separately Payable

Me too!Not me, I’m partof a

bundle

Packaged or

bundled

products:

Not separately

payable


CMS pays for Part B Drugs in 5 ways

Separately Payable (will see line item reimbursement)– New drugs not yet assigned unique HCPCS Code (SI G or K)

– New pass-through drugs, biologicals + radiopharmaceuticals (SI G)

Separately Payable (will see line item reimbursement)– Specified covered out-patient drugs (SCODs) costing> $120/day (SI K)

Not Separately Payable (SI N) (will not see line item reimbursement, are paid for as part of a bundle/package)

– Lower-cost packaged products costing <$120/day

– Regardless of cost, products used in policy packaged services


No 2018 Changes to the following:

• Payment for drugs & biologicals with pass-through status, including policy-packaged drugs remains at ASP + 6%, -2% Sequestration remains

• Applies to contrast agents, diagnostic radiopharmaceuticals, anesthesia drugs; drugs, biologicals & radiopharmaceuticals that function as supplies when used in a diagnostic test or procedure plus drugs & biologicals that function as supplies when used in a surgical procedure & diagnostic + therapeutic radiopharmaceuticals

G


Do I need to do anything? Yes!(See Appendix for lists )

Action Steps Using Addendum B

▪ Check out the 38 continuing pass through products (SI G) to identify any HCPCS code changes, incorporate into PDM + CDM files

▪ Determine correct file build for 8 new pass through drugs, add waste billing if applicable

▪ Remember that passthrough drugs (SI G) are added to/leave the listing quarterly

▪ Note status indicator changes on those leaving passthrough status

▪ 4 are moving to bundled/packaged status (SI N)

▪ 15 are moving to specifically covered SCOD status (SI K)

▪ Remove d/c passthroughs with SI N from waste billing if applicable


New Passthrough Drugs + Biologicals Effective April 1, 2018HCPCS Long Descriptor APC SI

C9462 Injection, delafloxacin, 1 mg 9462 G

C9463 Injection, aprepitant, 1 mg 9463 G

C9464 Injection, rolapitant, 0.5 mg 9464 G

C9465 Hyaluronan or derivative, Durolane, for intra-articular injection, per dose 9465 G

C9466 Injection, benralizumab, 1 mg 9466 G

C9467 Injection, rituximab and hyaluronidase, 10 mg 9467 G

C9468 Injection, factor ix (antihemophilic factor, recombinant), glycopegylated,

Rebinyn, 1 i.u.

9468 G

C9469 Injection, triamcinolone acetonide, preservative-free, extended-release,

microsphere formulation, 1 mg

9469 G

Q2040 Tisagenlecleucel, up to 250 million car-positive viable t cells, including

leukapheresis and dose preparation procedures, per infusion

9081 G

Q2041 Axicabtagene Ciloleucel, up to 200 Million Autologous Anti-CD19 CAR T Cells,

Including Leukapheresis And Dose Preparation Procedures, Per Infusion

9035 G

Q5104 Injection, infliximab-abda, biosimilar, (renflexis), 10 mg 9036 GBKirschenbaum 3.2018 14

CMS hospital outpatient payments for Novel lymphoma drugs

Outpatients

• Yescarta set near standard mark-up rate at $395,380 ($373,000 list price) Copay: at least $79,076

• Kymriah at $500,839 ($475,000 list price)

Inpatients

• Gilead Science and Novartis are asking for additional Medicare reimbursement

• would be in the form of "new technology add-on payments"

• No CMS decision has been made regarding the requests


No 2018 Proposed Changes in non-340B facilities to:

• Non-Pass-Through Separately Payable Drugs

• Remains at ASP + 6% (- 2% sequestration)

• However, cut-off increases to $120/day based on ASP

K


Non Pass-Through Radiopharmaceuticals: A mixed bag

• Non-pass-through separately payable therapeutic radiopharmaceuticals paid at ASP + 6%

• Diagnostic radiopharmaceuticals are policy-packaged

• Radiopharmaceutical manufacturers are not required to submit ASP data

• Some manufacturers voluntarily submit data

• 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


Do I need to do anything? Yes!

• Action Steps Using Addendum B▪ Check for HCPCS code changes effective 1.1.2018

▪ Remove drugs moving from SI K to SI N from waste billing if applicable

▪ Insure that the 15 discontinued passthrough drugs that have are moved to specifically covered SCOD status (SI K) are assigned the correct HCPCS codes and billing unit crosswalk calculation


2018 Coding and Payment for Biosimilars

• CMS revised its payment policy for biosimilar products

• In contrast to 2016, CMS now will establish separate coding and a separate payment rate for each biosimilar product, even if it has the same biological reference product as another biosimilar product– Previously, biosimilars with the same reference product shares a single HCPCS code and were

paid based on their volume-weighted ASP + 6% of the reference product’s ASP

• All biosimilar biological products now will be eligible for pass-through status, not just the first biosimilar for a reference product

• Flash!!! HCPCS Code Changes for Biosimilars

• https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNMattersArticles/Downloads/MM10454.pdf


Packaged Drugs, Biologicals, Radiopharmaceuticals• Certain non-pass-through drugs, biologicals, & radiopharmaceuticals are

“policy-packaged” – All diagnostic radiopharmaceuticals

– All contrast agents

– Anesthesia drugs

– Implantable biologicals surgically inserted or implanted into the body through a surgical incision or natural orifice

– Drugs, biologicals, radiopharmaceuticals functioning as supplies when used in a diagnostic test or procedure

– Drugs & biologicals functioning as supplies/implantable devices in surgical procedures

• Others are packaged when per day costs do not exceed a cost threshold: $120 in 2018 up from $110 in 2017

• Payment for all packaged drugs, biologicals, and radiopharmaceuticals is included in the services & procedures with which they are reported

NI’m part of

a bundle


Do I need to do anything? Yes!

