How to get paid for drugs administered in the office

Medications that have to be injected or instilled are considered Medicare Part B drugs, and for many offices, these are a money-losing proposition. However, you have a few options that will allow you to provide the needed medications to your patients without loss of revenue.

We have often talked about “best practices” in previous articles. Buying and billing for drugs, coordinating delivery of drugs from specialty pharmacies, “brown-bagging” practices, licensed dispensing of drugs, and participation in competitive acquisition programs (CAP) or other like programs in your office require well-established and adhered-to best practices. For every step of the process, from the ordering of the drug to depositing the money in the bank, you should have a very strict protocol in order to prevent “leakage” along the way.

For example, the urologist schedules a patient for an injection with XYZ drug. This should start a chain of events that would guarantee that the drug is available when the patient returns and that you know exactly who is supposed to pay for the drug, how it is to be billed, and you have verified the eligibility of the patient and complied with all of the rules of the payer. Once the drug is given, a clean claim should be submitted and very close follow-up initiated to be sure the claim is paid in full.

10 best practices to follow

Although this sounds simple, it is not always so easy to execute, and for every step missed, you are losing money. Let’s look at best practices for billing for drugs administered in the office in more detail.

Step 1: Patient is scheduled for a return visit to receive a drug. This should alert your office that the drug will be needed at the time of the patient’s appointment. A designated person in your office should be tasked to be sure that this is noted, either through an automated, electronic process or a manual process. The appointment date may need to be checked to determine that there are no time restrictions from previous injections that will block payment.

Step 2: Insurance verification, preauthorization, etc. Prior to the visit, your office should verify all current insurance information and determine the payer’s rules for that drug. If preauthorization is required, obtain it prior to the visit. If brown bagging is required, follow that pathway. In other words, based on contractual agreement and your office procedure, this step may dictate several different pathways. Each must be well defined. This is a time-consuming but very important step. Payers have different coverage rules, and many have different coverage rules for each drug.

Step 3: Ordering and inventory.

• Buy and bill. Depending on the drug, cost, shelf life, manufacturer’s rules, delivery time, etc., you may carry an inventory of the drug or you may need to place an order for that drug to be delivered “just-in-time.” For the more expensive drugs, you should have a contract with the manufacturer or entity from which you order to allow for return of unused or outdated drugs.  Electronic inventory management systems are available to assist with “just-in-time” inventory management: “AIMS,” used for triptorelin pamoate (Trelstar), and “LuproLink” for leuprolide acetate (Lupron) are two examples. LuproLink is specific to Lupron. “AIMS” is capable of inventorying multiple drugs; however, it has only been adopted for use by Trelstar. Neither have the capability of tracking preauthorizations, payments, etc. at this time.

• Specialty pharmacy. Depending on the drug and the physician’s office, many drugs are provided by specialty pharmacies. Clear prescriptions for each patient will be required in some cases if the specialty pharmacy is going to provide the drug for the patient and bill for the supply. Others may purchase drugs from these groups and will fall back into the process of buy and bill listed above.

• Brown bagging. You may ask the patient to buy drugs and bring them to the office at the time of delivery. This option may be required under some private payer contracts, including contracts for Medicare Advantage plans. This is not an option for some drugs, even in the private sector, and may not be allowed for some drugs for traditional Medicare patients. These patients will require a prescription given to the patient or sent to the pharmacy, and the patient may need to be reminded to bring the drug prior to the visit.

• CAP and other like programs. If you are a participant in a CAP or similar program, you have agreed to provide all drugs or most drugs to patients in conjunction with a particular vendor. In these programs, you are not required to pay for these drugs, nor are you paid for them. As such, the office will need to coordinate a prescription and drug delivery date with the dedicated vendor.

Step 4: Double check. The day before the drug is to be administered, verify that patient benefits are active and that preauthorization has been obtained, if needed, and that you have complied with all other payer rules for that patient, for that drug, for that day. And, of course, you should be sure the drug will be available and the patient plans to show up. A reminder call should be made for any brown-bag patients. Finally, determine the amount the patient will be required to pay and check the deductible, co-payment for visit, and the co-insurance that will be due.

Step 5:Collection. Collect the full amount due from the patient, including co-payment, co-insurance, and allowed amount based on deductible prior to administering the drug. You cannot afford to provide the drug to any patient without collecting. If the patient can’t pay his share of the cost, your office should assist the patient in finding a charitable foundation, manufacturer’s foundation, or others to pay for the drug or the co-pay.

Step 6: Never go to step 7 prior to performing steps 2, 3, 4, and 5.

Step 7: Administer the drug.

Step 8: Bill according to your office protocol and that payer’s rules for that drug.

A few special billing considerations for Medicare:

• When billing for unused drugs in single-use containers, Medicare will pay for unused drugs reported if the unused amount cannot be reused according to packaging guidelines. If the amount listed in J codes is the between units (ie, 95 mg used and lowest units in Healthcare Common Procedure Coding System is 100 mg), report the full HCPCS code for the next highest number of units to include all unused drug, bill on one line, no modifiers. In circumstances where HCPCS units allow for reporting of unused portion on a separate line, report all units used with HCPCS code, with no modifier and unused drug on a separate line with modifier –JW.

• Medicare will not pay the pharmacy for most Part B drugs to be injected in the physician’s office. If you write a prescription and ask the patient to bring the drug to the office, the patient may have to pay out of pocket. For many managed care plans, both Medicare and commercial, no one will be paid if you do not have the patient obtain the drug from a designated pharmacy.

• Some payers, including some Medicare carriers, will not pay for an injection without a charge for the drug in the office. Check with the payer to determine which modifier, if any, is required to report drugs administered but not purchased by the office.

• CAP participants are required to submit HCPCS codes and prescription with administration codes even though payment for drugs is issued to a third party. Your office will need to learn use of J1, J2, and J3 modifiers as well.

• Billing the payer for drugs that will be used by the patient for home administration is generally not allowed unless a provider is a durable medical equipment supplier and/or licensed to dispense drugs in the state. Exceptions for oral cancer treatment drugs exist for Medicare and other payers. Take care in dispensing drugs charged to patients even if your have become appropriately licensed. There are arguments both for and against this practice in principle. Practically, rules vary from state to state and may be affected by benefit plan. Research each before implementing this in your practice.

Step 9: Monitor claim for payments. The office should set up a monitoring system specifically for drugs to check periodically that the insurance company is paying for each drug for each patient.

Step 10: Verify initial payment. Do not administer a second treatment until you verify that the patient’s insurance has paid for the first dose. If possible, do not schedule a second treatment until you have verified payment for the first.

Unfortunately, in working with offices to evaluate their billing and collections, we have seen numerous examples of very expensive drugs that have been given over a series of multiple treatments in which no payments have been received. The sad part is that some offices had not met the payer’s criteria for that drug and probably will receive no payment in the future, some with tens of thousands of dollars lost.

Your office holds the key

Fortunately, many of the issues surrounding payment for drugs can be solved by the office. Careful implementation of best practices-clear protocols, effective training and support, and clear responsibility and enforcement-will allow a practice to include provision of drugs in the office setting without financial loss. One size will not fit all situations.

There are some problematic issues without a good solution. Some drug reimbursements may not be viable for some, if not all, practices. Alternatives to support your patients may need to be offered and may include referral of the patient to other providers. Remember that in order to provide good care to as many patients as possible, you need a financially healthy business with quality clinical services.UT

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