Oncology Services Underpayment Risks

Clinical Complexity and Compounding Factors Create Costly Underpayments

Oncology providers face a wide variety of claim-level reimbursement hurdles. The high cost drugs utilized during care require detailed and specific coding where small discrepancies can lead to costly billing and coding scenarios.  The recurring and specialized nature of these services also leads to underpayments and denials due to coverage determinations, authorization issues and more.  Even when claims are billed correctly with no denials, complex coordination of benefits can still lead to lost revenue.

High Cost Drugs

Drug Dosage Discrepancies

Oncology drugs are commonly reimbursed per the specific units billed (e.g. Medicare OPPS guidelines).  These drugs are sometimes billed by the vial, injection, or other standardized amount rather than with the correct CMS measurement units.  These cases cause fewer units to be represented on the bill, leading to significantly lower reimbursement.  When one drug is loaded incorrectly into the CDM, it can lead to widespread underpayments for all accounts with the drug billed.  As there are more types of oncology drugs in circulation than any other service area, providers are hard-pressed to keep billing guidelines current.

New Drugs | Billing & Coding Guidelines

On average, the FDA approves 10 novel cancer drugs every year as shown below.  CMS is typically unable to assign specific HCPCS for billing purposes before the drug is in circulation and hospitals must follow atypical billing guidelines to receive reimbursement.

These drugs must be carefully billed to strictly adhere with the CMS new drug billing guidelines.  These guidelines cover HCPCS C9399, J3490 or J9999 accompanied by dosage, date and National Drug Code (NDC) information in the remarks field.

FDA Novel Drug Approvals [1]

Denials

Denied Charges | Medically Unlikely Edit (MUE)

MUE denials occur when HCPCS units are billed at a quantity higher than CMS’s published guidelines.  MUE denials are especially applicable to high cost oncology drug units.  These denials can be caused by incorrect unit multipliers but are occasionally triggered when units are billed correctly.  In these cases, special circumstances, such as patient’s body mass index, must be cited to justify the elevated number of units billed.

Denied Charges | Coverage Determinations

Oncology drugs have strict National and Local Coverage Determinations (NCD and LCD) guidelines requiring specific diagnosis codes in order for drug charges to be covered and payable.  Sometimes a patient’s qualifying diagnosis may be left off the claim or coded as a more general non-covered diagnosis.  These issues lead to both significant line item denials and charges being billed as non-covered due to bill edits.

Due to the recurring nature of chemotherapy and infusion treatment, a patient’s qualifying diagnosis code may be present on some, but not all of the patient’s recurring claims.  This can occur when clinical documentation is sparse for one of the recurring accounts.  Hospitals can review patients’ clinical records from previous stays to determine whether a qualifying diagnosis code is appropriate.

Denials | Authorization

Due to the complex nature of cancer treatment, obtaining the correct referral, authorization and precertification can be difficult as each payer has their own process.  Hospitals can prevent these denials by prioritizing registration and authorization processes on the front-end.  Proactive follow-up is also effective in resolving authorization denials.  Payers often misapply authorization to claims and providers can successfully appeal for medical necessity when extenuating circumstances prevent proper pre-authorization.

Complex Reimbursement

Medicare Reopenings

MUE denials occur when HCPCS units are billed at a quantity higher than CMS’s published guidelines.  MUE denials are especially applicable to high cost oncology drug units.  These denials can be caused by incorrect unit multipliers but are occasionally triggered when units are billed correctly.  In these cases, special circumstances, such as patient’s body mass index, must be cited to justify the elevated number of units billed.

Coordination of Benefits

When a patient has coverage from multiple payers, the secondary payer may be liable for more than just remaining patient liability. These complex reimbursement scenarios are difficult to identify on the front-end as most system calculators do not calculate a contractual allowable for secondary payment.  Hospitals can target commercial payers which pay up to their allowable minus primary payment in order to capture lost revenue.

[1] http://cancerdiscovery.aacrjournals.org

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