Medicare payments for Neulasta injection claims paid by Wisconsin Physicians Service (WPS) from 2004 through 2007 were not always appropriate, according to a recent Office of Inspector General (OIG) report. These inappropriate Neulasta injection payments occurred because providers claimed excessive units of service, the OIG said. Providers subsequently contacted by WPS attributed the incorrect submission of units to clerical errors made by their billing staff and changes made to billing codes.

Individuals receiving chemotherapy treatments often suffer from a lack of white blood cells. The drug pegfilgrastim (Neulasta) is injected to stimulate the bone marrow and promote the growth of white blood cells.

From 2004 through 2007 providers nationwide submitted over 1 million claims for Neulasta injections resulting in payments of approximately $1.9 billion. WPS was the Medicare Part B carrier for providers in Illinois, Michigan, Minnesota, and Wisconsin during that time and processed over 130,000 claims for Neulasta injections.

According to the OIG report, WPS overpaid $655,149 for 462 claims submitted by 44 providers during the three-year timeframe. Of the $655,149 inappropriate Neulasta injection payments, a total of $646,845 for 461 claims remained outstanding at the start of the OIG audit. Prior to the audit, one provider had refunded an overpayment for one claim of $8,304.

Coding Guidance

In 2003, the Centers for Medicare & Medicaid Services (CMS) assigned the administration of Neulasta injections HCPCS Level II code Q4053 Injection, pegfilgrastim, 1 mg, which defined the unit size as 1 milligram. Providers billed for six units because the drug is usually injected using a pre-filled syringe containing 6 milligrams of Neulasta. Beginning Jan. 1, 2004, the HCPCS Level II code changed to J2505 Injection, pegfilgrastim, 6 mg, which defined a unit as 6 milligrams rather than 1 milligram.

CMS also revised Medicare billing policy to read: “Claims for Pegfilgrastim J2505 [Neulasta] shall be submitted to Medicare contractors so that the units billed represent the number of multiples of 6MG provided, not the number of MGs.”

Although providers used the new HCPCS Level II code J2505, the OIG says in the report, some continued to submit claims for six units of service which totals 36 mgs or the equivalent of six Neulasta injections instead of one unit of 6 mgs for each Newlasta injection—and carriers did not always identify the error due to insufficient edits.

The OIG report gives this example:

In CY 2004, a provider incorrectly billed six units of Neulasta injections, instead of one unit, which resulted in an overpayment of $2,733. The CY 2004 Medicare payment allowance limit for the administration of six units of Neulasta injections was $12,036, while one unit of Neulasta injections was $2,006. The provider submitted a claim totaling $5,924 for six units, an amount below the $12,036 ceiling for six units. Therefore, WPS subsequently paid $4,739 (80 percent of the $5,924 billed amount) to the provider because the claim was below the ceiling for six units, resulting in an overpayment of $2,733 ($4,739 paid less the $2,006 ceiling for one unit).

OIG Recommendations

The OIG recommends in the report that WPS:

• recover the $646,845 in identified Neulasta injection overpayments; and
• improve internal controls related to Neulasta injection claims processing and payments.

In written comments to the OIG draft report, WPS stated that it is actively addressing the OIG’s recommendations, recouping confirmed overpayments, and abiding by the four-year reopening guidelines.

Recent guidance issued by the Centers for Medicare & Medicaid Services (CMS) clarifies the appropriate use of modifier JW Discarded drug not administered when reporting unused units of drugs and biologicals for reimbursement. Failure to follow this guidance could result in excessive units billing.

Medicare reimburses physicians, hospitals, and other providers or suppliers for the unused units of a single-use vial or other single-use package as well as the dose administered up to the amount indicated on the vial or package label.

Properly Use Modifier JW

Report the number of unused units of a drug or biological on a separate line and append modifier JW to the applicable HCPCS Level II code.

CMS provides this example of proper billing:

“a single use vial that is labeled to contain 100 units of a drug has 95 units administered to the patient and 5 units discarded. The 95 unit dose is billed on one line, while the discarded 5 units may be billed on another line by using the JW modifier. Both line items would be processed for payment.”

When Not to Use Modifier JW

Do not use modifier JW to report unused units if the amount used was less than the billing unit. When the billing unit is equal to or greater than the total actual dose and the amount discarded, modifier JW is not permitted.

CMS provides this example of improper billing:

“One billing unit for a drug is equal to 10mg of the drug in a single use vial. A 7 mg dose is administered to a patient while 3mg of the remaining drug is discarded. The 7mg dose is billed using one billing unit that represents 10mg on a single line item.  The single line item of 1 unit would be processed for payment of the total 10mg of drug administered and discarded. Billing another unit on a separate line item with the JW modifier for the discarded 3 mg of drug is not permitted because it would result in overpayment.”

Refer to CMS Transmittal 1962, Change Request (CR) 6711, issued April 30, for specific language.

The Centers for Medicare & Medicaid Services (CMS) terminated its contract with Fox Insurance Company, March 9, after an onsite review of the drug plan and its services confirmed suspected noncompliance. More than 123,000 Fox enrollees have until May 1 to choose a new Medicare prescription drug plan. In the interim, beneficiaries can obtain their prescription drugs through the Limited Income Newly Eligible Transition (LI NET) program, run by Medicare and administered by Humana.

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The Centers for Medicare & Medicaid Services (CMS) recently issued a Medicare Learning Network (MLN) article to clarify how clinical diagnostic laboratories should bill for certain types of tests covered by Medicare and paid under the Clinical Laboratory Fee Schedule (CLFS).

Specifically, MLN SE1001 addresses how labs should presently bill new 2010 HCPCS Level II codes G0430 and G0431 and existing CPT® codes 80100 and 80101.

The current descriptions for said codes are:

• 80100 Drug screen, qualitative; multiple drug classes chromatographic method, each procedure
• G0430 Drug screen, qualitative; multiple drug classes other than chromatographic method, each procedure
• 80101 Drug screen, qualitative; single drug class method (eg, immunoassay, enzyme assay), each drug class
• 80101QW Drug screen, qualitative; single drug class method (eg, immunoassay, enzyme assay), each drug class – CLIA waived test
• G0431 Drug screen, qualitative; single drug class method (eg, immunoassay, enzyme assay), each drug class

From Jan. 1 to March 31, labs should report 80100 for qualitative drug screening tests for multiple drug classes when using chromatographic methods and G0430 when not using chromatographic methods.

HCPCS Level II G0431 is a direct replacement for CPT® code 80101. Although CMS is delaying implementation of G0431 until April 1, the agency instructs labs who do not require a Clinical Laboratory Improvement Amendments (CLIA) certificate of waiver to report qualitative drug screening tests for a single class of drugs, regardless of testing methodology, using G0431. Presently, labs requiring a CLIA certificate of waiver should continue to bill 80101QW.

By now the official CPT^® 2010 manual is either in your hands or on its way. To ensure coding accuracy, however, you will need to update your book with some new information now posted on the AAPC Web site.

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Health care providers in Colorado, New Mexico, Oklahoma and Texas submitting claims to TrailBlazer Health Enterprises should be aware of revisions the jurisdiction 4 (J4) Part A and Part B Medicare Administrative Contractor (A/B MAC) made, Oct. 5, to two local coverage determinations (LCD).

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