Action Steps• Insure that Rev Cycle continues to bill for these products

– they still are being paid for, but in a bundle and no longer separately

–Many Rev Cycle teams place a hard stop on billing these

–A very bad decision that contributes to cost of treatment data inaccuracy + the loss of drug admin revenue

–Medicare requests that these be included in billing transactions

• Remove these products from waste billing

– lost eligibility since they no longer are separately payable


Blood Products• Payment for blood clotting factors

– Continues @ ASP +6% and a furnishing fee using an updated amount would continue to be provided. CY 2018 furnishing fee is $0.215/unit

– Diagnosis Code Update for Add-on Payments for Blood Clotting Factor Administered to Hemophilia Inpatients

– 7-1-2018: updated diagnosis codes required to allow add-on IPPS payments for blood clotting factor administered to hemophilia inpatients. ICD-CM code D68.32 will be terminated, continuing ICD-CM codes for add-on payment listed in Section 20.7.3, Chapter 3 “Medicare Claims Processing Manual”. https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNMattersArticles/Downloads/MM10474.pdf

• Payment for blood & blood products– would continue to be established using the agency’s blood-specific cost-to-charge ratio (CCR)

methodology

– Because costs of blood & blood products are reflected in the overall costs of C-APCs, CMS would continue not making separate payments for blood & blood products when they appear on the same claims as services assigned to C-APCs


Changes to Reimbursement for Off-Campus Provider-Based Facilities

• CY 2017: CMS implements a new policy to pay for certain items & services furnished in non-excepted off-campus PBDs (generally entities that began billing Medicare as off-campus PBDs after Nov. 2015) through the PFS at 50% of OPPS rates

• CY 2018: CMS finalized a payment rate of 40% of OPPS rate

• PBDs not subject to 340B alternative payment methodology, but CMS considering future payment policy changes. 2018: Stay @ ASP+6%

• CY 2019 & future years: CMS intends to examine claims data to determine appropriate methodology and adjustments to calculating payment rates


2018 Coding and Payment for Biosimilars

• CMS revised its payment policy for biosimilar products

• In contrast to 2016, CMS now will establish separate coding and a separate payment rate for each biosimilar product, even if it has the same biological reference product as another biosimilar product– Previously, biosimilars with the same reference product shares a single HCPCS code and

were paid based on their volume-weighted ASP + 6% of the reference product’s ASP

• All biosimilar biological products now will be eligible for pass-through status, not just the first biosimilar for a reference product

• Flash!!! HCPCS Code Changes for Biosimilars• https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-

MLN/MLNMattersArticles/Downloads/MM10454.pdf


OPPS Institutional Billing for No Cost Items Updated 3.30.2018, reminder of the 2009 policy in place

• Drug provided at no cost: claims processing edits prevent drug administration charges from being billed when the claim does not contain a covered/billable drug charge

• For drugs provided at no cost in the hospital outpatient department, providers must:– report the applicable drug HCPCS code and appropriate units with a

token charge of less than $1.01 for the item in the covered charge field and mirror this less than $1.01 amount reported in the non-covered charge field.

– also bill the corresponding drug administration charge with the appropriate drug administration CPT or HCPCS code

https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNMattersArticles/Downloads/MM10521.pdf


Conditional packaging of low-cost drug administration services Effective 2-1-2018

• Applies equally to both billing daily and billing on a recurrent account reimbursement received.

• Conditionally packages payment for certain drug administration services assigned to APCs 5691 and 5692 when these services are performed with another service

• Services are packaged based on the service date, not on how the services are billed.

• Add-on codes and preventive services are excluded from this conditional packaging policy.

https://www.gpo.gov/fdsys/pkg/FR-2017-12-14/pdf/R1-2017-23932.pdf (table on page 38 of codes that will and will not be conditionally packaged)


CMS changed payment rates for certain Medicare Part B drugs purchased by hospitals through 340B

• Essential to understand what the new rule entails before working on any stats, predictions or system changes

• As changes are part of OPPS rule, apply only to Medicare patients treated in an OPPS setting

• Remember: OPPS reimburses in 5 different ways (pass-through before & after ASP established, separately payable, bundled or packaged due to cost & bundled or packaged due to statute)

• Only separately payable non-pass through drugs (SI K) affected by this ruling and only when used for Medicare patients in non exempted facilities in an outpatient setting. 312 SI K drugs listed in 1.1.2018 Addendum B


Payment for Drugs Purchased with 340B Drug Discounts OPERATIONAL DETAILS:

• Providers must report modifier “JG” when submitting claims for separately payable drugs acquired under the 340B program – The use of this modifier is required and triggers the alternative payment methodology

• Excluded providers, such as rural sole community hospitals, children’s hospitals, and PPS-exempt cancer hospitals, will report modifier “TB” for separately payable drugs acquired under the 340B program – The use of this modifier is for informational purposes only

• $1.6B savings “will be redistributed in an equal offsetting amount to all hospitals paid under the OPPS through increased payment rates for non-drug items and services furnished by all hospitals paid under the OPPS for CY 2018.”


Rev Cycle and Pharmacy: Working in harmony

• Who is going to add the modifiers?

