Self-administered drugs

1. Self-administered drugs To bill, or not to bill. Jon Menard Consulting Manager Medical Bureau/ROI

2. What is a self-administered drug? 2

3. What is a self-administered drug? • Self-administered drugs (SADs) are defined by Medicare as “drugs that are usually self-administered by the patient.” • Self-administered drugs are excluded from Medicare Part B coverage. 3

4. Key Terms • Administered • Usually • By the patient 4

5. Administered • The term “administered” refers only to the process by which the drug enters the patient’s body (orally, injected, topically, suppository, etc.) 5

6. Usually • Medicare defines the term “usually” with regard to self-administered drugs as “more than 50 percent of the time for all Medicare beneficiaries who use the drug.” 6

7. By the patient • The term “by the patient” means Medicare beneficiaries as a collective whole. The determination is based on whether the drug is self-administered by the patient a majority of the time that the drug is used on an outpatient basis by Medicare beneficiaries for medically necessary indications. 7

8. What if a SAD is administered by a doctor? • A drug administered to the patient by a doctor may still be considered a SAD if determined that the drug is usually self-administered more than 50% of the time. 8

9. Drugs that are usually self-administered • Most oral and topical drugs and suppositories are considered to be usually self administered with rare exceptions • Oral anti-emetics (when used as full therapeutic replacement for IV drug forms as part of chemotherapy regimen) • Oral anti-cancer drugs (if the drug has the same active ingredient as the injectable drug or is an FDA approved Prodrug used as anti-cancer drugs) • Oral immunosuppressives (that are specifically labeled and approved as such or identified in FDA-approved labeling for use in conjunction with immunosuppresive drug therapy) 9

10. Why is this important? • Billing self-administered drugs that are excluded from coverage to Medicare as a covered service is a compliance issue. • SADs are not a covered Part B benefit and are the patient’s responsibility when received in an outpatient setting. 10

11. How to avoid non-compliance • SADs need to be identified in the hospital’s charge master to ensure that they are not being inappropriately billed to Medicare. • Hospitals should familiarize themselves with injectable drugs that are determined to be excluded from coverage as SADs. 11

12. Chargemaster Coding • SADs cannot be billed under revenue code 250 with no CPT/HCPCS code • Revenue code 250 is a covered revenue code (payment is packaged into other services billed) • There needs to be a way of separately identifying SADs to ensure they are not billed as covered to Medicare (e.g. assigning revenue code 637 or 259) 12

13. Self-administered Drug Exclusions 13

14. SAD Exclusions • Each Medicare contractor makes its own determination as to whether an injectable drug is to be considered excluded from coverage as a self-administered drug • Lists of excluded drugs are maintained by each contractor and can be found on the cms.gov website within the Medicare Coverage Database http://www.cms.gov/medicare-coverage-database/reports/sad-exclusion-list-report.aspx?bc=AQAAAAAAAAAA& 14

15. SAD Exclusions • Factors taken into consideration when making the determination of whether a drug is a SAD include: • Acute Condition - Is the condition for which the drug is used an acute condition? If so, it is less likely that a patient would self-administer the drug. • Frequency of Administration - How often is the injection given? For example, if the drug is administered once per month, it is less likely to be self-administered by the patient. However, if it is administered once or more per week, it is likely that the drug is self-administered by the patient. 15

17. But the HCPCS code has a payable status indicator. How can it be a SAD?(e.g. J1559 Hizentra Injection, 100MG SI = K, Payment = $7.15) 17

18. Program Memorandum A-02-129 • The fact that a drug has a HCPCS code and a payment rate under the OPPS does not imply that the drug is covered by the Medicare program, but indicates only how the drug may be paid if it is covered by the program. Intermediaries must determine whether the drug meets all program requirements for coverage; for example, that the drug is reasonable and necessary to treat the beneficiary's condition and whether it is excluded from payment because it is usually self-administered. 18

