Medicare Part A Pass-Through Payment Update CY2005

• Medicare Payment Policy under the Physician Fee Schedule for Calendar year 2005
• Medicare Payment Policy under the Physician Fee Schedule for Calendar year 2005 Continued
• Medicare Hospital Outpatient Prospective Payment System (OPPS) Changes for CY2005
• Medicare Hospital Outpatient Prospective Payment System (OPPS) Changes for CY2005 Continued
• Revisions to the Physician Fee Schedule under Medicare Part B for Calendar Year 2005
• Revisions to the Physician Fee Schedule under Medicare Part B for Calendar Year 2005 Continued
• Revisions to the Physician Fee Schedule under Medicare Part B for Calendar Year 2005 Continued (2)
• Medicare Part A Pass-Through Payment Update CY2005

As we have reported in past issues of Reimbursement Alert, allowables for the Medicare Part A Pass-Through Payment had been established for discharges occurring on or after October of the current year through September 30 of the following year. Although the Health Care Financing Administration (HCFA), now referred to as The Centers for Medicare and Medicaid Services (CMS), had considered changing the payment methodology previously employed, this was not done. The Medicare Prescription Drug, Improvement and Modernization Act of 2003 (MMA) changed the way that drugs and biologicals were to be reimbursed in virtually every site of service under Medicare. However, the MMA did not impact the continual reimbursement, or methodology, of blood clotting factor when administered to a Medicare inpatient.

The new allowables were established for each unit of clotting factor based on the average wholesale price (AWP). CMS referenced AWP data from Red Book. As described in CMS’s Common Procedure Coding System (HCPCS), the add-on payment amount for each clotting factor is based on the lowest AWP of the several products available in that category of factor, discounted by 5 percent.

EFFECTIVE DATE: October 1, 2004

For discharges occurring on or after October 1,2004 through September 30, 2005, the payment rates are as follows:

Payment will be made for the blood clotting factor only if one of the following hemophilia ICD-9 CM diagnosis codes is listed on the bill:

286.0 Congenital factor VIII disorder

• 286.1 Congenital factor IX disorder
• 286.2 Congenital factor XI disorder
• 286.3 Congenital deficiency of other clotting factors
• 286.4 Von Willebrand’s Disease

As stated in earlier Reimbursement Alert issues, billing specifications for the HCFA claim 1450 and EMC formats will remain per “billable units.” Each form allows for three positions only; therefore, 100 international units of blood clotting factors will be reported as one unit on the claim form. If the number of units provided is between even number hundreds, round to the nearest hundred. Units 1 through 49 are rounded down, and units 50 through 99 are rounded up. Revenue code 636 should be specified along with the appropriate HCPC (or “J” code) and ICD-9-CM code.

Keep in mind that if the reimbursement allowable for Factor VIII is $0.87 per international unit, you must multiply this allowable by 100 before extending the calculation to the total number of billable units dispensed to the patient. For example, if the patient received 100,000 units, you would bill 1,000 billable units. The billable units are then multiplied by $87.00, thus providing an allowable of $87,000 (1,000 x $87.00).

Additionally, it is important to remember that once the payment has been calculated, it is subtracted from the charges submitted to the PRICER so that it is not included in the cost outlier computation.

Questions related to exact allowables and coding clarification should be directed to the Medicare Part A Fiscal Intermediary. All inquires submitted to the Part A Intermediary should be in writing, preferably by way of a “Freedom of Information” (FOI) request. ZLB Behring’s Department of Reimbursement Services can provide additional information on submitting FOI requests by contacting our toll-free answer line at 1-800-676-4266.

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ZLB Behring assumes no responsibility for the individual interpretation of any material, facts, or references provided within the context of its publication of Reimbursement alert.