June 6, 2013

Spring Cleaning: Multi-Use Vial Charging Practices

By Chritina Panos

The reporting of hospital outpatient services in accordance with published coding rules and Medicare guidance is under the microscope today, specifically as it pertains to units of service. Recovery Audit Contractors (RACs) are reviewing issues such as:

  • The reporting of chemotherapy, drug and hydration administration services;
  • The units reported for bronchoscopy, cataract, colonoscopy and transfusion services;
  • The units reported for untimed codes;
  • Billable units for drugs; and
  • The billing for drug wastage associated with multi-use vials. 

In addition to the RAC auditors, the Office of Inspector General (OIG) specifically has been reviewing billing practices for multi-use vials of Herceptin.

While Medicare policy does allow for the payment of drug wastage in single-use vials, as defined in Chapter 17, Section 40 of the Medicare Claims Processing Manual (Pub. 100-04), Medicare does not pay for any discarded amounts associated with multi-use vials. Therefore, hospitals only can bill and be paid for the actual amount administered to a patient when a multi-use vial is utilized. In the case of Herceptin (Trastuzumab), which is distributed in 440-mg multi-use vials and used in the adjuvant and metastatic treatment of breast cancers in accordance with FDA labeling, billing in increments of the entire vial creates an obvious red flag.

A recent OIG report on Medicare Jurisdiction 7 in April indicated that Medicare contractors’ payments to providers were often incorrect, with payments inappropriately made for full vials of Herceptin. As HCPCS code J9355 (Injection, Trastuzumab, 10 mg) is reported in increments of 10 mg when billing for Herceptin, the focus of this OIG investigation was on line items billed in increments of the entire vial (44, 88, 132, or 176 units). A total of 1,607 of 5,796 billed line items of Herceptin were in question during the review period, and the audit revealed that 91 percent of the line items reviewed (1,466 of the 1,607) were determined to be incorrect. This resulted in an estimated $1,753,744 in overpayments made by the Jurisdiction 7 contractor (additional overpayments still were being determined at the time of the report).  

This audit was part of a nationwide review of Herceptin by the OIG; several of the other jurisdictions reviewed had similar findings, as detailed in the table below:

Jurisdiction

Incorrect Line Items

Reviewed Line Items

Error Rate

Overpayment Identified

ALL

2,609

2,947

89%

$3,056,167

J1

1,498

2,005

75%

$1,731,460

J2

487

714

68%

$567,008

J3

399

634

63%

$404,746

J4

1,349

1,701

79%

$1,777,877

J5

540

665

81%

$635,023

J6

368

464

79%

$556,908

J6 &8

558

713

78%

$682,748

J6, 8 & 15

3,093

3,966

78%

$3,351,807

J7

1,466

1,607

91%

$1,753,744

J9

1,043

1,330

78%

$1,315,409

J10

936

1,165

80%

$1,194,647

J11

2,029

2,507

81%

$2,397,839

J12

1,165

1,454

80%

$1,576,374

J12 MD

319

1,113

29%

$351,904

J14

391

853

46%

$403,396

J15

916

1,073

85%

$1,151,915

 


 

In a review of 17 of the audit reports on the various jurisdictions, it was noted that 77 percent of the overall line items reviewed were determined to be incorrect, resulting in an overall overpayment of more than $22.9 million. While these reviews clearly indicate a nationwide issue with the billing of Herceptin, they may be a symptom of a potentially larger issue associated with billing and payment practices for multi-use vials.

With summer rapidly approaching, now might be the perfect time to do some spring cleaning. Providers, especially hospitals, should consider performing a comprehensive evaluation of their billing practices, not only for Herceptin, but for other drugs when utilizing multi-use vials. Providers should take this as an opportunity to eliminate any potential issues, to identify opportunities to improve current charging practices, and to institute additional controls. 

