Explore "visante" with insightful episodes like "Visante Pharmacy Automation Series - Part 4", "Visante Pharmacy Automation Series - Part 3", "Visante Pharmacy Automation Series - Part 2", "Visante Pharmacy Automation Series - Part 1" and "Kennedy Erickson - President APhA-ASP" from podcasts like ""Pharmacy Innovators Podcast", "Pharmacy Innovators Podcast", "Pharmacy Innovators Podcast", "Pharmacy Innovators Podcast" and "Pharmacy Innovators Podcast"" and more!
In this episode of the pharmacy innovators podcast we have Ghalib Abbasi and Gee Mathen. These two innovators are making major breakthroughs in pharmacy automation and making it safer for patients! Let's see how they're doing that...
In part 3 of our series on automation, we're going to be talking about the optimization of the automation solution that has been selected.
In the first of our series on pharmacy automation we talked about initial planning...now, we discuss implementation!
In the first of four parts of our series on Pharmacy Automation Projects, we're going to discuss what goes into initial planning.
Kennedy was Born and raised in Olympia, WA, and is a student at Washington State University (WSU) College of Pharmacy and Pharmaceutical Sciences in Spokane
Kennedy was elected the National President for APhA-ASP in 2021 and has been an advocate for promoting diversity, equity and inclusion within the profession as well as the power of advocacy by promoting pharmacists to join together through professional organizations.
Outside of pharmacy, her hobbies include hiking, catching up with family and friends, playing piano, doing puzzles, playing Beat Saber, and hanging out with her two cats, Harrison and Ellinor.
Amar Festic is in charge of Business Development and sales for Loccioni USA, an innovation company focused on high end robotics for hospital pharmacies. He is one of the nation’s experts in robotics applied to IV compounding and has spent 10+ years implementing complex robotics projects and integrated platforms, working with some of the leading institutions in the United States (Mayo Clinic, Cleveland Clinic, Johns Hopkins, Ohio State, Froedtert Health and others) as well as Europe and Asia. Areas of interested and work cover oncology as well as non- hazardous compounding, both in hospitals and 503B settings.
Today on the show we have Pharmacist Dr. LaQuoia Johnson! LaQuoia is more than a pharmacist these days, she's also a life coach and educator that focuses largely on diversity, equity and inclusion.
LaQuoia started a program called Grace Culture that gives a framework for training people on diversity in the workplace.
If you'd like to contact LaQuoia, reach out to her by email at:
Chimeric Antigen Receptor (CAR) T-cell therapy is an example of a rapidly emerging immunotherapy approach called adoptive cell transfer (ACT) where patients’ own immune cells are collected and used to treat their cancer.
This newsletter details coverage and billing instructions when the products are used on an outpatient basis and has been updated to reflect HCPCS codes current as of April 1, 2022.
The Center for Biologics Evaluation and Research (CBER) of the Food and Drug Administration (FDA) regulates cellular therapy products, human gene therapy products, and certain devices related to cell and gene therapy. The FDA provides a list of approved cellular and gene therapies including six that are Car T-cell therapies:
Coverage
CMS finalized a National Coverage Determination (NCD 110.24) on Car T-cell therapies on 8/7/2019. The NCD detailed that for Medicare Fee-For-Service and Medicare Advantage, Medicare covers the autologous treatment for cancer with T-cells expressing at least one chimeric antigen receptor (CAR) when:
Administered at healthcare facilities enrolled in the FDA risk evaluation and mitigation strategies (REMS)
Used for a medically accepted indication, i.e. for either an FDA-approved indication as detailed in the FDA-approved label for the product, or for other uses when the product has been FDA-approved and the use is supported in one or more CMS-approved compendia
When the above requirements are not met, the CAR T-cell therapy is non-covered.
In addition, the routine costs in clinical trials that use CAR T-cell therapy as an investigational agent are covered when they meet the requirements listed in NCD 310.1.
Billing and Reimbursement
HCPCS/CPT codes
Billing for CAR T-cell therapy on outpatients includes HCPCS codes for the therapies as well as the administration. All CAR T-cell products should be billed with revenue code 891.
Kymriah (tisagenlecleucel) is reported with HCPCS code Q2042- Tisagenlecleucel, up to 600 million car-positive viable T cells, including leukapheresis and dose preparation procedures, per therapeutic dose.