–Rev Cycle knows how to use modifiers and knows who is a Medicare patient but doesn’t know which drugs are purchased under 340B and used for 340B eligible patients

–Pharmacy knows which drugs are purchased under 340B and used for 340B eligible patients but using modifiers is not a core strength and most don’t receive payor info


What should I do?

Strip it out

• CDM: Add JG modifier to all status K drugs purchased with 340 B discounts

• Rev Cycle strips it out when

– the patient is not Medicare

– the drug is not used in an outpatient setting

– the patient is not 340B eligible

– the drug no longer is 340B purchased

• Dilemmas

– Failure to strip = lost revenue

– Rev Cycle assuming responsibility for accuracy of 340B use data for audit

Add it in

• On a per patient basis, add the JG modifier to Status K drugs that are purchased under 340B when they are used in 340B eligible Medicare patients in an outpatient setting

• No other patients or drugs are affected

• Benefits: The most accurate method

• Pitfalls: lots of work + coordination with Rev cycle as to who’s going to add the modifier


340B benefiting the patient directlyIf you didn’t do it on your own, CMS is doing it for you

ASP+6% Scenario

Infliximab 100mg buy @ 340B $

• J1745 Billing Unit 10mg $85.811

• Bill 10 billing units

• Total reimbursement $858.11

• CMS pays you 80%: $686.49*

• Sequestration: $672.76 ($645.85)

• Patient copay 20%: $171.62

ASP-22.5% Scenario

• Infliximab 100mg buy @ 340B $

• J1745 Billing Unit 10mg $63.717

• Bill 10 billing units

• Total reimbursement $627.39

• CMS pays you 80%: $501.91*

• Sequestration: $491.87 ($472.20)

• Patient copay 20%: $125.48


* Sequestration applies to the 80% facility payment only. Currently -2%

340B Proposed Federal Legislation

• HHS asks OMB for another delay of 340B Drug Discount Rule• 340B PAUSE Act (Dec 21 Bucshon ) H.R. 4710 – the 340B Protecting Access for the Underserved

and Safety-Net Entities – Imposing a 2 yr moratorium on new DSH parent hospital registrations in 340B and on new child site

registrations for existing DSH hospitals in the program– Imposing new reporting requirements on DSH hospitals and free-standing children’s and cancer hospitals,

requiring them to collect and report data on: – Patients receiving 340B drugs broken down by payer mix, for hospitals and their child sites– Total costs and total charity care costs incurred by each child site– Total 340B drug reimbursement and acquisition costs for each hospital– Contracts with state or local government for nonprofit hospitals required to have such contracts– The names of all third-party vendors providing 340B services for each hospital and child site

• HELP Act (Jan 16, Cassidy)– would change eligibility requirements for DSH, children's, and cancer hospitals, as well as new eligibility

requirements for their child sites. – would also impose a 2-year freeze on new hospital participants in 340B– Would establish a number of reporting requirements under the broad rubric of “transparency.”

Senate hearing March 15 (contentious) No results, decisions as of yet BKirschenbaum 3.2018 32

States Take 340B Action Too!California Democratic Governor Jerry Brown's budget proposal to carve Medicaid out from 340B • hospitals try to block proposal to ban Medicaid providers from 340B• almost half of hospitals would e affected in a state where roughly 1/3 of the population, or

more than 14 million people, is covered by Medicaid, 80% by managed care• potential alternatives to the full carve-out of Medicaid from 340B

– prohibition or limit on contract pharmacies from dispensing 340B drugs to Medicaid patients, as was proposed last year

– prohibition or limit on certain covered entities from dispensing some or all 340B drugs to Medicaid patients– decision to pay for 340B drugs at cost within managed care– maintain the status quo

Other States• unclear how many states may follow suit with similar 340B measures• Ohio and Oregon have both banned contract pharmacies from dispensing 340B drugs



Eligible

Facility

Eligible

Physicians

Eligible

Patient

Eligible

Drug

340B

Requires

Got all 4?There’s no such

thing as

presumptive

eligibility !

Diversion:

someone getting

a 340B acquired

drug who

shouldn’t have

Critical Issues

• Did you accurately predict financial impact of the change using Addendum B Jan 2017 to identify SI K drugs bought under 340B, calculate the rates and apply this to % of Medicare 340B eligible patients?

• Determining application of modifiers: who and when?

• Because of the fluid nature of SI assignment, setting a strategy for staying accurate and current. Some SI G drugs will become SI K during 2018

• Focusing on the patient: – Through CMS contracted MACs, facility reimbursed 80% of the payment, 20% copay is the

responsibility of the patient or a secondary insurer. Success at collecting imperative!

– The patient is benefiting from the rate cut as well!

– With much of the focus of healthcare on drug pricing and demands for cuts, how can you use this as a positive selling point?

– It’s so meaningful to those on limited budgets! 1st time they’ll personally benefit for particular drugs!!


United Healthcare to offer drug rebates directly to some members

• 2019: UHC expands pharmacy discounts to ~ 7 million enrollees in fully insured commercial group plans

• Discounts applied to Rx at point of sale for drugs if rebates offered by manufacturer• Addresses a key pharma concern: PBMs & insurers pocket much of the discounts from

rebates instead of passing those savings on to consumers• Addresses a central element of HHS plans to lower drug prices: insurers directly share

rebates • HHS Secretary Alex Azar:

– UHC's new policy "is a prime example" of what the Trump administration wants to achieve. "Empowering patients and providers with the information and control to put them in the driver’s seat is a key part of our strategy at HHS to bring down the price of drugs and make healthcare more affordable,"

– "We are already seeing clear momentum toward the type of innovation in the private-sector that will be an important part of the value-based transformation that is coming to America’s healthcare system,"


Aetna to Pass on Drug Rebates to Consumers

• Move comes as insurers face pressure to lower costs, improve transparency

• Aetna Inc. said it would pass on drugmaker rebates directly to consumers who take the medications, in the latest move by a health insurer amid pressure to reduce costs and improve transparency around pharmaceuticals.

