It may seem like unnecessary work to review the items on our Quarterly Checklist each quarter to identify changes and updates. Some tasks may be delegated to other groups such as Chargemaster Managers or Billers, but for one task, pharmacy is the best department to “connect the dots”: Restated Payment Rates.
Our “action to take” recommendation is: “Map restated payments to the effective quarter, determine impact, and rebill as necessary.” We believe that the pharmacy department is in the best position to take this action and in some cases, increase pharmacy revenue. Let’s walk through an example in more depth.
As noted on our Quarterly Checklist, CMS posts “restated payment rates” each quarter. For January 2022, the file has this information:
Here are the steps to process this file to determine impact:
1. Review Addendum B for the appropriate quarter to determine what the posted payment rate was. Since the “payment” column includes the “copay”, it is only necessary to add the payment column from the previous quarter.
2. Calculate the payment difference.
3. Add the “short descriptor” from Addendum B to determine the HCPCS code dose amount.
4. If the “short descriptor” from Addendum B does not include the HCPCS code dose amount, go to the Alpha-Numeric HCPCS File on the HCPCS Quarterly Update page to retrieve the “long description”. Use the HCPCYYYY_MMM_ANWEB_vN.xlsx file.
5. Add prescribing information and calculate the average adult dose using 100 kg or 3M2 for BSA. For every 3 week regimens use 5 potential doses; for every 4 week regimens use 4 potential doses (assumes patient received first dose on first day of quarter).
6. Calculate the average payment difference for one quarter for one patient to determine financial impact of restated rates. In consultation with the Finance Department, Pharmacies should establish policies as to which payment difference amounts are “significant” to determine rebill potential. (In our example for January 2022, some providers would consider the $1320.00 to be significant and review accounts with HCPCS code J9353)
7. When rebill thresholds are met, Pharmacy should estimate the total change in revenue based upon actual patient usage and review potential rebills for the quarter with Finance to obtain authorization for rebilling. (Timely filing for Medicare is one year from date of service but rebills should be generated as soon as authorized).
8. Managed Care Contracting group should be notified to determine if any managed care contract payments are based upon Medicare rates and if rebilling of any commercial/Medicare advantage accounts is warranted.
9. Your completed analysis for finance review will look like this:
SHOUT-OUTS 1. The Department of Pharmacy is in the best position to evaluate restated payment rates for drugs each quarter and provide information to Finance for potential rebilling opportunities.
2. The Finance Department should determine in advance a “payment threshold difference” which is considered “significant” to warrant further investigation into rebilling opportunities.
3. The Managed Care Contracting group should be notified if any HCPCS codes are selected to be rebilled to determine if any Commercial/Medicare Advantage payments are similarly impacted and to determine if those accounts should similarly be rebilled.
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.