Yescarta (axicabtagene ciloleucel) is reported with HCPCS code Q2041- Axicabtagene Ciloleucel, up to 200 Million Autologous Anti-CD19 CAR T Cells, including leukapheresis and dose preparation procedures, per infusion.
Tecartus- (brexucabtagene autoleucel) is reported with HCPCS code Q2053- Brexucabtagene autoleucel, up to 200 million autologous anti-cd19 car positive viable t cells, includimg leukapheresis and dose preparation procedures, per therapeutic dose.
Breyanzi- (lisocabtagene maraleucel) is reported with HCPCS code Q2054- Lisocabtagene maraleucel, up to 110 million autologous anti-cd19 car-positive viable t cells, including leukapheresis and dose preparation procedures, per therapeutic dose.
Abecma (idecabtagene vicleucel) is reported with HCPCS code Q2055- Idecabtagene vicleucel, up to 460 million autologous b-cell maturation antigen (bcma) directed car-positive t cells, including leukapheresis and dose preparation procedures, per therapeutic dose.
Carvykti (ciltacabtagene autoleucel) (received FDA approval on 2/28/2022, but CMS has not yet assigned a HCPCS code and we recommend that this product be reported with C9399- Unclassified drugs or biologicals. This HCPCS code is used to report newly approved products prior to HCPCS specific code assignment.
The administration of any CAR T-cell therapy should be reported with CPT code 0540T- Chimeric antigen receptor T-cell (CAR-T) therapy; CAR-T cell administration, autologous. This CPT code should be reported with revenue code 874 – Infusion of Modified Cells w/CPT 0540T.
Some payers also require that the claim include a new value code 86 with the invoice/acquisition cost when revenue code 891 is present on an outpatient claim.
CMS provides instructions that providers may include all costs and charges and report them under revenue code 891, or they may separately report cell collection, storage and other preparatory activities. However, CMS does not reimburse these codes separately and they are reported for information only. Detailed examples on these two options for CAR T-cell billing for outpatients is available at CMS Transmittal #10454- (November 13, 2020).
Revenue Codes
CMS has also provided instructions for specific revenue codes to report all services associated with CAR T-cell therapy for inpatients and outpatients. The following Revenue Codes are used:
0871 – Cell Collection w/Current Procedural Technology (CPT) code 0537T
0872 – Specialized Biologic Processing and Storage – Prior to Transport w/CPT 0538T
0873 – Storage and Processing after Receipt of Cells from Manufacturer w/CPT 0539T
0874 – Infusion of Modified Cells w/CPT 0540T
0891 – Special Processed Drugs – FDA Approved Cell Therapy
1. Pharmacy and Revenue Integrity should determine if CAR T-cell therapy will be provided and ensure that appropriate chargemaster entries for the products are established with product specific HCPCS codes and the unique revenue code, 891.
2. Pharmacy, Managed Care and Revenue Integrity should determine if any payers require the invoice cost to be added to claim with value code 86 and establish a process to ensure that the invoice cost is correctly added to the claim.
3. Revenue Integrity and HIM Coders should receive instructions as to which products will be utilized and the medical record location where the administration will be recorded.
4. Pharmacy should ensure that if the product is administered under a clinical trial, or received at no cost from the manufacturer, that it is clearly indicated in the medical record to ensure proper billing and coding.
Our goal is simple; we’re taking complex information and making it practical.
Until our next edition, this is Maxie Friemel and Agatha Nolen providing you with tips for increasing your Pharmacy Revenue.
It may seem like a scary or intimidating endeavor, but many pharmacy related denials can be overturned when following the appeal process. Medicare has five levels of appeals beginning with a redetermination by the MAC to Judicial Review in the Federal District Court. Before beginning the appeals process, it is prudent to ensure that the claim was coded and billed accurately. Claims that have an error in billing may be corrected by re-submitting utilizing the corrected claim process. Additionally, it is important to understand the reason for the initial denial and ensure there is clinical justification or other supporting evidence for billing the denied service. Once your homework is complete and an appeal may be justified, follow the process outlined by the payer and work to overturn the denial.
Each level of a Medicare appeal must be completed in writing and follow a specific set of instructions. This includes a specific form and each level outlines the number of days in which the appeal should be submitted from the time of the determination. Each appeal should clearly explain why the appellant disagrees with the decision made and provide any relevant documentation or other justification.