• WSJ March 27, 2018


IT, Rev Cycle and Finance Team Conversations

• You must know the payor + their requirements!!

• SI changes, HCPCS code changes – Who manages this?

– Are the pharmacy drug files built to accommodate this?

• Bundled/packaged payments, including drug admin– Are all drug charges being submitted to payors?

– If not, why not? How can this be remedied?

– Inaccurate treatment data if missing, drug admin fees rejected

• 340 B implications– Determine impact

– Continue to use 340B for Medicare Part B SI K drugs in OPPS?

– Critical: assignment, use of modifiers Spoiler alert! How well did the use of the JW modifier go?BKirschenbaum 3.2018 38


• Why are they all separate? • Where’s the end-to-end visibility or financial

analytics representing the overall process?• Super difficult to maximize overall

process/results when one doesn't know what the other’s doing

• Something’s going to get left out!!!

Coding

Charge Capture

Contract Management

Clinicians

IT

Pharmacy

EHR

OLD School Thinking

Our New Survival Team

The New Era of HealthcareWhat’s pharmacy going to contribute?

Adding it up

• "Total cost of care" a concept gaining traction when moving from fee-for-service to value-and-risk-based arrangements

• A key concept: CLINICAL INTEGRATION ACROSS PROVIDERS

• Robust, complete, accurate data and analytics• All drugs regardless of where dispensed or

used• Are your old rigid procedures standing in the

way? Contributing to excess cost?• Paralyzed in moving forward because of

resistance to change? Not knowing how or what to do? Oblivious to payment changes?

• Actions in your pharmacy supporting this or being divisive?


MY health

system,

MY

pharmacy,

MY rules

Everyone

else

Just how many kinds of bundles could there be? Lots!!

Drugs costing <$120/day

Entire episode of care (e.g. breast cancer, lung cancer, OCM)

Defined episode of care(e.g. CJR)

IV drug admin

CMS Policy-Packaged Drugs, Biologicals & Radiopharmaceuticals

CMS Bundled Payments for Care Improvement (BPCI) Advanced Model

• Initiative is comprised of 4 broadly defined models of care– link payments for the multiple services beneficiaries receive during an episode of care.

– organizations enter into payment arrangements that include financial and performance accountability for episodes of care

– models may lead to higher quality and more coordinated care at a lower cost to Medicare.

• Model 1: the episode of care is defined as the inpatient stay in the acute care hospital

• Models 2,3: involve a retrospective bundled payment arrangement where actual expenditures are reconciled against a target price for an episode of care

• Model 4: a single, prospectively determined bundled payment to the hospital that encompasses all services furnished by the hospital, physicians, and other practitioners during the episode of care, which lasts the entire inpatient stay

• https://innovation.cms.gov/initiatives/bundled-payments/


UnitedHealth will advance its bundled payment initiatives

UnitedHealth Group plans to increasingly work with physicians, health systems and the government to boost Medicare bundled payment programs

• intends to extend analytics, technology and care coordination support to healthcare providers participating in bundled payment models.

• “extensive experience using data and technology to help coordinate care and improve health outcomes positions the company as a strong partner for care providers participating in bundled payment programs,"

• "This form of value-based care is a benefit both for the people needing treatment and the care providers delivering it, and UnitedHealth Group is committed to finding even more ways to expand its use."

• https://www.beckershospitalreview.com/payer-issues/unitedhealth-will-advance-its-bundled-payment-initiatives-3-things-to-know.html


How are you getting paid for your part of the bundle?

• Reform was not a theory about industry structure but an effort to change the payment structure. It was really about insurance and payment changes. And the changes meant providers were going to get paid less.

• While the future is uncertain, assume that bundled payments or payments for episodes of care would become increasingly prevalent, if not dominant

• These changes would force the industry to develop new structures and make clinical integration an economic necessity


Pharmacy! How are you recouping the $ cost of the <$120/day drugs?

• Facility gets paid for the patient coming to the clinic for the procedure

• Drug administration fees are paid if the product is administered by infusion

• The drug is not separately paid for

• What arrangements have you made for tracking the cost of the <$120/day drugs and allocating this to the pharmacy?

• CMS requests that all drugs with HCPCS codes be reported separately on claims regardless of payment, data to be used in future rate-setting


Preparing for Value-based Payment While Succeeding at Fee-for-Service

• Strategic Planning: Stop focusing on the short term!• Costs of health care are not sustainable. • Cost is the issue and although crucial, everything else is

secondary • Build a system of health, not a hospital, that focuses on the sick

and the well and crosses many sites and perceived boundaries• Post-Acute Medicine: addressing medical and other patient

needs in alternative settings to improve outcomes and value• * Never forget that current + past claims data is the basis on

which all future decisions are made. Confident your are perfect?


Got Strategies ??

• Biosimilars

• Immunotherapies

• Novel Drugs

• Is your P & T Committee up to the challenge?

–Need retooling?

–Need something else?


