Oncology & Hematology Coding Alert

In a recent program memorandum, the Centers for Medicare & Medicaid Services clarified for Medicare contractors when it will pay for injectable drugs. In a nutshell, drugs furnished incident-to a physician's service, including in the outpatient hospital setting, will be excluded from Medicare coverage if they are "usually self-administered by the patient." The May 15 program memorandum (AB-02-072) instructs contractors on the best way to determine whether prescription drugs are "usually self-administered."

CMS says that "the term 'usually' means more than 50 percent of the time for all Medicare beneficiaries who use the drug." If more than 50 percent of all beneficiaries take the drug in a self-administered form, you cannot recover any payment for it. Under current law, Medicare does not cover self-administered drugs.

Oncology practices can expect a number of new local medical review policies to spring from the instructions, though, because CMS leaves it up to contractors to determine which drugs are covered.

The memo directs contractors not to cover drugs if (1) the drug is not injectable or (2) the drug is self-administered by more than 50 percent of Medicare beneficiaries.

Every six months, contractors will need to send CMS a list of injectable drugs that will not be covered. The first list is due Sept. 1. The list will be very helpful because providers will know what to expect, says attorney Eileen Kahaner, with Arent Fox Kintner Plotkin & Kahn in Washington.

If the drug is available in both oral and injectable forms, the injectable form must be medically reasonable and necessary compared to the oral form to qualify for coverage. But here's the kicker: Since "reliable statistical information on the extent of self-administration by the patient may not always be available," each contractor has discretion to make its own determinations. The situation "could affect several of the drugs that we currently use today for our oncology patients," said Carolyn Davis CMA, CPC, CCP, CCS-P, CPHT, RMC, billing supervisor for Oncology Hematology West in Papillion, Neb., at a recent Coding Institute teleconference. "We need to be able to identify those drugs so that we can show medical necessity each and every time we use them."

The memo also instructs contractors who previously paid for drugs while doctors were training patients to self-inject that they may no longer pay for those drugs.

There's some wiggle room, however, because CMS concedes that patients are less likely to self-administer subcutaneously delivered drugs for acute conditions or less than once per week.

"[This] program memorandum will bring more consistent coverage policy for outpatient drugs across the country," says CMS Administrator Tom Scully. Margaret Hickey, MS, MSN, RN, OCN, CORLN, an independent coding consultant based in New Orleans, begs to differ, calling the memo "an absolute nightmare."

The American Society of Clinical Oncology (ASCO) likewise takes a dim view of what it calls an "ill-advised action," urging the administration to take into account "the full and true costs of administering chemotherapy, which go well beyond the direct cost of the drugs involved."

"Keep your eyes open because this could have a huge impact on cancer centers," Hickey says. She is worried about the future of patient care under this new policy. New chemotherapy drugs with potential for significant improvements in patient outcomes and quality of life, like Gleevac, already pose a problem because they've been developed in an oral form and because Medicare does not provide prescription coverage, so the drugs may be cost-prohibitive to patients who may benefit, Hickey says. Other PO drugs just coming onto the market will fall into the same noncovered wasteland. Hickey's advice? "Sit tight and keep billing as you have been billing until CMS clarifies."