(Medicare Claims Processing Manual)

Section 90 relates specifically to billing for hospital outpatients.  The remainder of this chapter relates to procedures for pricing and paying DME recipients, and to beneficiaries who receive drugs under special benefits such as pneumococcal, flu and hepatitis vaccines; clotting factors, immunosuppressive therapy, self administered cancer and anti emetic drugs, and drugs incident to physicians  services.   The Medicare Prescription Drug, Improvement, and Modernization Act (MMA) of 2003 defines a Specified Covered Outpatient Drug (SCOD) as a covered outpatient drug for which a separate APC has been established and that is either a radiopharmaceutical agent, o r a drug or biological for which payment was made on a pass -through basis on or before December 31, 2002.  Payment for SCODs is set, by law, at the average acquisition cost.  Under the OPPS, a single payment is made for SCODs that represents payment for both the acquisition cost of the drug and any associated pharmacy overhead or nuclear medicine handling costs.  Drugs or biologicals must meet the coverage requirements in Chapter 15 of the Medicare Benefit Policy Manual.  Additionally, for end stage renal disease (ESRD) patients, see the Medicare Benefit Policy Manual, Chapter 11.  For ESRD patient billing for drugs and claims processing, see Chapter 8 of this manual.   The following chart describes the general payment provisions for drugs.  Table - Drug Payment Methodology Key to the following Table:  NOTES:  DME MACs do not process claims for blood clotting factors.  Unless noted otherwise, claims for these drugs are submitted to the A/B MAC (B)   - Drugs & biologicals outside the composite rate and/or ESRD PPS are paid as described in 2 below. Those inside the composite rate and/or ESRD PPS are paid as described in 1. (ESRD PPS effective January 1, 2011)  1 - Included in PPS rate, or other provider -type all inclusive encounter rate  2  Price taken from CMS drug/biological pricing file effective on the specific date of service.  3 - Based on reasonable cost (101% reasonable cost in CAH)  4 - Lower of cost or 95% AWP paid for drug in addition to PPS rate, or in addition to reasonable cost if excluded from PPS  5 - OPPS- APC, whether pass -thru drug or not  6 - Cannot furnish as that provider type  7 - May not bill DME -MAC or MAC for drugs furnished incident -to a physicians service  8 - Payment made at the time of cost settlement  A - Bills are submitted to the DME MAC  ++  Except  in the State of Washington, where CMS permits the ESRD Facility to bill for immunosuppressive drugs due to the unique State assistance to the beneficiary provided only via the ESRD Facility.   Provider/Drug  Hepatitis  Vaccine Pneumococcal &  Flu Vaccines  Hemophilia Clotting  Factors  Immuno -Suppressive Erythrop  oiesis  Stimulati  ng Agents  ESAs)  Self Admin  Anti -Cancer Anti -Emetic for cancer  treatment  Other Drugs  Hospital Inpatient (IP) A -Prospective Payment System (IPPS)  3 3 2 1 1 1 1 Hospital IP A -  not IPPS  3 3 3 3 3 3 3 Hospital IP B -  Outpatient Prospective 3 3 5 5 5 5 5 Payment System (OPPS)  Hospital IP B -  not OPPS hospital  3 3 3 3 3 3 3 Hospital Outpatient (OP) - OPPS hospital  3 3 5 5 (8 - for 30-day supply)  5 5 5 Hospital OP -  not OPPS hospital  3 3 3 3 (8 - for 30-day supply)  3 3 5 Skilled Nursing Facility (SNF) IP  3 3 1 1 1 1 1 SNF OP or IP B  3 3 3 3 6 6 6 End Stage Renal Disease (ESRD) Facility  2 2 6 6++ 1 or 2  6 1 or 2  Comprehensive Outpatient Rehabilitation Facility (CORF)/ Outpatient Rehabilitation Facility (ORF)  2 2 6 6 6 6 6 Community Mental Health Clinic (CMHC)  6 6 6 6 6 6 6 Rural Health Clinical (RHC)/Federally Qualified Health Clinic (FQHC) -hospital based 1 8 5 5 5 5 5 RHC/FQHC -independent  1 8 6 6 6 6 6 Home Health Agencies  3 3 6 6 6 6 6  Hospice  6 6 6 6 1 1 1 Physicians  2 2 2 2 2 2 2 Pharmacy  2 2 2, 7 2, A 2 2, A 2, 7 Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) Supplier  2 2 2 2 2 2  2 Critical Access Hospital (CAH) IP A or B  3 3 3 3 3 3 3 CAH OP -Method I or II  3 3 3 3 (8 - for 30-day supply)  3 3 3   NOTES:   Independent and provider -based  RHCs and FQHCs generally do not bill for pneumococcal/influenza vaccines, except when the only service involved is the administration of the vaccine.  Instead, RHCs/FQHCs are generally paid for pneumococcal/influenza vaccines at cost settlement via the Medicare cost report.  Hepatitis B vaccine payment is bundled into the encounter rate for both Independent and provider -based  RHCs and FQHCs.   Influenza, pneumococcal, and Hepatitis B vaccines are paid on a reasonable cost basis in a hospital outpatient department.  Neither deductible nor coinsurance apply.   HHAs cannot bill for vaccines, except on TOB 34X, since vaccines are not part of the HH benefit and cannot be paid under HH PPS.   Influenza, PPV, and Hepatitis B vaccines are paid once for the vaccine and once for the administration of the vaccine.  