Appendix of Materials

• Resource links

• Reimbursement background info

• Pass though drugs

• Waste billing

• IV drug administration billing

• Biosimilar strategy development


Resources

• CMS FAQ on 340B changes– Https://www.cms.gov/Medicare/Medicare-Fee-for-Service-

Payment/HospitalOutpatientPPS/Downloads/Billing-340B-Modifiers-under-Hospital-OPPS.pdf

• Addendum B Jan 2017https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Addendum-A-and-Addendum-B-Updates-Items/2018-January-Addendum-B.html?DLPage=1&DLEntries=10&DLSort=2&DLSortDir=descending

• Biosimilar products– https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Part-B-Drugs/McrPartBDrugAvgSalesPrice/Part-

B-Biosimilar-Biological-Product-Payment.html

• OPPS Final Rule: https://www.gpo.gov/fdsys/pkg/FR-2017-11-13/pdf/2017-23932.pdf

• PFS Final Rule: https://www.gpo.gov/fdsys/pkg/FR-2017-11-15/pdf/2017-23953.pdf

• ASP fileshttp://www.cms.gov/Medicare/Medicare-Fee-for-Service-Part-B-Drugs/McrPartBDrugAvgSalesPrice/index.html


https://www.gpo.gov/fdsys/pkg/FR-2017-11-13/pdf/2017-23932.pdf

https://www.gpo.gov/fdsys/pkg/FR-2017-11-15/pdf/2017-23953.pdf

http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Part-B-Drugs/McrPartBDrugAvgSalesPrice/index.html

Reimbursement Background Info


Average Selling Price (ASP)

• Average selling price of manufacturer’s sales of all US purchases for each NDC for 1 calendar quarter, divided by total number of units sold in that quarter

• Excludes nominal pricing, Medicaid “best price” & 340B price in 2018

• Includes volume, prompt pay discounts, free goods, chargebacks, rebates

• Updated quarterly, get on the distribution list!!

• https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Part-B-Drugs/McrPartBDrugAvgSalesPrice/2016ASPFiles.html

• Based on price manufacturer sells product at to distributor or specialty pharmacy

• Not based on the price you pay

• Doesn’t take into account or include any mark-ups you pay to purchase product

• Lobby for ASP restructuring? It’s more important than the % mark-up!


The Importance of Codes

▪Coding = the language that describes what was done and what was used. It’s the operational link between coverage and payment ▪ Just one misconfiguration can put your payment at risk!▪Finding and fixing mistakes in your system file is critical▪Maintained by CMS-HCPCS working group with an

annual release http://www.cms.hhs.gov/HCPCSReleaseCodeSets/ANHCPCS/list.asp#TopOfPage


Quick review of charging

• ICD10 codes designate disease types – CPT codes (determined by the AMA)

– used by physicians, providers to describe procedures they do

– may include payment for all products used during the procedure

• HCPCS codes are for products and may or may not be reimbursed

• DRGs apply to Medicare inpatients

• APCs apply to Medicare outpatients

• SI (status indicators) indicate reimbursement status

• DRG + APC methodology often a template for other insurance

• Part B covers drugs administered in an outpatient setting

• Part D covers self-administered drugs (several oral cancer drugs)


Part B Drugs: Drugs are tied to physician services and fall under the medical benefit (some under PBM control)

▪ Injectables furnished incident to MD service not usually self-administered

▪ Drugs administered via nebulizer/pump furnished by Medicare

▪ Immunosuppressive drugs for organ transplant

▪ Hemophilia blood clotting factors

▪ Certain oral anticancer treatments, Certain oral antiemetics

▪ Pneumococcal, influenza and hepatitis B vaccines

▪ Erythropoietin-like drugs for trained home dialysis patients

▪ Iron dextran, vitamin D injections and erythropoietin-like drugs administered by facilities caring for ESRD patients

▪ Osteoporosis drugsBKirschenbaum 3.2018 55

Brand Name Specific HCPCS Codes

• Most HCPCS codes are listed generically, but a few are unique to the brand name

• Develop unique CDM listings for Brand Name products

– IVIG products

– Some Flu vaccines

– Some factor products

– Skin substitutes

–Biosimilars


Single packaging determination for HCPCS codes that describe the same drug or biological but in different doses

• CMS continues to make packaging determinations for HCPCS codes describing the same drug/biological but in different doses on a drug-specific basis (as opposed to a HCPCS code basis) to avoid creating financial incentives to pick one HCPCS code over the other

• Accurately code SI N products to ensure correct bundle payment

• Of the 17 products listed, only 4 are separately payable (SI K)

– C9257 Injection, bevacizumab 0.25mg

– J9035 Injection, Bevacizumab 10mg

– J1460 Injection, gamma globulin, intramuscular, 1cc

– J1560 Injection, gamma globulin, intramuscular, over 10cc


HCPCS CODES TO WHICH THE CY 2018 DRUG-SPECIFIC PACKAGING DETERMINATION METHODOLOGY Applies

CY 2018 HCPCS Code CY 2018 Long Descriptor

Proposed CY2018 SI

C9257 Injection, bevacizumab, 0.25 mg K

J9035 Injection, bevacizumab, 10 mg K

J1460 Injection, gamma globulin, intramuscular, 1 cc K

J1560 Injection, gamma globulin, intramuscular over 10 cc K

J1020 Injection, methylprednisolone acetate, 20 mg N



J1642Injection, heparin sodium, (heparin lock flush), per 10 units N

J1644 Injection, heparin sodium, per 1000 units N

J1840 Injection, kanamycin sulfate, up to 500 mg N

J1850 Injection, kanamycin sulfate, up to 75 mg N

J2788Injection, rho d immune globulin, human, minidose, 50 micrograms (250i.u.) N