First level of appeal is a redetermination by a Medicare Administrative Contractor (MAC), and must be submitted within 120 days from the date of the initial claim determination.
Second level of appeal is a reconsideration by a Qualified Independent Contractor (QIC) in the event that any party is dissatisfied with the decision from the MAC. The appellant has 180 days from the receipt of the redetermination to file a reconsideration.
Third level of appeal is to request a hearing before an Administrative Law Judge (ALJ). The hearing must be filed with the Office of Medicare Hearings and Appeals (OMHA) within 60 days of the reconsideration decision from the QIC.
Fourth level of appeal is to request a review by the Medicare Appeals Council and must be filed within 60 days of the ALJ decision.
Fifth level of appeal is to request a judicial review in Federal District Court within 60 days of the decision by the Council.
Appealing a claim can be a lengthy process, but a worthy endeavor especially when high cost drug denials are on the line!
Revenue cycle teams should review denials to understand the root cause and submit a corrected claim (if applicable) prior to initiating an appeal.
Pharmacy teams should be involved in the appeal process to assist with providing clinical justification for a denied drug.
Revenue cycle teams should track each appeal to ensure reconsiderations are submitted in a timely fashion.
Our goal is simple; we’re taking complex information and making it practical.
Until our next edition, this is Maxie Friemel and Agatha Nolen providing you with tips for increasing your Pharmacy Revenue.
Reach out to Maxie! afriemel@visanteinc.com
On December 28, 2021, the FDA revised the emergency use authorization (EUA) for COVID-19 convalescent plasma with high titers of anti-SARS-CoV-2 antibodies. It is now authorized in both the inpatient and outpatient setting for patient with immunosuppressive disease or getting immunosuppressive treatment.
On February 10, 2022, CMS issued a new HCPCS code, C9507-Fresh frozen plasma, high titer COVID-19 convalescent, frozen within 8 hours of collection, each unit, billable for dates of service on or after December 28, 2021. The CMS payment rate for C9507 is $750.50.
Pharmacies may not purchase or dispense the product but may be involved in reviewing the patient’s record and profiling the convalescent plasma to provide a comprehensive COVD-19 treatment record in the EHR. Although convalescent plasma is not yet approved by the FDA, it can be provided either under the current EUA or an investigational new drug (IND) application. The product is regulated as a biologic under the Center for Biologics Evaluation and Research (CBER) division of the Food and Drug Administration (FDA).
1. Pharmacy Departments and Blood Banks should review ordering and dispensing of convalescent plasma to ensure that patients meet all criteria authorized in the EUA and that the product is handled and billed as a biologic with HCPCS code C9507 when administered to outpatients.
2. Revenue Integrity should review all patient records for outpatients who received convalescent plasma on or after December 28, 2021 and consider re-billing claims with the new HCPCS code.
Our goal is simple; we’re taking complex information and making it practical.
Until our next edition, this is Maxie Friemel and Agatha Nolen providing you with tips for increasing your Pharmacy Revenue.
Have a question? Contact Maxie! afriemel@Visanteinc.com
On January 11, 2022, CMS released a proposed National Coverage Determination (NCD) decision memorandum which would cover monoclonal antibodies that target amyloid for the treatment of Alzheimer’s disease through coverage with evidence development (CED). This means that FDA-approved drugs in this class would be covered for people with Medicare only if they are enrolled in a qualifying clinical trial and it must be administered in a hospital outpatient setting. The proposed NCD is open to public comment and comments can be submitted until February 10, 2022 at the NCD database for CAG-00460N: https://www.cms.gov/medicare-coverage-database/view/nca.aspx?ncaid=305&bc=0. CMS anticipates a final decision by April 11, 2022.
Currently Aduhelm is the only monoclonal antibody directed against amyloid beta approved by the FDA for the treatment of Alzheimer’s disease receiving approval on June 7, 2021. Initially the pharmaceutical company, Biogen, announced that the selling price would be $56,000 per patient per year. However, in December 2021, the company announced that it was cutting the price in half to $28,000 per patient per year.
The cost and coverage has not been without controversy. As the target population is Medicare-age, CMS recalculated the premium costs for Part B coverage at the initial selling price, with Part B premiums increasing 14.5% in 2022 in part due to the uncertainty of the cost and coverage of Aduhelm. On January 10, 2022, Health and Human Services Secretary Xavier Becerra announced that he is instructing the Centers for Medicare & Medicaid Services to reassess this year’s standard premium in view of the proposed NCD and the manufacturer’s drop in price.
