Oncology & Hematology Coding Alert

Question: The cost of chemotherapy drugs is more than the new APC system will reimburse. How will HCFA account for this under the Hospital Outpatient Prospective Payment System?

Tennessee Subscriber

Answer: The Health Care Financing Administration (HCFA) has recognized the disparity between the cost of expensive chemotherapy drugs and actual reimbursement of certain cancer-fighting drugs under its new ambulatory payment classification (APC), which took effect in August. Rather than assigning certain drugs to an APC group, HCFA is allowing identified drugs to passthrough the new system and will continue to pay based on 95 percent of average wholesale price (AWP).

There are now two HCFA Memoranda (A-00-42 and A-00-61) that list the pass-through drugs and devices, but more of these items will be identified by Dec. 1, 2000. Included in these lists are new HCPCS codes created to identify medicinal agents. The following is a sample of these items:

C1086 Temozolomide, 5 mg (Temodar)
C9001 Linezolid injection, per 200 mg
J0130 Injection, abciximab, 10 mg
J0205 Injection, alglucerase, per 10 units (Ceredase)
J2430 Injection, pamidronate disodium, per 30 mg
Q2003 Injection, aprotinin, 10,000 kiu
Q2007 Injection, ethanolamine oleate, 100 mg
Q2008 Injection, fomepizole, 1.5 mg
Q2009 Injection, fosphenytoin, 50 mg

APCs have been in effect since Aug. 1, when HCFA implemented its outpatient prospective payment system (OPPS), which applies to hospital outpatient departments, community mental-health centers and limited services in community occupational rehabilitation facilities, home health agencies, or to hospice patients for the treatment of nonterminal illness.

Under the new system, payment for services is calculated based on grouping outpatient services into APCs, which is similar to the current method of grouping inpatient services into diagnosis-related groups (DRGs). The services grouped within an APC are similar clinically and require similar resource use, and APC payments will include certain packaged items, such as anesthesia, supplies, drugs and the use of recovery and observation rooms. A primary difference between DRGs and APCs is that the DRG grouping focuses on diagnosis code assignment, but the APC reimbursement is keyed to procedure code assignment.

This question was answered by Cindy Parman, CPC, CPC-H, principal and co-founder of Coding Strategies, a coding consulting firm based in Dallas, Ga.