J2790Injection, rho d immune globulin, human, full dose, 300 micrograms (1500 i.u.) N

J2920Injection, methylprednisolone sodium succinate, up to 40 mg N

J2930Injection, methylprednisolone sodium succinate, up to 125 mg N

J3471Injection, hyaluronidase, ovine, preservative free, per 1 usp unit (up to 999 usp units) N

J3472Injection, hyaluronidase, ovine, preservative free, per 1000 usp units N

J7030 Infusion, normal saline solution , 1000 cc N

J7040Infusion, normal saline solution, sterile (500 ml=1 unit) N

J7050 Infusion, normal saline solution , 250 cc N

J7100 Infusion, dextran 40, 500 ml N

J7110 Infusion, dextran 75, 500 ml N

J7515 Cyclosporine, oral, 25 mg N

J7502 Cyclosporine, oral, 100 mg N

J8520 Capecitabine, oral, 150 mg N

J8521 Capecitabine, oral, 500 mg N

J9250 Methotrexate sodium, 5 mg N

J9260 Methotrexate sodium 50mg NBKirschenbaum 3.2018 58

What are MACs?

• US is divided into several geographical regions, each assigned to a Medicare Administrative Contractor (MAC)

• MAC receives billings from the hospital and OP clinics and submits them to CMS for payment

• Know who your MAC is and what peculiarities may affect your region

• Each MAC has a toll free number

• See www.cms.hhs.gov/medlearn/tollnums.asp

• CMS releases updates & software to MACs quarterly

• Provider education articles available shortly after a CR is issued. Sign up at: cms.hhs.gov/medlearn/matters


NCDs, LCDs, PAs and ICD10 : The Vital Links

• understand these?

• positioned your clinical & technical staff to practice in a cross-functional manner along with Patient Navigators to ensure compliance to

• the use of these components of expensive/Specialty Drug & biologicals?

• reimbursement?


• EHR documentation

• ICD10 supports requirements

• Payment

Appropriate Med Ordered

PA, NCD or LCD applies

• No awareness, no follow-up

• No documentation to support use requirements

• No payment due to lack of medical necessity

Appropriate Med Ordered

PA, NCD or LCD applies

$

0

Who’s responsible? Everyone including Pharmacy Clinicians! Pharmacy IT!

Need to redo your file build to support this? Provide a place for EHR documentation? Spend those IT mega$ wisely!!

BKirschenbaum 3.2018 BKirschenbaum 11.2017

Prior Approval vs NCDs & LCDsPrior Approval (Payor) NCDs and LCDs

Applies to: 3rd party carriers

(possibly Medicaid)

Medicare (possibly

Medicaid)

Need Patient’s payor

status?

yes yes

Drug tagged in

CPOE/PDM?

yes yes

Link to actual rule

needed?

yes yes

Rule Requirements: Ask permission first

before drug

administration

Understand & follow

requirements, document

completely and

thoroughly.

Code correctly and as

required.

Payment: Only if permission is

given first

Determined after the fact

and may be denied if not

all rules followedBKirschenbaum 3.2018 BKirschenbaum 11.2017

LCDs, NCDs & Prior Authorizations• Essential that all concerned

– understand which drugs have these requirements

– have set a procedure for how to handle them

– ensure the required EHR documentation BEFORE drug order is written and ESSENTIAL before drug is actually prepared & administered. No after the fact remedy

• If this step not taken or documentation missing, no payment made

• Get LCDs & NCDs from your MAC's website + PA list from your payors. Pay attention to the ICD-10 codes that apply

• Work out a plan: who's doing what, who's documenting what, how’s this info going to be transmitted to pharmacy

• Equally important is ensuring that it remains a permanent part of the record in real time sequence for auditing purposes


Off Label Indications• A dilemma often arises when the literature supports and

a patient is treated for an off-label indication.

• The fact that it is off-label may be sufficient grounds for

the FI to deny payment.

• Patient & billing assistance programs offered by several

pharma companies may be helpful in providing support in

attempting to have denials overturned.

• Officially Accepted Compendia can be used to support

the off-label decision. Be aware of what they are!


What’s needed to get paid for a Part B drug

• Diagnosis that supports it’s use (ICD-10 code)

• Name of the drug (HCPCS code)

• Dose of the drug (converted into billing units)

• Amount of waste, if applicable (converted into billing units)

• Status Indicator (SI) assigned to the drug

• EHR documentation supporting an injectable drug admin charge


One of the nation’s biggest drivers of specialty spend?Provider administered infused or injectable medical benefit drugs!

Goal: Embedding payment requirements in EHRs to improve reimbursement

Where does this info come from? Who’s responsible?

• The diagnosis that supports it’s use (ICD-10 code)

–EHR Documentation provided by the clinicians

–Must be aware of PA or LCD/NCD requirements

• Drug name (HCPCS code): set by HCPCS coding group

• Drug dose (converted into CMS assigned billing units)

• Amount of waste, if applicable (converted into billing units)

• Status Indicator (SI) assigned to the drug

–Determines how the drug will be paid for

• EHR documentation supporting an injectable drug admin charge


Checking accuracy?

How are you supporting this in the EHR order

entry process?

Added documentation for this to your

electronic MAR?

Worked with Rev Cycle to assign correct

admin codes?

