Webinar Questions & Answers from our Quarterly Drug Reimbursement Review for Q3 2019

The following questions were submitted by attendees during the most recent Quarterly Drug Coding, Reimbursement, and Pipeline Update Webinar for Q3 2019.

Q:  On the “Pricing Updates” slide it shows that the majority of Code Price changes were increases, but the Medicare Allowable ASP price changes showed a majority which were decreases. Why do these not match?

A: First, we must understand the difference in how these rates are determined. Code Prices are based on manufacturer reported Average Wholesale Prices (AWP), which is the pharmaceutical drug industry equivalent to an MSRP. This price does not reflect the price the drug actually sells for, which could be significantly lower. Often times when reimbursement is based off AWP pricing, a discount is set anywhere from 5% – 25%, or more. Medicare Allowable rates are based on Average Sales Price (ASP) using manufacturer reported sales data that is only available to CMS. Typically, reimbursement rates based on ASP would reflect a markup; 6% in the case of Medicare Part B.

With the two rate types trending in opposite directions, RJ Health hypothesizes that the pharmaceutical industry is offering discounts at point of sale, which is driving down the actual sale price used to calculate ASP,
despite the reported AWP rates generally increasing. Additionally, RJ Health Code Prices represent HCPCS codes that do not have ASP rates available, so there is not a 1:1 correlation within the groups of codes.

Q: How can I identify new codes on my Data File? Does my IT need to do anything special to load these codes?

A: We publish our data files on a monthly and quarterly basis. Each of these files contains a “changes” tab. Additionally, our HCPCS/CPT® Code tab has a listed “effective date” of each code. As mentioned in the webinar, RJ loads these new codes the month prior to their effective dates to allow plenty of time to load these codes before you see claims come in.
Please contact our Account Management team to set up some time to review best practices for loading and using all of our Data Files.

Q: For J7311 – [Injection, fluocinolone acetonide, intravitreal implant (RETISERT®)] – for Date of Service prior to 10/1/19, should providers bill 1 unit? For a Date of Service on or after 10/1/19, should they bill 59 units?

A: You are correct. Prior to 10/1/2019, the provider should bill with a single code unit as it was based on the implant. On or after 10/1, the description has changed to be based on .01 mg, of which 59 are in the implant.
Here is a screenshot from ReimbursementCodes.com for the J7311 search results.

Q: Are you expecting the quarterly release of codes to become the norm with the FDA?
A: We do see this as an ongoing practice by CMS. The next domino will be how this affects the other types of Drug Codes, C-codes for out-patient hospital claims, and S-Codes (created by BCBS Organization). Our team reviews and loads these new codes the month prior to their effective date, so keep an eye out for the new January Codes on our December update, newsletters, and alert tabs.

Q: Is the information that was shown on the reimbursementcodes.com website only updated quarterly with the release of the HCPCS/CPT Codes?

A: No, RJ Health publishes a monthly data update and the website is updated on the first calendar day of each month. All drug (NDC) pricing and clinical data are updated on a monthly basis, despite the HCPCS/CPT code updates being released quarterly. The Alerts and Notifications section in ReimbursementCodes highlights important changes to the website for the current month:

If you would like to view a recording of the webinar, click here.

Don’t have time to watch the webinar? Download the deck here:

RJ Health is a drug data, application & analytics provider to the pharmacy reimbursement market, who brings scalability to specialty drug innovation. We focus on specialty drug innovation (new approvals and additional indications), as well as normalizing reimbursement for drug classifications that have market forces at-play (generics / biosimilars, rebates, and CMS policy). The company provides industry standard pricing, coding, dosing, weight, age, and diagnosis data & analyses to pharmacy, market access, claims, billing, finance, and network management clientele. RJ Health ensures transparency between manufacturer, payor, provider, pharmacies and their respective solution vendors (PBMs, Payment Integrity, Revenue Cycle, EHR, etc…) – all licensees of RJ Health data. 

Our tools and data:

Assist in understanding drug pricing and healthcare reimbursement for drug claims

Enable organizations to look up and crosswalk NDCs and HCPCS codes – J codes, C codes and other

Assist in calculating drug dosage accurately and ensure claims are reimbursed properly based on unit requirements

Ensure claim accuracy and crosswalk drug codes

Help organizations make the best decisions for drug formularies

Combine clinical diagnosis and procedural coding matched to the right drug and dosage, as well as the most cost-efficient specialty drug price