To read the proposed National Coverage Determination decision memorandum, visit: https://www.cms.gov/medicare-coverage-database/view/ncacal-decision-memo.aspx?proposed=Y&NCAId=305
1. Pharmacy should be aware of developing CMS-criteria for monoclonal antibodies for the treatment of Alzheimer’s disease including the proposed requirement for the patient to be enrolled in a CMS-qualifying clinical trial with a final decision by April 11, 2022.
2. The monoclonal antibody must be administered in a hospital outpatient setting to be covered under the proposed NCD.
3. Facilities which anticipate providing monoclonal antibodies for Alzheimer’s patients should consider submitting comments to CMS by February 10, 2022 on the proposed NCD.
Our goal is simple; we’re taking complex information and making it practical.
Until our next edition, this is Maxie Friemel and Agatha Nolen providing you with tips for increasing your Pharmacy Revenue.
Many of you may be experiencing another tidal wave of surges with the Omicron Covid-19 variant. Though we have been fighting the pandemic for almost two years, each surge seems to bring new battles. The NIH recently published new outpatient therapy guidelines to help combat the Omicron variant; as well as, we have received a few questions from our readers on how to handle the billing changes.
Remdesivir is now among one of the treatment options for non-hospitalized patients when Omicron is the predominant circulating variant. CMS has designated HCPCS code J0248, injection remdesivir, 1 mg. The code is effective for dates of service beginning December 23, 2021 and may be used to rebill any previously administered outpatient remdesivir account.
Remdesivir is FDA approved for hospitalized patients and utilizing remdesivir for outpatients is considered off-labeled. It is prudent to ensure patients meet the criteria outlined by the NIH to avoid any denials by the MACs. If denied for payment, following the appeal process to overturn any remdesiver when used according to recommendations. Note, Medicare beneficiaries will be responsible for the 20% deductible for the drug and administration of remdesivir.
Currently, J0248 code for remdesivir has not been updated in the Outpatient Code Editor (OCE). Payers may not be able to process claims until this update has occurred. In which case, it may be advantageous to hold claims temporarily until the payers are ready to accept the newly created code.
Other updates for Covid-19 Vaccine and Monoclonal Antibodies
Effective January 1, 2022, Original Medicare (or Medicare Fee for Service) will no longer cover the vaccine or monoclonal antibodies on behalf of the Medicare Advantage (MA) plans. MA claims should have split any vaccine or covid related monoclonal antibodies to be billed to the Original Medicare plan. This claim split should be “undone” for any claims billed out after January 1, 2022. MA and Medicare plans will continue to cover the vaccine and monoclonal antibodies respectively once billed.
Pharmacy Revenue Cycle and Informatics Teams should update the CDM for remdesivir to reflect the new code J0248, injection 1 mg.
Revenue Integrity teams should conduct an audit of any outpatient account who utilized remdesivir from dates of service December 23, 2021 to rebill accounts when used in accordance to the NIH guidelines.
Revenue Integrity and Billing teams should monitor claims to ensure claim processing software at the MAC is accepting the new remdesivir code and may consider holding claims until they process cleanly.
Billing teams should ensure that for dates of service Covid-19 vaccines and monoclonal antibody infusions prior to 2022 were billed to the Original Medicare for payment. Claims logic should be undone to allow for the traditional billing to both MA and Original Medicare.
Our goal is simple; we’re taking complex information and making it practical.
Until our next edition, this is Maxie Friemel and Agatha Nolen providing you with tips for increasing your Pharmacy Revenue.
January is always the biggest quarterly update for HCPCS codes and 2022 is no exception. Some changes are routine with new codes replacing temporary codes and new codes for newly marketed products.
One HCPCS code change caught our attention: Pegfilgrastim.
Since January 1, 2004, pegfilgrastim has been billed with HCPCS code J2505-Injection, pegfilgrastim, 6 mg.
It is curious that when the biosimilars for pegfilgrastim were introduced in June 2018, the products were all assigned brand-specific HCPCS codes with a dose description of 0.5 mg.
