Medicare Payment Policy under the Physician Fee Schedule for Calendar year 2005 Continued

• 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

CMS agreed with the commenters that the GAO report did not include consideration for other services provided by blood clotting suppliers, and that it would be appropriate for inclusion in the furnishing fee. Thus, after reviewing the costs associated with sales and marketing, explicit profit margin, and patient management, CMS determined a separate rate of $0.14 per unit for the administration of clotting factor. On January 1, 2005, providers will receive a reimbursement for blood clotting factor based upon a model of ASP plus 6%, AND an additional $0.14 per unit for its administration.

Home Infusion of Intravenous Immune Globulin (IVIG)

In the August 5, 2004 proposed rule, CMS stated that for dates of service beginning on or after January 1, 2004, Medicare would pay for IVIG administered in the home. The benefit is for the drug and not for the items or services related to the administration of the drug when administered in the home, if deemed necessary. CMS released their instruction through a January 23, 2004 transmittal. Several commenters expressed concern for the lack of the costs associated with items and services needed to administer IVIG. The MMA of 2003 provided coverage for the approved pooled plasma derivative (the drug) for treatment in the home; however, the Act specifically precludes coverage of the items and services related to the administration. This will result in no additional fees for the items or services associated with the administration of IVIG in the home beginning January 1, 2005. Congress would have to amend the existing statutory language in order to expand coverage to include reimbursement for the ancillary supplies and services associated with infusion of IVIG in the home.

Another issue brought to the attention of CMS regarding the home coverage of IVIG related to the January 23, 2004 transmittal’s language: “for coverage of IVIG under this benefit, it is not necessary for the derivative (IVIG) to be administered through a piece of durable medical equipment (DME)”. Commenters pointed out that this language has resulted in the denial of coverage of IVIG for patients because Medicare Carriers are using the rationale that it is medically unnecessary to infuse IVIG through an infusion pump, thus making IVIG medically unnecessary. CMS has agreed that the language in their original transmittal was confusing and misleading. Therefore, a new transmittal will be issued removing the DME restriction. It’s important to remember that the home infusion provision for IVIG is only for those patient’s diagnosed with Primary Immune Deficiency (PID). An expansion of home infusion coverage to cover other conditions treated by IVIG would also require Congressional action.

Other CY2005 Changes to the Payment for Physician Services

Some of the other significant changes that were made to the Medicare Physician Fee Schedule are summarized below:

• Increase in the CY2005 conversion factor to $37.8975, implementing a 1.5 percent increase over the CY2004 conversion factor, as mandated by MMA
• 18 new codes to be used for billing for drug administration. CMS has developed and issued temporary codes to allow for payment of certain services provided by physicians beginning January 1, 2005
• Transitional payment increase of 3 percent for certain drug administration procedures for CY2005
• Physicians may bill and receive separate payment for injections and vaccinations, even when performed on the same day as other Medicare-covered services. Previously, Medicare did not allow payment for injections provided on the same day as other covered services

Summary

The changes that will take place beginning January 1, 2005 for Medicare payment/reimbursement of recombinant and plasma-based therapies are significant. Historically, Medicare would reimburse biologicals based upon a percentage of the product’s average wholesale price (AWP). The transitioning to a reimbursement model of ASP plus 6 percent will undoubtedly force many providers to analyze their current business practices, and evaluate the impact these changes will have on their patient and payer relationships. We would suggest that providers work closely with their local Medicare Carriers in determining proper billing and coding guidelines that have been outlined by CMS. Providers should also seek input from their other payers (i.e. private/commercial and Medicaid) to evaluate their current contracts for future reimbursement stability.

Any questions or concerns related to the changes outlined above can be forwarded to our Toll-Free Reimbursement Answerline at 1-800-676-4266.

REFERENCES

Department of Health and Human Services: Centers for Medicare & Medicaid Services; Federal Register Parts 403,405,410,411,414,418,424,484,486. CMS-1429-FC. RIN 0938-AM90: Medicare Program; Revisions to Payment Policies Under the Physician Fee Schedule for Calendar Year 2005.

Medicare Prescription Drug Improvement and Modernization Act of 2003 (Public Law 108-173); Sections 303 and 642

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.