Knowledge Base Article

The Outpatient Prospective Payment System (OPPS) final rule is released each year around the first of November, and that only gives hospitals two months (during an already busy and short-staffed holiday season I might add) to implement the new requirements for the coming year. Sometimes this means beginning to make changes before final guidance and addenda are available – a good way to get a jump on necessary revisions. The caution for this approach is to be sure to check any additional guidance and revised addenda prior to implementation and make the necessary adjustments.

For example, the 2018 OPPS final rule required the reporting of modifiers for drugs purchased through the 340B drug discount program. Modifier JG is reported with separately payable drugs with a status indicator of “K” by most hospitals purchasing drugs through the 340B program. The JG modifier causes Medicare payment to be made at average sale price (ASP) minus 22.5%, instead of the ASP +6% that is paid for separately payable drugs not purchased through the 340B program and a few other exceptions. Modifier TB is reported on the applicable drugs by certain excepted types of providers (rural sole-community hospitals, children’s hospitals and cancer hospitals) and for pass-through drugs which have a status indicator of “G.” If your hospital proactively added the applicable modifiers to your chargemaster, did you remember to verify that the status indicator for each drug did not change for 2018?

In claim review, MMP has observed some drugs, whose status indicator changed from “G” in 2017 to “K” in 2018, being reported with the incorrect modifier. Status indicator “G” pass-through drugs purchased through the 340B program are reported with a TB modifier, but once their SI changes to “K” they are to be reported with a JG modifier resulting in a reduced drug payment. Below is a table of those drugs that had a status indicator of “G” for 2017 that changed to “K” for 2018.

Hospitals may want to verify again that the modifiers they are reporting for drugs purchased through the 340B program are correct and appropriate based on the drug’s OPPS status indicator. When billing Medicare, it is a good idea to check and double-check as things can change in an instant.