The provider or supplier (including physician) must enter each of the HCPCS on separate lines of the claim.   A Part B blood clotting factor claim from a Part B supplier is processed by the A/B MAC (B) .  A Part A blood clotting factor claim from a Part A provider, including a hospital -based hemophilia center, is processed by the hospitals Medicare contractor.   20 - Payment Allowance Limit for Drugs and Biologicals Not Paid on a Cost or Prospective Payment Basis (Rev. 131, 03- 26-04)  Prior to January 1, 2004, drugs and biologicals not paid on cost or prospective payment are paid based on the lower of the billed charge or 95 percent of the average wholesale price (AWP) as reflected in published sources (e.g., Red Book, Price Alert, etc.).  Examples of drugs that are paid on this basis include, but are not limited to, drugs furnished incident to a physicians service, immunosuppressive drugs furnished by pharmacies, drugs furnished by pharmacies under the durable medical equipment benefit , covered oral anticancer drugs, and blood clotting factors.   The Medicare Prescription Drug, Improvement, and Modernization Act of 2003, changed the basis for payment of drugs and biologicals not paid on a cost or prospective payment basis. For January 1, 2004, through December 31, 2004, such drugs or biologicals ar e paid as described below:    The payment limits for blood clotting factors will be 95 percent of the AWP.   The payment limits for new drugs or biologicals will be 95 percent of the AWP.  A new drug is defined as an unlisted drug (not currently covered by a HCPCS code) that was FDA approved subsequent to April 1, 2003.  A drug would not be considered new if:   o the brand or manufacturer of the drug changed;  o a new formulation of the vial size is developed; or  o the drug received a new indication.   The payment limits for pneumococcal and hepatitis B drugs and biologicals will be 95 percent of the AWP.    The payment limits for certain drugs studied by the OIG and GAO are based on the percentages of the April 1, 2003 AWPs specified on Table 1 below.    The payment limits for infusion drugs furnished through an item of implanted durable medical equipment on or after January 1, 2004, will be 95 percent of the October 1, 2003 AWP.   Drugs and biologicals not described above are paid at 85 percent of the April 1, 2003 AWP .  Payment limits determined under this instruction shall not be updated during 2004. Table 1: Percentages of April 1, 2003 AWP for Selected Drugs   HCPCS  Applicable Percentage  J0640  80 J1100  86 J1260  80 J1440  81 J1441  81 J1561/J1563  80 J1626  80 J1642  80 J2405  87 J2430  85 J2820  80 J7320  82 J7517  86 J7608  80 J7619  80 J7631  80 J7644  80 J8520/J8521*  90 J9000  80 J9045  81 J9170  80 J9201  80 J9202  80 J9206  80 J9217  81 J9265  81 J9310  81 J9350  84 J9390  81 Q0136  87  * Use the following NDC numbers when processing claims:    00004- 1100- 20  150 mg  00004- 1100- 51  150 mg  00004- 1101- 16  500mg  00004- 1101- 50  500mg  20.1 - MMA Drug Pricing - Average Sales Price  (Rev. 1513; Issued:  05- 23-08; Effective/Implementation Date:  06 -23-08)  In general, CMS establishes a single, national payment limit for A/B MAC (A), A/B MAC (B), A/B MAC (HHH) and DME MAC payment for each Medicare- covered drug whose payment is determined based on the methodology described above.  Drugs billed to DME MACs are still priced locally, albeit under the new statutory formula, as applicable.  The four DME MACs jointly establish drug payment limits for drugs that are billed to DME MACs.   The CMS provides an ASP file to each MAC for pricing drugs.  Each MAC must accept the ASP files made available by CMS for pricing bills/claims for any drug identified on the price files.  The ASP drug pricing file shall contain 3 places after the decimal point in the currency field for the ASP file and contractors shall load the ASP file including 3 places after the decimal point.  Contractors shall carry 3 places after the decimal point fo r the calculation of the amount due for a line item for each covered drug, then follow standard rounding procedures in determining the final allowance for that line item.  The final  allowed amounts will continue to carry 2 places after the decimal point.   The payment limits included in the revised ASP and Not Otherwise Classified (NOC) payment files supersede the payment limits for these codes in any publication published prior to this document.  20.1.1 - Online Pricing Files for Average Sales Price  (Rev. 509, Issued: 03- 18-05; Effective:  07 -01-05; Implementation: 07 -05-05)  Beginning July1, 2005, the standard for the number of online pricing files maintained by DME MACs for determining the applicable allowed amount for paying drug claims is eight fee screens/pricing files for Part B drugs billed to DME MACs for payment on a f ee-for-service basis.   20.1.2 - Average Sales Price (ASP) Payment Methodology (Rev. 3292, Issued: 07- 10-15, Effective: 07 -01-15, Implementation: 07- 06-15)