Knowledge Base Article

What was your strong subject in school – reading, writing, or math? To bill drugs correctly to Medicare, you need a little of all three.

Based on the physician’s order, 500 mg of Infliximab is administered to a patient. To bill for the Infliximab, a provider would report HCPCS code J1745 which has a description of “Injection, Infliximab, excludes biosimilar, 10 mg.” These means 50 units of J1745 would be reported on the claim to reflect the 500 mg given to the patient (500 mg dose divided by 10 mg description equals 50 units). If a patient requires a dose of 800 mg, then 80 units of J1745 would be billed for the amount of the drug administered and the provider may bill 20 additional units with a JW modifier if a 200 mg portion of a 250 mg single-use vial had to be wasted. The point here is that the units billed do not equal the dose amount; the units billed are based on the dose given and/or wasted and the HCPCS description of the drug. Units of service are reported in multiples of the units shown in the HCPCS narrative description. Furthermore, the physician’s order, the medication administration record, and applicable nursing or pharmacy notes must appropriately document the dosage ordered, the amount of drug administered, and any drug wastage.

Sounds straight-forward but evidently a lot of providers have problems getting this correct. The Medicare Supplemental Medical Review Contractor (SMRC) has issued notice of a new project to conduct post payment review of claims to identify incorrect units of service for outpatient drugs. According to the SMRC announcement, “Correct payments depend on providers’ accurate reporting of the HCPCS codes and units of service for each line item billed.”

The SMRC review project is at least partially in response to a July 2015 Office of Inspector General (OIG) report that identified $35.8 million in overpayments for selected outpatient drugs from July 2009 through June 2012. Eighty-eight percent of the overpayments identified in this OIG report were due to billing “either incorrect units of service or a combination of incorrect units of service and incorrect HCPCS codes.”

Medicare has established prepayment Medically Unlikely Edits (MUEs) to reduce payment errors. MUEs establish a limit for the units billed for a drug HCPCS code based on the maximum number of units a provider would reasonably administer to a patient for that code on that date of service. The OIG identified outpatient drugs that (1) had units of service that exceeded the MUE values or (2) did not have established MUE values but had units of service that exceeded the number of units a provider would reasonably administer to a beneficiary on a single date of service.

In addition to the SMRC review of outpatient drug units, the new Recovery Auditors for Regions 1, 2, and 3 have posted approved issues that address drug units. Those issues include:

• Automated review of drugs and biologicals whose units exceed the only FDA approved dose,
• Complex review of the drug Trastuzumab (Herceptin), J9355 - multi-dose vial wastage, dose vs. units billed. Documentation will be reviewed to determine if the billed amount of Trastuzumab (Herceptin) meets Medicare coverage criteria and applicable coding guidelines.
• Automated review of the drug Regadenoson (Lexiscan), J2785, billed with units greater than four (4).
• Automated review of the drug Zoledronic Acid billed with units greater than or equal to five (5) to identify excess units of J3489 as either excess units within a single line and/or as excess units across multiple lines/claims for the same beneficiary, the same HCPCS code and the same revenue center date.

A number of Medicare Administrative Contractors (MACs) are conducting medical reviews of drugs. These are generally complex reviews and drug units are only one of the issues considered. Search our knowlegde base for "drug review results" for more on this.

When billing for drugs, providers need to ensure they know the HCPCS code description, divide correctly, have the correct conversion factors in their charge description master (CDM), and have appropriate documentation in their records. A little reading, a little math and a little writing…