Patient registered

• Success: Payor data available

• Fail Point: Pharmacy doesn’t know payor

CPOE File build

• Success: includes PA/LCD/NCD info

• Fail Point: Neither provider nor pharmacy aware of requirements, not included in CPOE file build

Physician Order Entry

•Success: Aware of PA/LCD/NCD requirements, EHR charting thorough & complete for optimum LCD10 code assignment

•Fail Point: Charts scantily, Rev Cycle team codes assigned don’t meet payorrequirements

The wayward path of an appropriate drug for an appropriate patient

Fail Point end result: Payment refused for lack of medical necessity

Success Point end result: $$$


CDM Accuracy

• Success: PDM CDM match with HCPCS and billing units, SI awareness

• Fail Point: Mismatch, incorrect billing unit crosswalks

Vigilance

• Success: regularly review progression of charges through the various IT systems to identify glitches

• Fail Point: Set it and Forget it mentality

Does NaivenessRule?

• Success: Identify & correct procedural issues, misinterpretation of payment rules

• Fail point: Myths prevail and $ are lost


Pass through Drugs


8 Drugs With New Pass-Through Status:


CY 2018

HCPCS

Code

CY 2018 Long Descriptor

J9203 Injection, gemtuzumab ozogamicin, 0.1 mg

C9014 Injection, cerliponase alfa, 1 mg

C9015 Injection, c-1 esterase inhibitor (human), Haegarda, 10 units

C9016 Injection, triptorelin extended release, 3.75 mg

C9024 Injection, liposomal, 1 mg daunorubicin and 2.27 mg cytarabine.

C2028 Injection, inotuzumab ozogamicin, 0.1 mg

C9029 Injection, guselkumab, 1 mg

J7345 Aminolevulinic acid hcl for topical administration, 10% gel,10 mg.

42 Drugs With Continuing Pass-Through Status:


CY 2018

HCPCS

Code


A9515

Choline c-11, diagnostic, per study dose up to 20

millicuries

A9587 Gallium ga-68, dotatate, diagnostic, 0.1 millicurie

A9588 Fluciclovine f-18, diagnostic, 1 millicurie

C9460 Injection, cangrelor, 1 mg

C9482 Injection, sotalol hydrochloride, 1 mg

C9488 Injection, conivaptan hydrochloride, 1 mg

C9492 Injection, durvalumab, 10 mg

C9493 Injection, edaravone, 1 mg

J0565 Injection, bezlotoxumab, 10 mg

J0570 Buprenorphine implant, 74.2 mg

CY 2018

HCPCS

Code


J1428 Injection, eteplirsen, 10 mg

J1627 Injection, granisetron, extended-release, 0.1 mg

J1942 Injection, aripiprazole lauroxil, 1 mg

J2182 Injection, mepolizumab, 1 mg

J2326 Injection, nusinersen, 0.1 mg

J2350 Injection, ocrelizumab, 1 mg

J2786 Injection, reslizumab, 1 mg

J2840 Injection, sebelipase alfa, 1 mg

J3358 Ustekinumab, for intravenous injection, 1 mg

J7179Injection, von willebrand factor (recombinant),

(vonvendi), 1 i.u. vwf:rco

Continued….42 Drugs With Continuing Pass-Through Status:


CY 2018

HCPCS

Code


J7202Injection, factor ix, albumin fusion protein,

(recombinant), idelvion, 1 i.u.

J7207Injection, factor viii, (antihemophilic factor,

recombinant), pegylated, 1 i.u.


recombinant), (nuwiq), 1 i.u.


recombinant), (afstyla), 1 i.u.

J7322Hyaluronan or derivative, hymovis, for intra-articular

injection, 1 mg

J7328Hyaluronan or derivative, gelsyn-3, for intra-articular

injection, 0.1 mg

J7342 Instillation, ciprofloxacin otic suspension, 6 mg

J7503Tacrolimus, extended release, (envarsus xr), oral,

0.25 mg

J9022 Injection, atezolizumab, 10 mg

J9023 Injection, avelumab, 10 mg

J9034 Injection, bendamustine hcl (bendeka), 1 mg

CY 2018

HCPCS

Code


J9145 Injection, daratumumab, 10 mg

J9176 Injection, elotuzumab, 1 mg

J9205 Injection, irinotecan liposome, 1 mg

J9285 Injection, olaratumab, 10 mg

J9295 Injection, necitumumab, 1 mg

J9325Injection, talimogene laherparepvec, per 1 million

plaque forming units

J9352 Injection, trabectedin, 0.1 mg

Q5101 Injection, filgrastim (g-csf), biosimilar, 1 microgram

Q5102 Injection, infliximab, biosimilar, 10 mg

Q9982Flutemetamol f18, diagnostic, per study dose, up to 5

millicuries

Q9983Florbetaben f18, diagnostic, per study dose, up to 8.1

millicuries

CY 2017 HCPCS Code CY 2017 Long Descriptor

CY 2017 Status Indicator

CY 2018 Status Indicator

CY 2017 APC

Pass through Payment Effective Date

J0596 Injection, c-1 esterase inhibitor (human), Ruconest, 10 units G K 9445 4/1/2015J0695 Injection, ceftolozane 50 mg and tazobactam, 25mg G K 9452 4/1/2015

J0875 Injection, dalbavancin, 5 mg G K 1823 1/1/2015

J1833 Injection, isavuconazonium sulfate, 1 mg G K 9456 10/1/2015J2407 Injection, oritavancin, 10 mg G K 1660 1/1/2015