The size and complexity of the hospital formulary, the pharmacy system and the associated charge description master (CDM) items are such that an evaluation of this nature cannot focus solely on the back end and involve charge master staff alone. It will require full collaboration with the pharmacy as well as other key staff within your organization. Providers must understand all associated processes, from charge establishment in the CDM to pharmacy charge generation on the bill; therefore, a multi-disciplinary task force devoted to this review will work best.

To facilitate this review, pharmacy identification of the population of multi-use vials utilized by the organization and of the associated CDM items will be a crucial first step in the process. It also will be important for the task force to understand current practices. Specifically, they will need to have an understanding of:

  • The CDM development processes;
  • What triggers pharmacy charge generation and all steps involved in the process;
  • How the units of each pharmaceutical are identified and passed to the bill;
  • Whether multipliers are used within the CDM, within the pharmacy system, within the clinical systems, or within any interfaces; and 
  • Who is involved in the charge generation process (the administering nurse, dispensing pharmacist, etc.) and their specific roles.

As most CDMs (as well as other integrated systems) provide a mechanism to hardcode or calculate a multiplier when the CDM item is charged, thus converting  the units charged to billable units that reflect the CDM dosage based on HCPCS code increments, providers should quickly identify such logic being used with any of the CDMs associated with multi-use vials. These items should be prioritized for review. As in the case of multi-use vials, the use of multipliers within the CDM or any other system often results in noncompliant billing practices. 

Additionally, for all multi-use vials the team should map out the process for which billable units are determined. This should include the parties involved in the process and should define what actions trigger the billable units in all scenarios. The review should validate that the organization’s processes support billing only for the amount of the multi-use drug vial administered to each patient, based on increments listed in the appropriate HCPCS code, and that this does not include any drug wastage. In instances in which this is not the case, action planning should commence to rectify the situation. 

Lastly, organizations need to ensure that ongoing processes and controls are in place when establishing charging mechanisms for new medications. Information provided to the CDM staff about any new pharmaceutical product should include specific details about the dosage (including use of single doses versus multi-use vials).  Multipliers should not be used for multi-use vials, and the pharmacy/clinical staff must establish processes to send units to the bill reflecting the appropriate administered dose when multi-use vials are utilized. 

Healthcare is constantly evolving: code set revisions routinely occur, methodologies change, new technologies appear and purchasing practices are altered (including purchasing of single doses versus multi-use vials). Therefore, keeping not only the CDM, but also your charge capture processes clean and accurate requires ongoing attention. Periodic review of the CDM and associated charging mechanisms should occur routinely within every organization, each review should be planned carefully.

Why not take the opportunity now to plan your spring cleaning!

About the Author

Christina Panos is currently a Sales Engineer/ Customer Success Manager for Coding, Regulatory and Reimbursement software solutions. She has over twenty years of Revenue Cycle experience. Prior to joining Wolters Kluwer, Christina served as a Director of Patient Financial Services for West Penn Allegheny Health System (WPAHS) where she most recently had direct oversight of the multi-hospital System CDMs and charge capture initiatives.

© 2013 CCH Incorporated

Contact the Author

Christina.Panos@wolterskluwer.com

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

References:

U.S. Department of Health and Human Services Office of Inspector General Audit Reports:

Audit #

Audit Report Date

A-05-11-00114

February 19, 2013

A-09-12-02069

February 13, 2013

A-09-12-02003

November 6, 2012

A-07-12-04186

November 20, 2012

A-06-12-00001

December 3, 2012

A-07-12-04187

October 23, 2012

A-05-12-00010

July 27, 2012

A-05-11-00112

December 13, 2012

Audit #

Audit Report Date

A-05-10-00091

July 10, 2012

A-06-11-00068

April 23, 2013

A-04-12-06146

January 7, 2013

A-04-12-03070

January 25, 2013

A-03-11-00013

August 10, 2012

A-03-11-00014

July 31, 2012

A-03-12-00014

August 16, 2012

A-01-11-00539

August 17, 2012

A-05-12-00017

December 21, 2012