CMS has now gotten the codes in “sync” so the innovator is now billed with J2506-Injection, pegfilgrastim, excludes biosimilar, 0.5 mg and code J2505 has been deleted.
This doesn’t sound like a big deal unless the HCPCS code is swapped out without a change in the multiplier. Billing J2506 with a quantity of “1” will result in a 12x underpayment since the HCPCS code needs to be multiplied by 12 to make a 6 mg dose.
Payment rates from Addendum B effective January 1, 2022:
1. Pharmacy and Chargemaster Managers should ensure that new HCPCS code J2506 is linked to pegfilgrastim and for a 6 mg dose the quantity billed is “12”.
2. Revenue Integrity should review a sample of claims with dates of service on or after January 1, 2022 to ensure that when pegfilgrastim 6 mg dose is administered, the claim reflects HCPCS code J2506 with a quantity of “12”.
Our goal is simple; we’re taking complex information and making it practical.
Until our next edition, this is Maxie Friemel and Agatha Nolen providing you with tips for increasing your Pharmacy Revenue.
Pharmacy departments may periodically be asked to compare drug payment with cost, particularly when expensive drugs are utilized on outpatients. It is also important to calculate anticipated revenue when preparing annual budgets.
The ASP (Average Sales Price) file is published by CMS each quarter and can be used to verify payment for Medicare outpatients or commercial contracts which pay based upon Medicare payment. It sounds straightforward, but there is a catch: “sequestration”.
Sequestration is the automatic reduction of federal spending originally established by Congress in the Balanced Budget and Emergency Deficit Control Act of 1985 (BBEDCA, also known as the Gramm-Rudman-Hollings Act). This applies to most areas of the federal budget but was first “triggered” for Medicare in FY2013 resulting in a 2% reduction in Medicare payments to providers over stated payment rates. This 2% reduction has continued each fiscal year until the pandemic when the sequestration was “suspended” meaning there is no current payment reduction and provided receive the full payment.
The Protecting Medicare and American Farmers from Sequester Cuts Act was signed into law on December 10, 2021 and extends the suspension through March 31, 2022. However, the sequestration will be gradually applied once the extension expires. From April 1, 2022 through June 30, 2022, the payment adjustment will be 1% and effective July 1, 2022, the payment adjustment shall return to the 2% for all Medicare Fee-for-service claims. Any changes to this reinstatement would require further Congressional action.
Because Medicare beneficiary co-payments are not subject to the payment reduction, they continue to pay the same co-payment amounts regardless of sequestration. Here’s a formula to use when the “sequestration” suspension begins to expire on April 1, 2022:
((Payment rate-copayment)*0.99)+ copayment
Let’s take a drug example from January 2022. Using Addendum B, we see the following:
Since Addendum B doesn’t have the dose description for this HCPCS code, we can find that information on the ASP file for the quarter:
Denosumab, J0897 has a payment limit of $21.205 per 1 mg effective January 1, 2022 from the ASP file.
Calculating the new payment rate when subject to a 1% sequestration results in the following:
(($21.205-$4.25)*0.99) + $4.25 = $21.035
For a 60 mg dose, the payment difference is $10.173 (($21.205-$21.035)*60))
Note: The rates reflected in Addendum B are “unadjusted copayments” and these co-pay amounts may be different for different providers based upon geographic adjustments.
Pharmacy and Finance should take into consideration if there is a payment “sequestration” triggered when projecting budgets and business plans especially for expensive drugs used on outpatients.
Pharmacy and Finance should be aware of congressional actions which may impact drug payments.
Our goal is simple; we’re taking complex information and making it practical.
Until our next edition, this is Maxie Friemel and Agatha Nolen providing you with tips for increasing your Pharmacy Revenue.
It may seem like unnecessary work to review the items on our Quarterly Checklist each quarter to identify changes and updates. Some tasks may be delegated to other groups such as Chargemaster Managers or Billers, but for one task, pharmacy is the best department to “connect the dots”: Restated Payment Rates.
Our “action to take” recommendation is: “Map restated payments to the effective quarter, determine impact, and rebill as necessary.” We believe that the pharmacy department is in the best position to take this action and in some cases, increase pharmacy revenue. Let’s walk through an example in more depth.
As noted on our Quarterly Checklist, CMS posts “restated payment rates” each quarter. For January 2022, the file has this information:
Here are the steps to process this file to determine impact:
1. Review Addendum B for the appropriate quarter to determine what the posted payment rate was. Since the “payment” column includes the “copay”, it is only necessary to add the payment column from the previous quarter.
