November 19, 2013

Drill Down: Drugs and Biologics: Over/Underpayments

By

alert-powered-by-decision-health

RAC Region D contractor HDI posted a review issue for Outpatient Hospital provider types regarding both excessive units billed and underpayments for Drugs and Biologics. I have previously written about maximum drug and biologics allowable units in my August 6, 2013, Drill Down article. This issue seems to continue to plague providers in all RAC regions. You can link to my previous article here: http://racmonitor.com/rac-enews/1478-drill-down-maximum-allowable-units.html. Some overpayments may be discarded drug wastage that was billed incorrectly.

Per the contractor’s description of this issue:

Drugs and Biologicals should be billed in multiples of the dosage specified in the HCPCS code long descriptor. The number of units billed must accurately represent the dosage increment specified in the HCPCS long descriptor, and correspond to the actual amount of the drug administered to the patient, including any appropriately discarded drug wastage. If the drug dose used in the care of a patient is not a multiple of the HCPCS code dosage descriptor, the provider rounds to the next highest unit. Billable drug wastage should be coded according to the requirements of the local contractor. Claims billed with medically unlikely billed units will be reviewed to determine the correct number of billable/payable units.Claims billed with units below the approved compendia diagnosis specific dosing guideline minimums will be reviewed to determine the correct number of billable/payable units.

The contractor references the CMS Pub-100-04 Claims Processing Manual Chapter 17, Section 40 for billing of discarded drugs and biologics:

40 - Discarded Drugs and Biologicals

The CMS encourages physicians, hospitals, and other providers and suppliers to care for and administer to patients in such a way that they can use drugs or biologicals most efficiently, in a clinically appropriate manner.

When a physician, hospital or other provider or supplier must discard the remainder of a single-use vial or other single-use package after administering a dose/quantity of the drug or biological to a Medicare patient, the program provides payment for the amount of drug or biological discarded as well as the dose administered, up to the amount of the drug or biological as indicated on the vial or package label.

When processing claims for drugs and biologicals (except those provided under the Competitive Acquisition Program for Part B drugs and biologicals (CAP)), local contractors may require the use of the modifier JW to identify unused drug or biologicals from single-use vials or single-use packages that are appropriately discarded. This modifier, billed on a separate line, will provide payment for the amount of discarded drug or biological. For example, a single-use vial that is labeled to contain 100 units of a drug has 95 units administered to the patient and 5 units discarded. The 95-unit dose is billed on one line, while the discarded 5 units may be billed on another line by using the JW modifier. Both line items would be processed for payment.

The JW modifier is only applied to the amount of drug or biological that is discarded. A situation in which the JW modifier is not permitted is when the actual dose of the drug or biological administered is less than the billing unit. For example, one billing unit for a drug is equal to 10mg of the drug in a single-use vial. A 7mg dose is administered to a patient while 3mg of the remaining drug is discarded. The 7mg dose is billed using one billing unit that represents 10mg on a single line item. The single line item of 1 unit would be processed for payment of the total 10mg of drug administered and discarded. Billing another unit on a separate line item with the JW modifier for the discarded 3mg of drug is not permitted because it would result in overpayment. Therefore, when the billing unit is equal to or greater than the total actual dose and the amount discarded, the use of the JW modifier is not permitted.

The JW modifier is not used on claims for CAP drugs. For CAP drugs, see subsection 100.2.9 - Submission of Claims With the Modifier JW, “Drug or Biological Amount Discarded/Not Administered to Any Patient,” for additional discussion of the discarded remainder of a vial or other packaged drug or biological in the CAP.

NOTE: Multi-use vials are not subject to payment for discarded amounts of drug or biological.

RAC Issues for the Week of November 18 – November 22, 2013:

RAC Region A Performant

Physician/Non-Physician Practitioner

  • Mohs Micrographic Surgery (MMS) with Pathology Different Providers – JK - Mohs Micrographic Surgery (MMS) requires a single surgeon to act in two distinct roles: surgeon and pathologist. When the preparation and interpretation of the slides of tissue taken during the surgery are performed by someone other than the surgeon, then MMS may not be billed.
  • Mohs Micrographic Surgery (MMS) with Pathology Different Providers – JL - Mohs Micrographic Surgery (MMS) requires a single surgeon to act in two distinct roles: surgeon and pathologist. When the preparation and interpretation of the slides of tissue taken during the surgery are performed by someone other than the surgeon, then MMS may not be billed.
  • Observation Care Admission and Discharge Same Date – JL - When a patient receives observation care for a minimum of 8 hours, but less than 24 hours, and is discharged on the same calendar date, observation care services (including admission and discharge services) should be reported with CPT code 99234, 99235 or 99236. The initial observation care or observation discharge CPT codes 99217, 99218, 99219 and 99220 should not be reported.

RAC Region D HDI

Outpatient Hospital

  • Medically Unlikely Billed Doses of Drugs - Underpayment – Outpatient - Drugs and Biologicals should be billed in multiples of the dosage specified in the HCPCS code descriptor. The number of units billed should be assigned based on the dosage increment specified in that HCPCS long descriptor, and correspond to the actual amount of the drug administered to the patient, including any appropriate, discarded drug waste. If the drug dose used in the care of a patient is not a multiple of the HCPCS code dosage descriptor, the provider rounds to the next highest unit. Drug waste should be coded and documented according to the requirements of the local contractor. Claims billed with units below the approved compendia diagnosis specific dosing guideline minimums will be reviewed to determine the correct number of billable/payable units.

About the Author

Dr. Margaret Klasa is the medical director for Context4 Healthcare. She is responsible for the company’s business knowledge discovery unit for medical context as it relates to the daily development of data products and software for medical claims editing and coding, with an emphasis on clinical and regulatory guidelines for Medicare, Medicaid and commercial payers.

Contact the Author

Margaret.Klasa@context4.com

To comment on this article please go to editor@racmonitor.com

Margaret Klasa, DC, APN, Bc

This email address is being protected from spambots. You need JavaScript enabled to view it.