J2502 Injection, pasireotide long acting, 1 mg G K 9454 7/1/2015

J2547 Injection, peramivir, 1 mg G K 9451 4/1/2015

J2860 Injection, siltuximab, 10 mg G K 9455 7/1/2015

J3090 Injection, tedizolid phosphate, 1 mg G K 1662 1/1/2015

J7313 Injection, fluocinolone acetonide intravitreal implant, 0.01mg G K 9450 4/1/2015

J8655 Netupitant (300mg) and palonosetron (0.5mg) G K 9448 4/1/2015

J9032 Injection, belinostat, 10 mg G K 1658 1/1/2015

J9039 Injection, blinatumomab, 1 mcg G K 9449 4/1/2015

J9271 Injection, pembrolizumab, 1 mg G K 1490 1/1/2015

J9299 Injection, nivolumab, 1 mg G K 9453 7/1/2015

A9586 Florbetapir f18, diagnostic, per study dose, up to 10 MILLICURIES G N 1664 1/1/2015C9447 Injection, phenylephrine and ketorolac, 4 ml vial G N 1663 1/1/2015

Q4172 PuraPly, and PuraPly Antimicrobial, any type, per square centimeter G N 1657 1/1/2015

Q9950 Injection, sulfur hexafluoride lipid microsphere, per ml G N 9457 10/1/2015

TABLE 21: DRUGS & BIOLOGICALS with PASS-THROUGH PAYMENT STATUS EXPIRES 12.31.2017


I’ve heard you can bill for drug waste …

how does this work?


Answer these 4 questions

• Is the drug being used for a Medicare patient being treated in an outpatient area?

• Are you using a single dose vial/pkg of the drug?

• Does the product have a HCPCS code?

• Does the dose fall into the pass-through or separately payable category and not the <$120/day bundle or any other packaged or bundled payment category?

• If yes, proceed to waste billing

• If no, then there’s nothing to do


Product chosen + prepared in IV room

Drug + Dose + waste documented on the MAR

Drug + Dose + waste billed to Medicare/payor

How are you going to ensure a perfect match?


Steps to TakeThe actions in the IV prep area must match what’s billed & what’s charted in the EHR!

• Determine which drugs are going to be waste candidates

• Create a CDM for each one

– Drug A CDM #123456

– Drug A waste CDM# 123457

• Convert the dose administered into billing units, round up to the next whole billing unit as needed

• Document the dose administered in the medical record

• Determine the number of billing units wasted

– The # in the vial (use the NDC ASP CMS Qtrly update) minus the number of billing units used for the dose

• Document amount wasted & reason why in the medical record

• On the same day, Bill for dose administered using billing units + Bill for amount wasted using billing units


Reducing Reimbursement Loss or Compliance Errors

• Billing for waste is not mandatory but if trying to recoup those $, then…..

• Using the JW modifier is mandatory

• Decide which products your outpatient departments will apply this to

– e.g. may decide to only apply this to a handful of expensive agents in the infusion clinic or specialty outpatient clinics

• Develop a P&P and orient your staff

• Make use of IT but do frequent compliance checks

• Ensure that required documentation is actually happening and in the manner specified by the MAC/FI

• Remember: In the CMS world, you cannot ever bill for more than the amount administered converted into billing units!


Robo waste billing

Waste Billing Candidates if in single dose pkg

G

K N

Pass Through Drugs:

Separately Payable

Specific covered OP drugs:

Separately Payable

YES

YES No

Packaged or

bundled

products:

Not separately

payable


Candidate Drugs

• Success: eligible SI G +K drugs identified, updated quarterly

• Fail Point: Pharmacy unaware of how to do this

Billing Unit Conversions

• Success: Crosswalk accurate, CDM/PDM built to accommodate required charting

• Fail Point: Pharmacy not following up

Reality matches Billing

• Success: clinician actions match charting and billing

• Fail Point: Pharmacy opted for “robo-billing”. Billing person has no idea of what clinician or IV prep area actually did

Billing for Waste


IV Drug Administration Payment


Drug>$120/day

Drug<$120/day

Specialty Drug orPatient Assistance Drug or Nominal Price Drug

Do I get paid for Patient clinic visit?

yes yes yes

Do I get paid for the drug? Yes with a HCPCS code

Not separately, included in the

bundle $

no

Do I bill for the drug? yes yes Yes @ $0 charge

Do I get paid for IV drug administration?

Yes with the correct CPT code &

documentation


documentation


documentation

Medicare Payment for IV drugs


Billing Drug Administration Codes When the Drug Charge is $0

• Drugs supplied by a specialty pharmacy (white bagging)

• Patient assistance program drugs

• Nominally priced or zero priced drugs

Essentials

• All drugs & biologicals must be ordered, documented as given and billed for even if they are not separately payable

Why is this crucial?– Billing asks for reimbursement + gets data into the claim

– Missing drug data = assumption none was given

– Treatment misrepresented if missing drug data

– Actual costs of treating the bundle misrepresented

– No IV drug admin fees paid if no drug billed BKirschenbaum 3.2018 84

How do I do this?

• Create a CDM # for each complimentary product

– Infliximab 10mg/ml CDM# 12345

– Inflximab, no charge CDM # 12346

• Pharmacy creates a corresponding PDM entry for these complimentary products & links it to the CDM#

• When the complimentary product is used, pharmacy must use the order entry for the complimentary product, not for the purchased product

• Bill for the appropriate drug administration fee(s)


Don’t panic! Use this only for a small # of expensive specialty drugs

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