MIR-2006-6AB, June 2006

Prospective Payment System (PPS) Payment for Blood Clotting Factors Administered to Hemophilia Inpatients

Provider Types Affected
Providers billing fiscal intermediaries (FIs) for services related to blood clotting factors administered to hemophilia inpatients

Provider Action Needed
This article is based on Change Request (CR) 4229, which clarifies the pricing methodologies used for blood clotting factors. It is especially important to point out that the provider determines the dosage furnished to the patient and, using the definition of the appropriate HCPCS code, translates the dosage into units of service on the claim submitted to Medicare.

Background
The Centers for Medicare & Medicaid Services (CMS) provided CR4229 to clarify billing practices for providers to ensure that units of service for blood clotting factor are reported accurately. Some Medicare providers have been billing units of drugs and biologicals incorrectly on outpatient bills as well as on inpatient claims for hemophilia clotting factors. The erroneous reporting of units of service has resulted in Medicare overpayments.

The examples below include the Healthcare Common Procedure Coding System (HCPCS) code, and indicate the dosage amount specified in the descriptor of that HCPCS code. Facilities are instructed to use the unit’s field as a multiplier to arrive at the dosage amount.

Example 1

When the dosage amount is greater than the amount indicated for the HCPCS code, the facility rounds up to determine units. When the dosage amount is less than the amount indicated for the HCPCS code, use one as the unit of measure.

Example 2

Example 3

At times, a facility provides less than the amount provided in a single use vial and there is waste, i.e., some drugs may be available only in packaged amounts that exceed the needs of an individual patient. Once the drug is reconstituted in the hospital’s pharmacy, it may have a limited shelf life.

Since an individual patient may receive less than the fully reconstituted amount, CMS encourages hospitals to schedule patients in such a way that the hospital can use the drug most efficiently. However, if the hospital must discard the remainder of a vial after administering part of it to a Medicare patient, the provider may bill for the amount of drug discarded plus with the amount administered, as illustrated in Examples 4 and 5.

Example 4
Drug X is available only in a 100-unit size. A hospital schedules three Medicare patients to receive drug X on the same day within the designated shelf life of the product. An appropriate hospital staff member administers 30 units to each patient. The remaining ten units are billed to Medicare on the account of the last patient. Therefore:

• 30 units are billed on behalf of the first patient seen;
• 30 units are billed on behalf of the second patient seen; and
• 40 units are billed on behalf of the last patient seen because the hospital had to discard 10 units at that point.

Example 5
Drug X is available only in a 100-unit size. An appropriate hospital staff member must administer 30 units of drug X to a Medicare patient, and it is not practical to schedule another patient who requires the same drug.

For example, the hospital has only one patient who requires drug X, or the hospital sees the patient for the first time and did not know the patient’s condition. The hospital bills for 100 units on behalf of the patient, and Medicare pays for 100 units.

Additional Requirements
CR4229 further instructs your intermediary to:

• Calculate the payment amount and subtract the charge from those submitted to Pricer so that the clotting factor charges are not included in cost outlier computations;
• Use the blood-clotting factors HCPCS codes from the Medicare Part B Drug Pricing File, which is made available on a quarterly basis;
• Use the Average Sales Price (ASP) plus six percent to make payment to facilities that are not paid on cost or Prospective Payment System (PPS);
• Pay for hemophilia clotting factors during a covered part A stay in a PPS hospital at ASP plus six percent in addition to the Diagnosis Related Group (DRG) payment;
• Pay the Ambulatory Patient Classification (APC) rate to Outpatient Prospective Payment System (OPPS) hospitals for hemophilia clotting factors administered in inpatient Part B and outpatient settings;
• Pay for hemophilia clotting factors to beneficiaries based on cost for Part B skilled nursing facility (SNF) services, including inpatient Part B, and all such factors administered by critical access hospitals (CAHs);
• Pay for hemophilia clotting factors based on cost for non-PPS swing bed services; and
• Not pay a separate add-on under SNF PPS for SNF or swing bed services.

Providers should no longer divide the number of units by 100 when billing for clotting factors.

Implementation
The implementation date for the instruction is July 14, 2006.

Additional Information
For complete details, please see the official instruction issued to your intermediary regarding this change. That instruction may be viewed at http://www.cms.hhs.gov/Transmittals/downloads/R903CP.pdf    on the CMS Web site.

If you have any questions, please contact your intermediary at their toll-free number, which may be found at http://www.cms.hhs.gov/apps/contacts/   on the CMS Web site.

Disclaimer
This article was prepared as a service to the public and is not intended to grant rights or impose obligations. This article may contain references or links to statutes, regulations, or other policy materials. The information provided is only intended to be a general summary. It is not intended to take the place of either the written law or regulations. We encourage readers to review the specific statutes, regulations and other interpretive materials for a full and accurate statement of their contents.

MLN Matters Number: MM4229
Pub. 100-4, Transmittal# R903CP, CR# 4229
Related CR Release Date: April 14, 2006
Effective Date: July 14, 2006
Implementation Date: July 14, 2006

Additional Information Provided by Empire Medicare Services
Effective with this CR, all inpatient add-on billing of hemophilia clotting factor codes should be billed based on the HCPCS code narrative description. This means that no division of billed units is required for proper payment. For PPS claims, payment will be based on the quarterly ASP (Average Sales Price) plus six percent effective for discharge dates on and after July 14, 2006.

Anti-clotting Factor HCPCS Codes include:

Claim Examples:

TOB 111, Dates of service = 050106-071106 (Discharge date), HCPCS code J7190 administered 50,000 units is billed as REV code 636, HCPCS J7190 units = 500.

TOB 111, Dates of service = 060106-072106 (Discharge date), HCPCS code J7190 administered 50,000 units is billed as REV code 636, HCPCS J7190 units = 50,000.

All discharge dates prior to July 14, 2006 should continue to be billed with international units divided by 100.