19. Administration charge • As SADs are not a covered Part B benefit, neither is their administration. Do not bill an administration code when the drug administered is considered to be a SAD. 19

20. Self-administered Drugs Treated as Supplies 20

21. SAD as integral part of a procedure • In certain circumstances, Medicare pays for drugs that may be considered usually self-administered by the patient when such drugs function as supplies. • This is the case when the drugs provided are an integral component of a procedure or are directly related to it. • Patients should not be billed for these drugs. 21

22. July 2012 OPPS Update • As part of the July 2012 OPPS Update (Transmittal 157, CR 7847) CMS provided a clarification to this rule. • This policy formerly referred to drugs directly related and integral to a procedure or treatment. • The wording now only refers to drugs integral or directly related to a procedure. 22

23. Examples of drugs as supplies • Sedatives administered to a patient while he or she is in the preoperative area being prepared for a procedure. • Mydriatic drops instilled into the eye to dilate the pupils, anti-inflammatory drops, antibiotic drops/ointments, and ocular hypotensives that are administered to a patient immediately before, during, or immediately following an ophthalmic procedure. This does not refer to the patient’s eye drops that the patient uses pre-and postoperatively. • Barium or low osmolar contrast media provided integral to a diagnostic imaging procedure. • Topical solution used with photodynamic therapy furnished at the hospital to treat nonhyperkeratotic actinic keratosis lesions of the face or scalp. • Antibiotic ointments such as bacitracin, placed on a wound or surgical incision at the completion of a procedure. 23

24. Drugs not considered supplies • Drugs given to a patient for his or her continued use at home after leaving the hospital. • Oral pain medication given to an outpatient who develops a headache while receiving chemotherapy administration treatment. • Daily routine insulin or hypertension medication given preoperatively to a patient. • A fentanyl patch or oral pain medication such as hydrocodone, given to an outpatient presenting with pain. • A laxative suppository for constipation while the patient waits to receive an unrelated X-ray. 24

25. Billing drugs as supplies • Medicare states that drugs treated as supplies should be reported under the revenue code associated with the cost center under which the hospital accumulates the costs for the drugs 25

26. Billing Beneficiaries for Self-Administered Drugs 26

27. Billing Beneficiaries for SADs • SADs provided in an outpatient setting are excluded from Medicare coverage and are therefore the responsibility of the beneficiary. • Because SADs are excluded from coverage, it is not required to provide an ABN. 27

28. Billing SADs as non-covered • Hospitals are not required to submit self-administered drugs to Medicare • Hospitals may submit self-administered drugs as non-covered if the beneficiary has secondary insurance coverage or disputes the Medicare coverage 28

29. Part D Reimbursement • Beneficiaries enrolled in a Part D Drug Plan can submit a claim for reimbursement to their plan • If the drug is on the plan’s formulary the patient may be reimbursed • Part D plans may not cover the full amount charged 29

30. Can we just write off the SADs and not bill Medicare patients? 30

31. Program Memorandum A-02-129 • Neither the OPPS nor other Medicare payment rules regulate the provision or billing by hospitals of non-covered drugs to Medicare beneficiaries. However, a hospital's decision not to bill the beneficiary for non-covered drugs potentially implicates other statutory and regulatory provisions, including the prohibition on inducements to beneficiaries, section 1128A(a)(5) of the Act, or the anti-kickback statute, section 1128B(b) of the Act. 31

32. Example • Hospital A – SADs are pulled from the claim and billed separately to the patient • Hospital B – SADs are written off and the patient is not billed separately for the drugs received Which hospital would the patient rather go to? 32

33. What to do to be compliant • Identify all self-administered drugs that are not a Medicare benefit • Make sure they are not being billed as covered charges to Medicare • Review your process for handling self-administered drugs 33

34. Things to consider • Administration buy-in • Pharmacy cooperation • Chargemaster management 34

35. Questions? Jon Menard Consulting Manager Medical Bureau/ROI jmenard@theroi.com 35