Comment Letter on IPPS FY2023 Proposed Rule and NDC Reporting for NTAP Drugs

Dear Readers:
Below is the content from a letter we submitted to CMS regarding their proposal in the IPPS FY2023 Proposed Rule to discontinue ICD-10-PCS codes for identifying drugs eligible for NTAP and switch to requiring NDC numbers be reported on inpatient. We’ve made an alternate suggestion after talking with many of you, and also offered some important steps that should be taken to ensure the integrity of the data if CMS proceeds with this proposal.

Please send us your feedback. We’ll do another analysis when the Final Rule is issued in August, prior to its implementation date of October 1, 2022.

Our goal is simple; we’re taking complex information and making it practical. 

Until our next edition, this is Maxie Friemel and Agatha Nolen providing you with tips for increasing your Pharmacy Revenue.

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June 15, 2022

Via Electronic Submission to: http://www.regulations.gov (CMS-1771-P)

Chiquita Brooks-Lasure, Administrator

Centers for Medicare & Medicaid Services

Department of Health and Human Services

Attention: CMS–1771-P

P.O. Box 8013

Baltimore, MD 21244–1850

Re: Comments on The Hospital Inpatient Prospective Payment Systems (IPPS) for

Acute Care Hospitals and the Long-Term Care Hospital Prospective Payment

System and Proposed Policy Changes and Fiscal Year 2023 Rate published in the

May 10, 2022 Federal Register (CMS-1771-P)

Dear Administrator Brooks-Lasure: 

We are pharmacists and consultants to health systems and practitioners in the area of pharmacy revenue cycle and are commenting on the proposal to change the claim identifier for drugs qualifying for New Technology Add-on Payment (NTAP) from the current ICD-10-PCS Code to the National Drug Code (NDC) number. 

This is found in section II.F.8.”Proposed Use of National Drug Codes (NDCs) To Identify Cases Involving Use of Therapeutic Agents Approved for New Technology Add-On Payment”- Federal Register / Vol. 87, No. 90 / Tuesday, May 10, 2022 / Proposed Rules/ page 28353. 

Background:

The National Drug Code (NDC) number is a 10-digit number coordinated by the FDA which is reported on health claims as an 11-digit number. In the hospital environment, the NDC is stored in the Pharmacy IT system and is used in the clinical care of the patient for drug interaction checking, diagnosis conflicts, as well as safety aspects such as matching patient and medication through barcode medication administration and accurate restocking of floor stock supplies.

Drug profiles are created in the Pharmacy IT system that have NDC numbers that link to billing information such as a procedure code, revenue code and HCPCS code as the HCPCS code has been the standard for reporting drugs for payment under the OPPS system since 2000.

We understand that the ICD-10-PCS coding system was not designed to provide detailed coding for each drug manufactured. With the increased speed of FDA approval and the escalating costs of drugs, it has become cumbersome to have ICD-10-PCS codes issued for each drug, even when limiting the codes to only those drugs eligible for NTAP payment.

1. Concerns in considering this proposal:

Multiple ways to report drugs for payment based upon patient status and code sets

Hospitals are faced with increasingly complex requirements to report drugs to secure reimbursement with variations based upon code sets and patient status.  

For Inpatient claims we have two ways of reporting drugs for additional payment:

• Hemophilia products are reported with HCPCS codes + billed units per date of service (DOS)
• NTAP-eligible drugs reported with ICD-10-PCS codes with only a single code independent of number of doses or days administered

For Outpatient claims we report all drugs similar to Hemophilia products on inpatient claims (i.e. HCPCS code + billed units per DOS) with two nuances:

• Most oral drugs are not assigned HCPCS codes as they are typically self-administered drugs and not covered under Part B
• HCPCS Code C9399 (Unclassified drug or biological) is used for new drugs and biologicals that are approved by the FDA on or after January 1, 2004 for which a specific HCPCS code has not been assigned but CMS requires that the drug name, dose, amount of waste and National Drug Code (NDC) number be manually added to the remarks section of the claim.

Hospital Pharmacy and Billing IT systems will need remediation with complex maintenance in order to accurately bill drugs based upon the type of drug, whether it is eligible for NTAP payment and the status of the patient. Changes in patient status will require programming to recalculate posted charges. Many hospitals currently do not bill some NTAP-eligible drugs due to the cumbersome process and low anticipated reimbursement. This can lead to inadvertent billing errors or omissions when a business decision is made that the anticipated payment will be less than the cost to remediate IT systems and maintain these complex billing rules. Inaccurate data could lead to erroneous future rate-setting by CMS when data is missing from claims.

