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Drugs, Biologicals and Injections

Hospitals and providers are reminded to ensure that units of drugs or biologicals administered to patients are accurately reported in terms of the dosage/units specified in the complete HCPCS code descriptor. Prior to submitting Medicare claims for drugs or biologicals, it is extremely important to review the complete long descriptors for the applicable HCPCS codes. Providers and hospitals should not bill the units based on the way the drug is packaged, stored or stocked.

Audit Findings - OIG

Recent OIG audit findings indicate a problem with providers correctly coding the number of units billed with drug and biological charges. Below are examples of drugs and biologicals HCPCS codes, code descriptions and information on units to illustrate and assist in proper billing.

HCPCS Level II Code Code Description Units
J0885 Injection, epoetin alfa (for non-ESRD use), 1000 units 1 unit per 1000 units
J1745 Injection, infliximab, 10 mg 1 unit per 10 mgs
J2805 Injection, sincalide, 5 mcg 1 unit per 5 mcgs
J9395 Injection, fulvestrant, 25 mg 1 unit per 25 mgs

Example 1 – The HCPCS descriptor for the drug code is 10 mg and 700 mgs of the drug was administered to the patient; the units billed should be 70.

Example 2 – The HCPCS descriptor for the drug code is 5 mcg and 5 mcgs of the drug was administered to the patient; the units billed should be 1.

Example 3 – The HCPCs descriptor for the drug code is 25 mg and 250 mgs of the drug was administered to the patient; the units billed should be 10.

Additional findings included the following: Providers are reporting a combination of incorrect units of service and incorrect HCPCS codes. For example, provider treating prostate cancer billed 12 units of service for leuprolide acetate injection (HCPCS J1950, 3.75 milligrams per unit---total 45 mg), which is indicated for the treatment of endometriosis, uterine leiomyoma, and malignant neoplasm's of the breast; however, the provider should have billed 6 units of service for leuprolide acetate injections (HCPCS J9217, 7.5 milligrams per unit---total 45 mg), which is indicated for the treatment of prostate cancer and was the dose actually administered.

Lack of Supporting Documentation

No documentation provided to support that a patient had received the drug service billed.

Incorrect HCPCS Codes

Providers are using incorrect HCPCS codes. For example, provider billed Medicare for 200 units of bevacizumab (HCPCS code J9035); however, the provider should have billed for 200 units of azacitidine (HCPCS code J9025), the drug actually administered.

Non-covered Use of a Drug

Providers are billing Medicare for the non-covered use of an outpatient drug. For example, provider billed for a drug (plerixafor) administered during a tandem bone-marrow transplant to a beneficiary with multiple myeloma, a service (tandem bone marrow transplant) that Medicare does not consider reasonable and necessary. Medicare does not pay for drugs administered for services not considered reasonable and necessary.

Proper coding and billing of claims are necessary for accurate claim processing. Incorrect billing and documentation may result in underpayments or overpayments with subsequent recoupment and/or investigation.

Compounded Drugs Billing

Compounded drugs created by a pharmacist in accordance with the Federal Food, Drug and Cosmetic Act and the FDA Modernization Act of 1997 may be covered under Medicare when their use meets all other criteria for services incident to a physician's service. Compounded drugs do not have a National Drug Code number (NDC).

Mixing two or more pre-packaged products in the same syringe when prepared according to label instructions, does not meet the definition of a compounded drug.

Compounded drugs are used to meet the special needs of a patient. Examples of when a compounded drug is used include, but are not limited to the following:

  • Patient is allergic to an inactive ingredient in off-the-shelf drug and a compound is made omitting that ingredient
  • Dosage strength required is not available when prepared according to label instructions. (For drugs requiring reconstitution, this means after drug has been reconstituted per label instructions.) For example, a drug used in an infusion pump or reservoir may require compounding

Since the compounded medications do not have an NDC, specific HCPCS J-codes cannot be used. Instead, providers should bill J3490 (unclassified drugs); J3590 (unclassified biologics); or J9999 (Not Otherwise Classified (NOC), antineoplastic drug). If more than one compounded drug is provided on the date of service, bill each additional drug on a separate line.

Noridian makes payment for compounded drugs by invoice information. When billing for a compounded drug, the invoice information must be put into item 19 of the CMS-1500 paper claim form or the electronic equivalent on an electronic media claim (EMC). Providers should indicate the drug is compounded and the invoice price plus shipping (not handling or other fees) for each line item. Providers must maintain a copy of the invoice in the patient's file and it must be made available to Noridian upon request.

Example

  • Bill J3490 for one (1) unit of service
  • Include verbiage or abbreviation (Compounded (CMP)) to indicate a compounded drug in narrative field
  • Include invoice price (Invoice price (plus shipping)) in narrative field
  • Required Invoice information

If any of the required invoice information is not submitted it will be denied as unprocessable.

Note: Noridian does not reimburse for a compounding fee.

Outpatient Drugs Administration Orders

Coverage for outpatient drugs requires that documentation must support that services were properly authenticated or intended by the physician. While a physician order is not required to be signed, the physician must clearly document in the medical record his or her intent that the service or test be performed. Orders are a communication requesting services be completed, and may be signed by:

  • Doctor of Medicine (MD)
  • Doctor of Osteopathy (DO)
  • Doctor of Dental Surgery (DDS)
  • Doctor of Dental Medicine (DM)
  • Doctor of Optometry
  • Chiropractor
  • Podiatrist
  • Non Physician Practitioners (NPP), such as Nurse Practitioner (NP) or Physician Assistant (PA)

A Doctor of Pharmacy (Pharm D) is not an authorized CMS provider and is unable to write orders for Medicare purposes. While Pharm Ds may act within their state license for functions, they are not considered an authorized CMS billing provider. As such, any orders written or transcribed by a Pharm D need to be cosigned by an authorized provider listed above.

It is important for providers to submit all applicable documentation to substantiate services as billed and support the medical necessity of services rendered.

Refer to the Documentation Guidelines for Medicare Services page for more information on signature requirements.

Radium 223 (Xofigo) Invoice Required

Noridian requires submission of the invoice price for payment for Radium 223 (Xofigo). This radiopharmaceutical should be billed with A9606 when billing from the Medicare Physician Fee Schedule (MPFS) on a CMS-1500 Claim Form or electronic equivalent. In the Quantity Billed column (one unit is one microcurie), enter the number of units representing the dose administered in microcuries.

Providers must enter the name of the radiopharmaceutical along with the invoice price in Item 19 of the CMS-1500 Claim Form or the electronic equivalent. Claims without this information will be denied as unprocessable.

The invoice price is the amount the physician's office paid for the drug as indicated on the invoice submitted to the office for the specific drug used for this patient.

Fees for radiopharmaceuticals billed through the MPFS are determined using the methods the contractor used before November 2003, (see CMS Internet Only Manual (IOM), Publication 100-04, Chapter 17, Section 20.1.3 This link will take you to an external website. for contractor instructions). Based on that instruction, Noridian uses invoice pricing for this radiopharmaceutical. The CMS may post an Average Wholesale Price (AWP) for use by contractors using other pricing methods.

Unclassified Drug Billing When Submitting EMC

For faster and cleaner claim processing when submitting an unclassified drug EMC (Electronic Media Claim), submit only the below required information in loop 2400/SV101-7.

  • Drug name and
  • Dosage administered

Unfortunately, submitting information in both SV101-7 and Loop 2300 NTE segment or submitting extra information, slows down processing and may result in incorrect dosage calculations or denials.

Resources

Last Updated Apr 13, 2017