2. Calculate the payment difference.
3. Add the “short descriptor” from Addendum B to determine the HCPCS code dose amount.
4. If the “short descriptor” from Addendum B does not include the HCPCS code dose amount, go to the Alpha-Numeric HCPCS File on the HCPCS Quarterly Update page to retrieve the “long description”. Use the HCPCYYYY_MMM_ANWEB_vN.xlsx file.
5. Add prescribing information and calculate the average adult dose using 100 kg or 3M2 for BSA. For every 3 week regimens use 5 potential doses; for every 4 week regimens use 4 potential doses (assumes patient received first dose on first day of quarter).
6. Calculate the average payment difference for one quarter for one patient to determine financial impact of restated rates. In consultation with the Finance Department, Pharmacies should establish policies as to which payment difference amounts are “significant” to determine rebill potential. (In our example for January 2022, some providers would consider the $1320.00 to be significant and review accounts with HCPCS code J9353)
7. When rebill thresholds are met, Pharmacy should estimate the total change in revenue based upon actual patient usage and review potential rebills for the quarter with Finance to obtain authorization for rebilling. (Timely filing for Medicare is one year from date of service but rebills should be generated as soon as authorized).
8. Managed Care Contracting group should be notified to determine if any managed care contract payments are based upon Medicare rates and if rebilling of any commercial/Medicare advantage accounts is warranted.
9. Your completed analysis for finance review will look like this:
1. The Department of Pharmacy is in the best position to evaluate restated payment rates for drugs each quarter and provide information to Finance for potential rebilling opportunities.
2. The Finance Department should determine in advance a “payment threshold difference” which is considered “significant” to warrant further investigation into rebilling opportunities.
3. The Managed Care Contracting group should be notified if any HCPCS codes are selected to be rebilled to determine if any Commercial/Medicare Advantage payments are similarly impacted and to determine if those accounts should similarly be rebilled.
Our goal is simple; we’re taking complex information and making it practical.
Until our next edition, this is Maxie Friemel and Agatha Nolen providing you with tips for increasing your Pharmacy Revenue.
The end of year brings joy and happiness, but it can also be a very busy time for the revenue cycle and finance teams conducting year end closes. Our goal is to keep the information simple and are here to remind you of our Quarterly Update Tool. CMS has published the majority of files for you to start reviewing changes effective January 1, 2022.
The Quarterly Update Tool highlights where the information is located that will be published by CMS. Followed by a column “Action to Take'' that describes how and what to evaluate with each published file. CMS publishes this information and files sporadically; thus, the checklist serves as a tool for users to understand who and when the files were reviewed and acted upon.
Recall CMS updates HCPCS on a calendar quarterly basis. All changes should be updated in the electronic health record by the start of the quarter, also known as the effective date: January 1, April 1, July 1, and October 1.
Pharmacy and Revenue Integrity Teams collaborate to designate a point person(s) that can help monitor for updates and coordinate changes in the health record by the effective date. The Quarterly Update Tool is here to help!
To All! Have a happy and safe holiday!
Our goal is simple; we’re taking complex information and making it practical.
Until our next edition, this is Maxie Friemel and Agatha Nolen providing you with tips for increasing your Pharmacy Revenue.
Have you ever thought the pharmacy charge structure could have been an intro to the Drew Carey Whose Line Is It Anyway? Well, that may be what most people think, but with the new price transparency regulations that are being pushed forward, understanding how the drug charges are set and optimizing the charge structure is more important now than ever. CMS cannot dictate how much a provider charges, which leaves little guidance for hospitals. This edition will walk through at high level some strategies to consider when establishing the pharmacy markup structures.
First and foremost! Charge enough so that the payer negotiated rate covers your actual acquisition cost. This may be a no-brainer, but is a common pitfall. Payer negotiated contracts should be taken into consideration when evaluating if the charge will recoup the cost. Take a deeper look at this simple example:
Payer negotiated rate: 20% of charge
Drug Cost: $1,000
Drug Markup: 1.5 x cost
Gross Charge: $1,500
Reimbursement: $300
This is also true when charged at a flat fee schedule rate to ensure the charge is greater than the fee schedule. If charge is submitted less then the fee schedule, likely you will receive the lesser of the charge or fee schedule rate. This would be dependent on contract language, but emphasizes the importance of understanding payer contracts when evaluating pharmacy charge structure.