No national rules or standards on how to correctly code drugs using NDC numbers on 837I claims or that NDC numbers will be accepted by all payers on inpatient claims

The 5010 HIPAA transaction standards define the NDC units of measure (F2, UN, GM, ML, ME), but do not define how they are to be applied in the hospital setting. There is no nationally recognized public or third-party database that authoritatively provides these instructions. State Medicaid programs have provided directions since requiring NDC numbers on outpatient claims beginning in 2006, but one eHR vendor has advised clients to use the “UN” unit of measure with a “unit” of “1” for all entries rather than using the most common four units of measure as directed by State Medicaid programs. In addition, vendors and providers also differ in the reporting of the actual NDC administered to the patient (usually captured with Bar-code Medication Administration (BCMA), or an NDC number that is retrieved from a database and “represents” what is administered to the patient matching only the generic identification but not the specific NDC number. Without specific guidance, current NDC reporting is often inaccurate resulting in increasing claim rejections for an invalid NDC number.

Currently, some payers are requiring NDC numbers on outpatient claims, but rejecting the line if not reported with a HCPCS code. It is anticipated that this situation may occur similarly on inpatient claims with commercial payers.

Future concerns with potential changes in FDA assignment of NDC numbers

The FDA held public hearings in 2018 to receive input as the current structure of 10-digit NDC codes will run out of codes within 10-15 years. Although a path forward has not yet been announced, it is conceivable that a longer NDC number (e.g. 16 digits) may be required as early as 2028 requiring clinical and billing systems to be updated in all hospitals as well as updated 5010 requirements for standardized billing. CMS, MACs, and all payer systems will also require remediation to accommodate these changes. A summary of the public hearings is here:  https://www.fda.gov/drugs/news-events-human-drugs/public-hearing-future-format-national-drug-code https://www.wolterskluwer.com/en/expert-insights/are-you-prepared-for-a-major-industry-change-to-the-national-drug-code-ndc-number

1. Recommendations for CMS for this section of the Proposed Rule:

1. Consider that NTAP-eligible drugs be billed on inpatient claims with the same instructions as currently used to report hemophilia products, i.e. with HCPCS codes and billing units by DOS. Having one way to bill drugs on inpatient and outpatient claims will reduce IT programming expense and reduce errors with increased standardization.
   1. Request that the CMS HCPCS Working Group assign HCPCS codes to items eligible for NTAP payments, even if they normally would not be assigned a HCPCS code (such as drugs with inpatient-only status, or an oral drug which is not usually covered under Part B). As HCPCS codes are assigned quarterly, this would eliminate the need for special notification if new NDC numbers are marketed after the implementation of the NTAP status and before the next rule-making cycle.
2. If CMS adopts the proposed change to use NDC numbers to identify NTAP-eligible drugs on inpatient claims, we recommend that CMS should:
   1. 1. Work with NUBC to provide further clarification on how these 5010 standard units of measure and billing quantities should be calculated and reported prior to utilizing the NDC number to drive payment. In effect, the unit of measure and billing quantity required with 5010 standards will be meaningless on inpatient or outpatient claims.
      2. Work with NUBC to require all payers to accept NDC numbers on inpatient claims to avoid payer-specific instructions which require complex and expensive IT programming.
      3. Provide additional details in rule-making which clarify whether the NDC reported on the claim must be from the package administered to the patient or whether it can be retrieved from a database and be “representative” of the drug administered to the patient, but not necessarily the exact NDC administered to the patient.
      4. Provide additional details in rule-making if multi-day therapies with NTAP-eligible drugs must be combined into a single line and reported only once at the start of therapy, or whether the NDC number can be reported on each DOS with the appropriate NDC unit of measure and NDC billed units and CMS will provide software logic to recognize the NDC and provide appropriate payment even if the NDC number is reported on multiple dates of service.
      5. Provide a notification process when a new NDC is marketed after final rule-making for the NTAP-eligible drug. This may be a result of improved packaging or when additional vial sizes are marketed.

We appreciate CMS’ proposal to provide a streamlined mechanism for reporting certain drugs on inpatient claims as an alternative to ICD-10-PCS codes and appreciate the opportunity to comment on this proposal.

Regards,

Maxie Friemel, Pharm.D., CRCR.

Visante, Senior Director, Pharmacy Revenue Cycle

Agatha Nolen, Ph.D., D.Ph., FASHP, CRCR 

Visante, Billing Consultant