Health Information Management

Q/A: Revenue codes for drug charges

APCs Insider, April 8, 2011

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Q: Some of our drug charges with HCPCS J-codes are rolled into revenue code 250 (pharmacy) on the claim; we report others under revenue code 636 (drugs with detailed coding). What is the difference and should we use revenue code 636 to report all drugs with HCPCS codes?

A: Many facilities report packaged drugs under revenue code 250 regardless of whether an applicable HCPCS code exists. Specific reasons exist for reporting in this manner. Facilities report separately payable HCPCS codes under revenue code 636 to esure they receive reimbursement.

CMS notes in the 2010 OPPS final rule that HCPCS codes reported under revenue code 250 are “lost” during claims processing procedures and therefore not available for rate setting consideration under OPPS. CMS uses HCPCS coded drugs to establish the percentage of payment added to the ASP to cover pharmacy overhead and expenses. Drugs reported under revenue code 636 are included in this calculation.

CMS has recommended that facility providers report all drugs with a HCPCS code under revenue code 636 to better capture actual pharmacy overhead cost through claims data. HCPCS codes need not be reimbursed separately to be reported under revenue code 636. Reporting in this manner is CMS’ only mechanism to calculate payments for subsequent calendar years. The latest information on this is in Transmittal R2130CP, section B.9.a.

Editor’s note: Denise Williams, RN, CPC-H, Director of Revenue Integrity Services at Health Revenue Assurance Associates, Inc., in Plantation, FL, answered this question.

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