Second, keep your strategy simple and justifiable. Markup structures range in complexity from very simple flat markups on cost to multi-cost tiers based on selected drug categories or methods. There are typically some basic elements to most charge structures. If not a straight markup, generally there are some form of categories or methods that drive drugs to selected markup formulas. Then, a base cost is selected (e.g. actual cost, WAC, AWP) and applied markup +/- additional fee.
The multiple NDC, prices and dosages can all impact the charge for a similar drug.
Drug categories or methods should be defined in a manner that can be consistently applied by all pharmacists, technicians or analysts who may build and maintain pharmacy charge records.
Utilize a cost basis that is easily updated and preferably can be an automated process. Various wholesalers and EHR define units of measures differently and can lead to an over or underinflated charge. For example, you may purchase a bottle of 100 tablets as 1 each and dispense each tablet. Ensure you validate the “each” price in the EHR calculates that correct charge based on what is dispensed.
Third, implement a routine maintenance process to ensure base cost is current. Updates or changes to the pharmacy markup structure should be a coordinated effort with the entities chargemaster and finance team. Small changes in drug markups may have large impacts on the hospital's overall gross charge increase.
Review and understand drug markup structure and processes to ensure it is contemporary and definsable.
Keep methodology and markup formulas simple.
Updating pharmacy markup structures is a large undertaking and should be coordinated with the entity's entire chargemaster charge updates.
Our goal is simple; we’re taking complex information and making it practical.
Until our next edition, this is Maxie Friemel and Agatha Nolen providing you with tips for increasing your Pharmacy Revenue.
Hospital pharmacies often carry and dispense dietary supplements and herbal products in order to maintain a patient on their home regimens.
Pharmacies may determine which dietary supplements and herbal products they carry based upon patient needs and internal policies, but they can’t be billed as a drug. What does that mean?
Just like medical devices, dietary supplements and herbal products may be supplied by the pharmacy, but it is important that they NOT be billed as a drug as only drugs and biologicals are billed with revenue codes 25x (250-259) and 63x (631-637).
It is important that these products NOT be set up in chargemasters under a 259 or 637 revenue code as these revenue codes are reserved for “self-administered drugs”. Since dietary supplements are not drugs, they can’t be billed as a self-administered drug and billed to a Medicare outpatient.
Typically, facilities choose one of two options for billing and coding of dietary supplements and herbal products:
Consider them as “supplies” and bill them with revenue code 27x, or
Consider them as “nutritional supplements” including the cost in other services such as room and board on inpatients or within procedure charges for outpatients. A separate charge is not generated for this option.
As we mentioned in our previous newsletter on medical devices, revenue codes are established by the National Uniform Billing Committee (NUBC) and they provide instructions on how they are to be used. All providers must follow the applicable rules from NUBC in billing for healthcare services.
How can I tell if a product is a dietary supplement?
There isn’t a comprehensive database like there is with drugs and the FDA NDC Directory. The easiest way is to look at the package (or Google an image) as these products must be clearly labelled as “dietary supplements”. Dietary supplements are prohibited from having an NDC number, so any 10- or 11-digit number on the package is for tracking only, and is not an NDC number.
1. Pharmacy and Chargemaster Managers should review chargemaster entries to ensure that dietary supplements and herbal products are not billed with “pharmacy” revenue codes (i.e. 259 or 637)
2. Pharmacy should confirm that the set-up process for a new product includes checking to see if the product is a prescription or O-T-C drug, a medical device, a dietary supplement, or an herbal product. Only drugs and biologicals can be billed with pharmacy revenue codes such as 25x and 63x.
3. Pharmacy and Finance should determine if the facility will bill separately for non-drug products under a supply revenue code, 27x, or if they will not be billed separately and the cost will be included in charges for room and board or other procedures. Dietary supplements and herbal products are not drugs, and therefore cannot be billed to the patient as a self-administered drug with revenue code 259 or 637.
Our goal is simple; we’re taking complex information and making it practical.
Until our next edition, this is Maxie Friemel and Agatha Nolen providing you with tips for increasing your Pharmacy Revenue.
