1 drug reimbursement coding and pricing guide® g-2009 r·j health systems international, llc

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Drug Reimbursement Coding and Pricing Guide®

G-2009

R·J Health Systems International, LLC

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The Drug Reimbursement Coding and Pricing Guide® is the only comprehensive system which uses a consistent and proven methodology to accurately update the price of over 41,000 drug codes (NDC’s).

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Drug Reimbursement Coding and Pricing Guide® The Problem

• Many health plans reimburse via a formula unique to each plan based on AWP - no consistency.

This lack of consistency leads to a number of problems:• Negative financial impact on payer• Negative financial impact on providers• Disharmony amongst payer, providers, members, and employers (self-

funded)• Inability to accurately contract or forecast• Increased administrative costs• Regulatory violations

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Drug Reimbursement Coding and Pricing Guide® The Problem (cont’d)

5 Possible Scenarios

1) Providers may be under/over paid. 2) Providers use one source for AWP information and payers use a

different source leading to mismatch of AWPs and an increase in administrative costs to resolve issues.

3) Claim is rejected leading to disharmony amongst payer, provider, patient, employer and may have regulatory implications for payer.

4) New drugs and vaccines fall into “unclassified” HCPCS and CPT category and claims are often paid incorrectly.

5) Bill correctly, reimburse correctly

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Drug Reimbursement Coding and Pricing Guide® The Solution

What is it?

The only comprehensive coding and pricing guide for CMS (Centers for Medicare & Medicaid Services) developed HCPCS (Healthcare Common Procedure Coding System) drug codes - including J, A, B, C, K, P, Q, S and WW Codes as well as relevant AMA (American Medical Association) developed CPT (Common Procedural Terminology) codes for vaccines, immune globulins, and toxoids.

What does it do? The Drug Reimbursement Coding and Pricing Guide® provides managed care

organizations (MCOs), provider groups and hospitals with a fast and efficient means to obtain up-to-date drug coding, pricing and reimbursement information.

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Drug Reimbursement Coding and Pricing Guide® Current Pricing Methodology

The following procedure has been adapted for every drug code (J, A, B, C, K, P, Q, S, WW, Vaccines, etc) that resides in the Drug Reimbursement Coding and Pricing Database. The Code Price (AWP/WAC based) for each drug code is determined from the prices published for the appropriate NDC (National Drug Code) numbers and supplied to R·J Health Systems by Medi-Span, First Data Bank, Red Book, Wholesalers and Manufacturers utilizing the methodology noted below. R·J Health Systems reviews each NDC number as to its availability, nationwide, to a provider before including that NDC in the pricing calculation.

Code Price Calculation Criteria

1. For a Single-Source drug or biological; the code price equals the NDC with the lowest AWP/WAC of the single source product corresponding to the description of the drug code

2. For a Multi-Source drug or biological; the code price is equal to the lesser of the median AWP/WAC of all the generic forms of the drug or biological or the lowest NDC of the brand name product corresponding to the description of the drug code

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R•J Health Systems' Research• Issues with current National Data Sources (Medi-Span, FDB, Red Book)

– Variations in calculation of AWP among sources

• WAC plus %

• Manufacturer’s suggested AWP

• Direct Price plus %

• Hospital List Price (plus %)

• Wholesaler Surveys

• No consistency within a single source (in both base price used and in percent mark-up).

• Timeliness of updates (not all sources update data at the same time)

• Brand vs generic classification (need to review multiple fields in the National Data Sources to determine accurate product status)

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Drug Reimbursement Coding and Pricing Guide® R•J Health Systems' Solution

R·J Health Systems has developed its own “NDC/AWP/WAC database file” with information supplied by Medi-Span, First Data Bank and Red Book. This information is validated and supplemented with information supplied by wholesalers and drug manufacturers. Procedure:

The files supplied by Medi-Span, First Data Bank and Red Book are examined on a monthly basis. If there is a NDC, AWP or WAC discrepancy between the Medi-Span, First Data Bank and Red Book files, inquires, via letter, phone or e-mail, with wholesalers (AWP validation) and the respective pharmaceutical manufacturer (NDC/WAC validation) then take place to validate the correct information.

The information provided by a specific pharmaceutical manufacturer (NDC/WAC) and/or wholesaler (AWP) overrides any information printed in the Medi-Span, First Data Bank or Red Book file update.

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R•J Health Systems' Validation Process

• Use multiple sources to verify status of NDCs

• Use multiple sources to verify accuracy of AWP/WACs

• Continual maintenance of NDC to HCPCS/CPT Drug Code crosswalk

• Accurate designation of brand vs generic

• Compare product availability to code descriptor

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R•J Health Systems' Solution

• Customization– RJHS provides Code Price, Code Price -5%, -10%, -15%, -20% as

base rates along with Medicare Allowable rates. These rates can be customized to meet the needs of any user (payor, provider, etc.)

