Health Information Management

Q/A: Status indicator change for drugs

APCs Insider, January 22, 2010

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Q: I noticed some drug status indicators changed for 2010, especially status indicator K. How can we be certain that we charge correctly for these drugs?
A: CMS raised the packaging threshold for drugs from $60 to $65 for CY 2010. As a result, many drugs that had been separately payable (SI = K) became packaged (SI = N). This change does not change how providers should report the drug, just whether they receive separate payment for it. Continue to report the HCPCS code and the number of units based on the HCPCS code description.
In the Final Rule for OPPS, CMS encourages hospitals to report HCPCS codes for drugs regardless of payment status to ensure that the claims data has as much detailed cost information as possible for calculating future APC payments. CMS also encourages the use of revenue code 0636 to insure it receives the data. While the revenue code is not mandatory, CMS cannot be sure that the detail coding information processes
“While we do not require hospitals to use revenue code 0636 (Pharmacy-Extension of 025x; Drugs Requiring Detailed coding (a)) when billing for drugs and biological that have HCPCS codes, whether they are separately payable or packaged, we believe that a practice of billing all drugs and biologicals with HCPCS codes under revenue code 0636 would be consistent with NUBC billing guidelines and would provide us with the most complete and detailed information for ratesetting. We note that we make packaging determinations for drugs annually based on cost information reported under HCPCS codes, so the OPPS ratesetting is best served when hospitals report charges for all items and services that have HCPCS codes under those HCPCS codes, whether or not payment for the items and services is packaged or not. More complete data from hospitals on which drugs were provided for a specific episode would help improve payment accuracy for separately payable drugs in the future, and we encourage hospitals to change their reporting practices if they are not already reporting HCPCS codes for all drugs furnished, if specific codes are available.” (74 Federal Register 223 / Friday, November 20, 2009 /Rules and Regulations 60513)

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