Drugs and biologicals are generally labeled with JXXXX series HCPCS, but there are a growing number of QXXXX, AXXXX, and now CXXXX. The C codes have generated some confusion and are a pain point in maintaining the CDM. But what makes a C code different when it comes to the pharmacy revenue cycle?
To start with a little history, C codes were created as a way to implement Section 201 of the Balanced Budget Refinement Act (BBRA) of 1999 or “pass through” payment. The C codes represented items that qualified for payment under the Outpatient Prospective Payment System (OPPS). Primarily, this was used exclusively for services that qualified for pass through payment. Drugs and biologicals, when qualified, are granted pass through status for 2 to 3 years before being assigned as non-pass through or packaged (see previous newsletter). CMS does not depend on the HCPCS assignment for a drug and biological for it to receive pass through status. Drugs may be assigned a C code, temporarily, until they are assigned a permanent HCPCS code.
Prior to 2006, C codes were exclusively used by hospitals and were not payable by any other provider outside of the OPPS. As the C codes evolved, other providers requested the use of C codes. Effective October 1, 2006 following providers may elect to use a C code, but are not eligible to receive pass through payment:
Critical Access Hospitals (CAH)
Indian Health Service Hospitals (IHS)
Hospitals located in American Samoa, Guam, Saipan or the Virgin Islands
Maryland waiver hospitals
The major call out in this list is missing professional or physician based offices. These locations are paid under the Medicare Physician Fee Schedule (MPFS) and are not considered an OPPS provider. Therefore, C codes are not eligible codes and an alternative non specified HCPCS may be required to bill as an alternative.
Shout Outs! Pharmacy and Revenue Integrity – keep a close eye on any drugs assigned with a C code. These codes are temporary codes that may be replaced by permanent HCPCS codes. When they are updated, CDMs should be immediately updated or denials may be received.
Pharmacy and Revenue Integrity teams with physician based offices – conduct a review of any C codes that potentially were billed in this setting as they may have ended in a denial or non-payment. Consider using an alternative J3590 or other non-specified code as an alternative.