– Customized databases are available in electronic and website formats

• Services– RJHS provides complete customer service functions related to

drug coding and pricing– RJHS can act as a direct call center or through referrals from your

organization

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Highlights

• CMS HCPCS Drug Code descriptions – J-Codes - permanent code for drugs billable under Medicare– Q-Codes - temporary codes for drugs billable under Medicare– G-Codes – drug administration codes – P-Codes – blood related products (albumin, plasma protein fraction)– A-Codes - miscellaneous supplies (needles/syringes, glucose test strips,

etc.) and radiopharmaceuticals– B-Codes – enteral nutritional products– S-Codes - temporary codes for commercial carrier use– C-Codes - services paid under the Outpatient Prospective Payment System– K-Codes - assigned to Durable Medical Equipment Regional Carriers

(DMERC) and miscellaneous drugs– E-Codes - codes for Durable Medical Equipment (Glucometers, etc.)

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• CPT Codes for Vaccines, Toxoids and Immune Globulins and drug administration

• Multiple search options (Drug Name, Drug Code, NDC, ICD-9-CM)

• History of AWP price changes since 1/1/2000

• WAC Code Price added in July 2008

• Medicare Allowable Pricing as defined by the Medicare Prescription Drug Improvement and Modernization Act (MMA) of 2003– ASP (Average Sales Price) plus 6% (can be customized)

• APC (Ambulatory Payment Classification) codes and rates and related Status Indicator and Revenue Codes for Hospital Outpatient use



Highlights (cont’d)

• How to bill using a CMS 1500 and UB-04 form in various scenarios• Code Status (sections for New Codes, Deleted Codes, Code

Description Changes)• Monthly newsletter - summary of latest updates to the Drug

Reimbursement Coding and Pricing Guide® /Database• Monthly report for all Code Price changes which includes dollar and

percent change from previous price

• Identification of NDCs at or below the Code Price (AWP based) for each code

• Coding/Pricing Updates - provided on a monthly (website, electronic media) or quarterly (electronic media, hardcopy) basis




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• All oncology products and some non-chemotherapeutic products coded with the appropriate ICD-9-CM Codes (clinical information is also provided)

• NDC crosswalk file for the 41,000+ NDCs in our database providing:– NDC crosswalk by drug code; listing all NDCs which are billable under

that code

– For each NDC in the crosswalk; the number of billable units as related to the drug code description per vial/ampule/syringe, etc. as well as per package

– NDC crosswalk for all NOC (Not Otherwise Classified) codes including NDC level AWP/WAC information




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• New Drugs, Biologicals and Vaccines (without an assigned drug code)

– If a code has not been assigned, a product specific Clinical and Billing document is provided which details coding, pricing and clinical information for the drug product

• Grouping by therapeutic class (e.g. Oncology products)

• CPT Code/G-Code Administration Crosswalk – crosswalk for each HCPCS and CPT drug code identifying appropriate CPT and G-Code administration codes for drugs in that code

• Quarterly AWP to ASP comparison report




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In Development

• ICD-9-CM cross reference for all HCPCS and CPT drug codes – Section for:

• FDA approved

• Compendium approved indications (American Hospital Formulary Services [AHFS], DrugDex, Clinical Pharmacology, National Comprehensive Cancer Network [NCCN])

• FDA approved dosing ranges for each HCPCS/CPT drug code

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In Development (cont’d)

• MAC pricing for HCPCS/CPT Codes when generic products are available

• Trending reports/measurement tools (e.g. significant price changes in commonly used products)

• Patient Drug Information Leaflets on website for provider use in patient counseling

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Benefits to Payor

Accurately updated Drug Codes and Prices:• Prevents over/under payment and inaccurate coding• Decrease claims challenges/number of claims

submitted for “reconsideration”• Decreases calls to/from provider relations• Allows processing of claims more quickly• Improves efficiency of staff• Provides accurate information for forecasting and

contracting

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Benefits to Provider

• Informs provider of exactly what they will be reimbursed

• More accurate claims submission

• Claims are processed more quickly

• Decrease in rejected claims

• Allows for accurate forecasting and contracting

• NDC’s converted to J-codes and vice-versa

• Improves staff efficiency

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Available Formats

1. Hard Copy - Book Form for quick reference (provided quarterly)

2. Electronic Media – ASCII/Excel files of current pricing for system downloading - for claim adjudication (provided monthly or quarterly - determined by client)

3. Internet Access to www.ReimbursementCodes.com via Assigned Password - can be linked to and from other websites

1 drug reimbursement coding and pricing guide® g-2009 r·j health systems international, llc

Documents

llc drug reimbursement

uptodate drug coding

drug code j

singlesource drug

multisource drug

llcdrug reimbursement

drug codes ndcs

pricing calculation