Oncology & Hematology Coding Alert

New methodology does not change cost of treating an average-weight patient.

You have been submitting Healthcare Common Procedure Coding System (HCPCS) code C9399 (Unclassified drugs or biological) for radium Ra 223 dichloride (Xofigo). This means that there has been no product specific code for radium Ra 223. Effective January 1, 2015, the Centers for Medicare and Medicaid Services (CMS) has assigned a new permanent product-specific HCPCS code, A9606 (Radium ra-223 dichloride, therapeutic, per microcurie), for radium Ra 223. This new code will facilitate automated billing and reimbursement and will help streamline claims submission. 

Bill for Microcuries Administered

Medicare Administrative Contractors (MACs) and other payers will now reimburse radium Ra 223 on a “per microcurie” basis rather than “per treatment dose.” This means that in 2015, you no longer get radium Ra 223 as flat-priced, patient-ready dose (PRD). Under the new CMS-mandated microcurie HCPCS code, A9606, providers will have to purchase the drug, bill payers and be reimbursed based on the number of microcuries administered to each patient

How does this impact reimbursement? Your MAC has been reimbursing Xofigo per treatment dose at 95% AWP for hospital outpatient services. For non-hospital outpatient services, your MAC has been reimbursing at AWP, invoice, or other methods. Effective this year, your MAC will reimburse Xofigo based on Average Sales Price (ASP) in the hospital outpatient department and based on AWP, invoice, or other methods in the non hospital outpatient settings like the physician office.

Check Dose According to Patient Weight

Because Xofigo is dosed based on a patient’s weight, payers and providers are likely to see a range of prices and reimbursement for Xofigo. For example, a lighter patient weighing 60 kg receives 81 microcuries whereas a heavier patient weighing 100 kg receives 135 microcuries. 

What does this mean? There seems to be a differential in acquisition costs for providers as the doses will vary based on patient weight. In other words, if your MAC were to reimburse for services performed on or after January 1, 2015 on a per treatment dose basis, underpayment and overpayment to providers would result (depending on patient weight and microcurie dose).

What you can expect form CMS? You may expect that CMS will make a microcurie-based Wholesale Acquisition Cost (WAC) or Average Wholesale Price (AWP) available to MACs. Payers can take the published WAC and AWP from the pricing compendia and then calculating a price per microcurie billing unit.

To keep consistent calculations, you need to adopt the following approach:

1. Calculate the number of microcuries per vial: Xofigo is supplied in 6 mL vials. As of the date of this publication, Xofigo has a concentration of 27 microcuries per mL. This makes a total of 162 microcuries per vial. 

2. Calculate microcurie reimbursement rate: If Xofigo’s published WAC is $18,439 per vial, you would divide $18,439 by 162 totalmicrocuries found in that vial on the reference date to calculate a per microcurie reimbursement rate for a particular claim, i.e. $18,439 (WAC) ÷ 162 microcuries = $113.82 per microcurie.

3. Adopt the pricing compendium methodology to arrive at final price: Take the applicable WAC and multiply that amount by 1.2.Hence, the suggested AWP for Xofigo on a per microcurie basis would be $113.82 x 1.2, or $136.58.

Note: If you adopt this methodology, you get a price per microcurie equal to what payers had been reimbursing for the average weight patient receiving a flat-priced PRD in 2014.

Editor’s note: Read more about the pricing and reimbursement implications for the new Xofigo code at the following sites: 

• http://www.accessdata.fda.gov/drugsatfda_docs/label/2013/203971lbl.pdf

• http://www.ahdbonline.com/select-drug-updates/1431-article-1431