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    Medicare Part B drug billing revisited

    How proposed demonstration project and a possible change in ‘brown bag’ rules may affect your practice


    The real question is: What does this mean for your practice? For once, it does not mean a guaranteed loss for all urologists. In fact, for the low-price Part B drugs, the change will provide an increase in income. The higher the price of the drug, the more significant the profit loss. The question is, will the losses exceed the gains? The break-even is calculated to be for drugs with an acquisition cost of $480. The effect on your practice will be determined by the mix of drugs you provide to your patients and your choices moving forward.

    Read - T pellets: What are you allowed to charge?

    How many urologists will change what they do? How will this affect patient care and compliance? Will this accomplish the goals identified by CMS? Due to the number of unanswered questions and the stated goals of the program, there is a significant push to block this plan by a number of specialties, including urology in the form of the AUA. The outcome is unknown at the time of writing of this article. Be prepared and stay tuned, and if you feel this is bad for urology and your practice, write your representative in Congress.

    ‘Brown bag’ changes

    Brown bag rules have changed, or, at least they have been pushed in a new direction. “Brown bagging” is the name that has been give to the practice of having a patient acquire a drug via prescription that should be administered by a physician. The patient then brings the drug to the office and has the drug administered appropriately. Several medical directors are adamant that CMS has handed down an ultimatum that injection codes will not be paid unless accompanied by a charge for the drug injected. Noridian, one of the Medicare carriers, has noted the reimbursement change in a Local Coverage article, “Chemotherapy Administration” (last updated June 30, 2016).

    Patients supplying their own drugs

    The physician practice or hospital must incur a cost for the drug or biological which is then administered by the physician or by auxiliary personnel employed by the practice or hospital and under the physician's personal supervision.

    Per the "incident to" guidelines explained above and in the Medicare Benefit Policy Manual, CMS Internet-Only Manual (IOM) Publication 100-02, Chapter 15, Sections 50 and 50.3 MBPM, providers are not allowed to instruct patients to purchase a drug themselves and bring it to the provider's office for administration. Claims that are billed with the chemotherapy administration codes 96401-96549 that do not have an associated drug in claim history, will deny. When the administration claim is processing, an allowed claim for the drug must be present, either on a prior claim or on the same claim as the administration. For further information on the rare circumstances where it may be appropriate to submit a claim for a drug administration where the provider has not incurred the expense for the drug, see the separate Noridian article "Patients Supplying Their Own Drugs"

    The referred-to article can be found on the Noridian website (med.noridianmedicare.com) or in the CMS coverage database (www.cms.gov/medicare-coverage-database/; place article ID A55044 in search tab of coverage database). It states:

    Donated or Free of Charge Patient Supplied Drug

    To avoid a chemotherapy or other drug administration code denial, a drug code must be present on the same or prior claim. Include the below information in the appropriate CMS-1500 claim form Items or electronic equivalents.

    • Item 19: Enter ‘Drug Donated;’ Enter code description, strength and dosage - if billing a Not Otherwise Classified (NOC) HCPCS code
    • Item 24D: Enter drug (HCPCS) code
    • Item 28: Enter $0.01 for the billed amount.

    This will allow the claim processing system to register the drug claim as being allowed which should allow the administration.

    As mentioned, we were told that this was CMS policy and not just Noridian. However, we have not confirmed this with other carriers, nor have we seen this policy adopted by others.

    The interpretation of the reference above to the MBPM chapter 15 paragraphs 50 and 50.3 are somewhat in conflict with paragraph 60.1 of the same document:

    60.1 - Incident To Physician’s Professional Services

    (Rev. 1, 10-01-03)


    A - Commonly Furnished in Physicians’ Offices

    For example, where a patient purchases a drug and the physician administers it; the cost of the drug is not covered. However, the administration of the drug, regardless of the source, is a service that represents an expense to the physician. Therefore, administration of the drug is payable if the drug would have been covered if the physician purchased it.

    Also see - Open Payments: How urology measures up

    We were also told that changes in the rules, which result in apparent conflict among Medicare rule sets, do not block the change from being implemented. Nevertheless, the conflict does exist; therefore, we would recommend you check with your carrier for their position on paying for injections without a charge for the drug. If you are in a region for which your carrier has adopted this policy, we encourage you to follow their rules; do not ask a patient to buy their own drugs and bring them to your office. However, if you’re requested to inject a drug that you did not buy, charge according to the process recommendations above, and be prepared to appeal.

    Next: Watch your processes

    Ray Painter, MD
    Urologist Ray Painter, MD, is president of Physician Reimbursement Systems, Inc., in Denver, and is also publisher of Urology Coding and ...
    Mark Painter
    Mark Painter is CEO of PRS Urology SC in Denver.


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