Oncology & Hematology Coding Alert

Question: I'm getting familiar with the new CMS ruling on intravenous immune globulin (IVIg), program memorandum AB-02-93. The APC 905 pays $71.26. If we bill the J code per gram, will we get paid for the drug just as we have in the past?

New Jersey Subscriber

Answer: Under the Balanced Budget Refinement Act (BBRA) of 1999, CMS was required to reimburse hospital outpatient departments for certain drugs and biologicals. This temporary "add-on" payment is equal to 95 percent of the average wholesale price (AWP) for the eligible drug administered to a Medicare beneficiary. This included payment for clotting factor and intravenous immune globulin (IVIg) products used in a hospital outpatient setting.

On April 1, 2002, rules regarding the add-on payment for clotting factor, IVIg, and all other drugs, biologicals, devices, etc., eligible under the HOPPS "add-on" provision were changed. Because the projected costs associated with the add-on payments were expected to exceed the budgetary ceiling imposed by the BBRA of 1999, CMS implemented a pro-rata e.g., a proportionate reduction to these add-on payments.

This reduction will affect all plasma-based therapy products used by a Medicare beneficiary in a hospital outpatient setting. The reductions also affect IVIg. For example, IVIg products were receiving a temporary "pass-through" amount of $42.75 (500 mg) in a hospital outpatient setting. With the pro-rata reduction now in effect, the rate has been reduced to an estimated $23.24 (500 mg). Based on this reduction for IVIg, CMS is classifying all IVIg products as generics.

The add-on provision is set to expire at the end of this year. The temporary add-on provision provided under the HOPPS was only for a 2- to 3-year period, after which time these drugs, biologicals and devices were to be rolled into a permanent ambulatory payment category. If clotting factor and IVIg therapies are not assigned to a permanent APC, the drug costs will no longer be covered, and reimbursement may revert back to a flat infusion APC rate.