A reader inquired about Critical Access Hospitals (CAH), so we have put together a few items that pertain to the intricacies of CAHs and how they differ from the Hospital Outpatient/Inpatient Departments.
CAH are located in rural areas of a State that has established a Medicare rural hospital flexibility program, or located in a Metropolitan Statistical Area (MSA) that is treated as being located in a rural area based on law or regulation of the State. It is required to be more than a 35-mile drive from any other hospital or “necessary provider”. If located in mountainous terrain or areas with only secondary roads, the CAH is only required to be 15 miles from another necessary provider. Additional eligibility criteria include:
Must provide 24-hour emergency care
No more than 25 beds for acute inpatient care or skilled nursing facility swing beds
Maintain an annual average length of stay of no longer than 96 hours
Must be certified by CMS and required to meet the conditions of participations for CAH
The first call out pertaining to CAH, is they are not reimbursed utilizing the inpatient prospective payment system (IPPS) or the outpatient prospective payment system (OPPS). The following reimbursement rules do not apply:
The lesser of cost or charges rule
Ceilings on hospital operating costs
The reasonable compensation equivalent limits for physician services to hospitals
1- and 3- day payment window provisions. In other words, outpatient services provided within the 1- and 3- day payment window will continue to be paid as an outpatient service rather than bundled on the inpatient claim.
Inpatient payment is based upon 101% of reasonable cost or some MACs may pay on a per diem rate. Outpatient payment can be made using one of two methods. Method I (standard option) in which professional services are billed to Part B and reimbursement is 101% of reasonable cost less the deductible and coinsurance amounts. CAHs have the option to elect an alternative payment method or Method II (optional) when professional services are billed to Part A. Payment is the sum of the 101% of the reasonable cost of the facility services and 115% of the Medicare Physician Fee Schedule (MPFS) for professional services, less any deductible or coinsurance. Refer to the respective MAC regarding billing guidance.
CAH, while generally 340B eligible, are not required to report the TB or JG modifiers as we have discussed in a previous newsletter. CAH are not subject to regulations of the HOPPS; thus, regardless of payment methods chosen, they are not subject to the ASP reduction.
Health systems big or small should understand the differences and regulations when billing CAH from other hospital or physician departments.
Our goal is simple; we’re taking complex information and making it practical.
Until our next edition, this is Maxie Friemel and Agatha Nolen providing you with tips for increasing your Pharmacy Revenue.
Pharmacy Revenue Cycle News has brought you 61 tips to increase your pharmacy revenue since it was launched in September 2020. Since then, we’ve had over 13,000 visits to our website with 278 subscribers! Thank you to our loyal subscribers! Our website is also a repository for regulatory information including billing and compliance information for hospitals, ambulatory surgery centers and physician offices. You can search the entire website here: https://www.pharmacyrevenuecycle.com/search-and-index.
We’ve learned that some newsletters are more widely read than others. Our Top 5 newsletters of all time are:
Don’t Let Rabies Take a Bite Out of Your Revenue! (1,323 visits)
CAR T-cell Therapy: Coverage and Billing for Outpatients (1,136 visits)
New Technology Add-on Payments (NTAP) (953 visits)
Billing for Pharmacists’ Services provided in a Hospital Outpatient Department (706 visits)
What about M1145? Don’t miss out on drug revenue (618 visits)
We also have news! We are pleased to announce that Pharmacy Revenue Cycle will be joining forces with Visante in the coming weeks! Visante is a multidisciplinary, clinician-composed consulting firm specializing in transforming healthcare through pharmacy. Visante’s goal is to diagnose and solve complex problems, and our website, Pharmacy Revenue Cycle was created to make complex billing and coding issues more simple: it’s a natural fit!
We plan to transition our subscribers seamlessly over the next few weeks so you will continue to receive Pharmacy Revenue Cycle News on its regular publication schedule. As always, if you would like to stop receiving our Newsletter, send a quick note to agatha@pharmacyrevenuecycle.com or maxie.friemel@pharmacyrevenuecycle.com and we’ll remove you from future emails.
Thank you to our loyal subscribers. We’ve had great feedback in our first year and we hope to bring you useful information on increasing your pharmacy revenue for years to come!
Maxie & Agatha
Our goal is simple; we’re taking complex information and making it practical.
Until our next edition, this is Maxie Friemel and Agatha Nolen providing you with tips for increasing your Pharmacy Revenue.
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