Policy
Pharmacy Practice News • March 2022
29
Reimbursement Issues
Catching up on what’s crucial!
The Waste REFUND Act T
he infrastructure bill that passed on Nov. 15, 2021, garnered much media attention for its focus on bridges and other long-neglected systems. But did you know that the bill also includes a drug waste provision that, if not addressed adequately by your revenue cycle team, could lead to failed audits and charges of healthcare fraud? Fortunately, there are four key questions you can use to determine how to accurately bill for drug waste and ensure compliance, along with several other tools detailed below.
istration instructions included in the labeling require filtration during the drug preparation process, prior to dilution and administration, and require that any unused portion of such drug after the filtration process be discarded after the completion of such filtration process; and • a drug or biological approved by the FDA on or after the date of enactment of this subsection and with respect to which payment has been made under this part for fewer than 18 months. Further provisions require HHS to
area shortly after moving to the concept of “billing units representing actual dose given” for reimbursement and away from the “whole vial” method of billing under OPPS. Medicare does not mandate billing for waste, but makes it possible to recoup some lost dollars if you choose to bill for them. How does this work? That’s where answering those four questions comes in: 1. Is the drug being used for a Medicare outpatient? 2. Are you using a single-dose vial/ package? 3. Does the product have an HCPCS code? 4. Does the code include an SI G or SI K designation? If yes, proceed to waste billing. If no, then there’s nothing to do.
3 Trigger Points To Measure Your Progress 1. Candidate Drugs Success: Eligible SI G + K drugs identified, updated quarterly Fail Point: Pharmacy unaware of how to do this
2. Billing Unit Conversions
First, a bit more background. The portion of the infrastructure bill (H.R. 3684) that you need to pay attention to is the drug waste provision from the Recovering Excessive Funds for Unused and Needless Drugs (REFUND) Act of 2021 (S. 1287). The act requires manufacturers to rebate the amount wasted back to CMS effective Jan. 1, 2023 (see Sec. 90004). This concept was first introduced in 2019 by Sens. Dick Durbin (D-Ill.) and Rob Portman (R-Ohio) in a bipartisan bill designed to reduce egregious wasted spending on discarded medications that are the result of excessively large, single-use drug vials. The bill requires drug companies/ manufacturers to reimburse Medicare for certain wasted medications. It specifically states that these medications are certain single-dose container or single-use package drugs payable under Part B of the Medicare program. The intent is to provide refunds with respect to discarded amounts of such drugs— for example, wasted medications that include leftover portions of drugs packaged in single-use containers. Keep in mind, however, that three pharmaceutical categories are excluded: • a drug or biological that is either a radiopharmaceutical or an imaging agent; • a drug or biological approved by the FDA for which dosage and admin-
aggregate the total amount of discarded Part B drugs quarterly using Medicare Part B claims and calculate refunds using the ASP (or WAC if ASP is not available). The drug manufacturer will be required to provide a rebate to HHS for the total amount of discarded medication recorded, above a 10% low-volume threshold. Noncompliance to provide a timely rebate could incur civil monetary penalties under this act. More details on S. 1287 and H.R. 3684 can be found at the Congress. gov website (bit.ly/35ZG4Jo and bit. ly/3spjqBH, respectively). For the latter, see Sec. 90004, which requires certain single-dose container or singleuse package drugs payable under Part B of the Medicare program to provide refunds with respect to discarded amounts of such drugs. Compliance audits are a guarantee! These could be audits of the manufacturer’s compliance, as well as audits of health systems’ activities related to the accuracy of the aggregated amount calculated, comparisons of billed doses and billed wastage with the number of units sold, or any untold number of other methods of determining data accuracy and ruling out fraud. Given the potential for audits, this is a good time to review your waste billing program. Medicare created the ability to bill for expensive waste in the outpatient
Success: Crosswalk accurate, CDM/PDM built to accommodate required charting Fail Point: Pharmacy not following up
3. Reality Matches Billing Success: Clinician actions match charting and billing Fail Point: Pharmacy opted for “robo-billing.” Billing person has no idea of what clinician or IV prep area actually did See Module 4 of the Reimbursement Tool Kit (www.pharmacypracticenews.com/ToolKit) for more e details.
It’s also important to avoid pitfalls when coding for drug waste. For example, the actions in the IV prep area must match what’s billed and charted in the EHR! Don’t file build in such a way that the computer automatically processes waste billing on order entry without knowing exactly what’s happening to the drug. Never create an auto-bill situation that doesn’t represent true actions. Consider this potentially tricky filebuild scenario: The drug vial contains 1 g of medication. The infusion center uses 500 mg for each of two patients.
“Reimbursement Matters” is a tool for maintaining your health system’s fiscal health. Please email the author at bonniekirschenbaum@ gmail.com with suggestions on reimbursement issues that you would like to see covered.
Bonnie Kirschenbaum, MS, FASHP, FCSHP
A Reimbursement Lexicon ASP, average sales price; CDM, charge description master; CMS, Centers for Medicare & Medicaid Services; EHR, electronic health record; HCPCS, Healthcare Common Procedure Coding System; HHS, Department of Health and Human Services; MAR, medication administration record; OPPS, Outpatient Prospective Payment System; PDM, pharmacy drug master; SI, status indicator; WAC, wholesale acquisition cost
Nothing was actually wasted. But without a careful file build, you could have created a situation where your revenue cycle department would assume that two vials had been used and erroneously process two waste charges. This would constitute fraud. Zero-priced products are another potential pitfall. These medications— typically patient assistance and whitebagged/specialty pharmacy drugs— don’t qualify for waste billing. Since there’s no charge for these products because you didn’t buy them, there cannot be any waste billed. Staff must understand the difference, know when a zero-priced product is being used and use the correct line item on order entry. It’s also important to understand your system’s limitations. For instance, you may be able to file build such that the computer will calculate the amount given and amount wasted, but how does this information become a line on the MAR for the nurse to chart the waste? And how does this information get converted into a waste line bill with the appropriate modifier that accompanies the drug line bill so that the two are charged together on the same day? Documentation must be in the patient chart; automated dispensing records or other internal pharmacy records aren’t sufficient. If you’re trying to charge for waste for something that comes out of an automated dispensing cabinet, you’ll need to work out how this is consistently charted in the medical record, if that is even possible. Here’s another important tip: Don’t forget about revenue cycle orientation. Waste billing means that there are two lines of billing for the same patient on the same day with the waste identified by the JW modifier. This goes completely against the hard stops that have been built into many of the revenue cycle processes that prevent this from happening. Have you worked with your revenue cycle team to resolve this issue? ■
