Oncology & Hematology Coding Alert

If the Health Care Financing Administration (HCFA) has its way, oncology practices could get paid significantly less for chemotherapy drugs. A new proposal seeks to change the way HCFA determines drug reimbursement switching from average wholesale price to catalog price.

HCFA has sent a list of 50 drugs and price lists derived from catalogs of several drug wholesalers, encouraging but not requiring them to use the new price list beginning Oct. 1. These chemotherapy drugs are affected by the new price list:

Bleomycin, J9040;
Cisplatin, J9060, J9062;
Cyclophosphamide, J9070-J9092;
Cytarabine, J9110;
Dextrose, J7060-J7071;
Dextrose with sodium chloride, J7042;
Doxorubicin, J9000;
Etoposide, J9181, J9182;
Fluorouracil, J9190;
Heparin lock flush, J1642;
Kytril, J1626;
Leucovorin, J0640;
Lupron, J9218;
Methotrexate, J9250, J9260;
Mitomycin, J9280-J9291;
Sodium chloride, J2912;
Vinblastine, J9360;
Vincristine, J9370-J9380; and
Zofran, J2405.

Critics of the proposal say the 50 drugs were selected because of the large differences in prices between the average wholesale prices (AWP) and catalog prices. They claim the change would result in oncology practices being reimbursed 83 percent of AWP, a steep cut compared to the 95 percent of AWP that Medicare currently pays. HCFA expects to save $130 million in the first year and $1.19 billion over five years.

The change does not take into account the costs oncology physicians face in running their practices, says Laurie Lamar, RHIA, CCS, CTR, CCS-P, reimbursement specialist with the American Society of Clinical Oncology (ASCO).

Among the costs that ASCO alludes to are the nurses and pharmacists needed to prepare and administer chemotherapy (96400-96549), specialized equipment needed to mix and store the drugs, staff time to procure the drugs, capital involved in drug inventory, wasted chemotherapy drugs, sales tax, and unpaid coinsurance.

In addition to HCFAs action, Congress is considering revisions in the drug reimbursement method, in part to pre-empt further actions by HCFA to reduce physician reimbursement. Congress is considering legislation that would overhaul Medicares prescription drug benefit. As part of the proposed legislation, Congress would direct the Government Accounting Office to gather information on the current Medicare Part B payment for drugs, biologics and related services. Lawmakers expect the information to shed light on the consequences of changing the current methodology of drug reimbursement.