CODING Q&A

In-office Injectables

SUZANNE L. CORCORAN, COE

Retinal subspecialists use a number of injectable drugs in the office. Here I’ll explain Medicare’s rules for their reimbursement.

Q. Does Medicare reimburse physicians for drugs used in the office?

A. Sometimes. The Medicare program covers some outpatient drugs that meet specific criteria. The Medicare Benefit Policy Manual (MBPM), Chapter 15, §50 states that the program covers drugs that are “furnished ‘incident to’ a physician’s service provided that the drugs are not usually self-administered by the patients who take them.”

Generally, drugs and biologicals are covered only if they meet all of the following requirements:

• They fulfill the definition of drugs or biologicals (§50.2);

• They are of the type that are not usually self-administered (§50.2);

• They satisfy all of the general requirements for coverage of items as incident to a physician’s services (§50.1 and §50.3);

• They are reasonable and necessary for the diagnosis or treatment of the illness or injury for which they are administered according to accepted standards of medical practice (§50.4);

• They are not excluded as noncovered immunizations (§50.4.4.2); and

• They have not been determined by the FDA to be less than effective (§50.4.4).

Q. What does CMS mean by the phrase “incident to”?

A. Ophthalmologists are familiar with the term “incident to” as it applies to professional services provided by staff, such as diagnostic tests. These services are integral, although incidental, to the total professional service provided by the physician. However, reimbursable drugs must also meet specific “incident to” criteria.

The MBPM, Chapter 15, §50.3 states, “In order to meet all the general requirements for coverage under the incident-to provision, an FDA approved drug or biological must:

• be of a form that is not usually self-administered;

• be furnished by a physician; and

• be administered by the physician, or by auxiliary personnel employed by the physician and under the physician’s personal supervision.

The charge, if any, for the drug or biological must be included in the physician’s bill, and the cost of the drug or biological must represent an expense to the physician.”

Q. How are injectable drugs coded?

A. Injectable agents are described by codes in the Health Care Procedure Coding System (HCPCS), generally by “J-codes.” Examples include:

• J0178 injection, aflibercept, 1 mg (Eylea, Regeneron)

• J2778 injection, ranibizumab, 0.1 mg (Lucentis, Novartis)

• J3300 triamcinolone acetonide, preservative free, 1 mg (Triesence, Alcon)

• J3301 triamcinolone acetonide, not otherwise specified, 10 mg (Kenalog, Briston Myers Squibb)

• J3396 injection, verteporfin, 0.1 mg (Visudyne, Valeant)

Q. How is the amount of the reimbursement determined?

A. The Medicare Modernization Act (MMA) dramatically changed the payment methodology for drugs furnished incident to physicians’ services. Since 2005, the calculation shifted from 85% of average wholesale price (AWP) to 106% of average sales price (ASP). Prices are reported by manufacturers quarterly, and a complex formula considers revenues, divided by units, to arrive at the ASP. Each quarter a new table of payment allowance limits is published. The payment allowance limits subject to this methodology are based on the ASP date from two quarters prior to the effective quarter. For example, in March CMS publishes allowable amounts for April through June; the amounts are based on the ASP data from the fourth quarter of the prior year.

Q. What about compounded drugs?

A. Some drugs and biologics are not provided in a form or dosage useful in ophthalmology; they are obtained from a compounding pharmacy. Even though these injectables may have HCPCS codes that apply to their original formulation, when repackaged or compounded they are billed with unspecified codes. An example is injection of bevacizumab 10 mg (Avastin, Genentech): Although it has an HCPCS code, J9035, the quantity assigned to the code does not apply to ophthalmic use.

Check your payers’ instructions for proper coding for compounded drugs; policies vary considerably.

The unspecified codes are:

• J3490 unclassified drugs

• J3590 unclassified biologics

Payment for compounded drugs does not follow the standard 106% of ASP, because these products have no ASP. Individual Medicare Administrative Contractors (MACs) set allowed amounts. For example, compounded Avastin for ophthlamic use is currently allowed at about $50 to $65 around the country.

Q. Are injections always reimbursed?

A. No. An injection performed to treat a related postoperative complication is not reimbursed if performed in-office during the global surgery period. The administration of the injectable is included in the postoperative care; however, the drug you inject can be billed separately using the appropriate HCPCS code. Reimbursement is made for both the injection and the drug if the injection is performed outside of the global surgery period, even if it is related.

An injection for a nonapproved use is also not covered. When the drug is not covered, neither is the administration.

Note as well that some injected substances and the injection itself are reimbursed as part of a larger procedure. For example, injections of anesthetics at the time of surgery or fluorescein dye used for angiography are not separately reimbursed. RP