CMS: Hospital billing can improve drug/biological rate setting under OPPS

The methodology that the Centers for Medicare and Medicaid Services (CMS) uses to pay separately payable drugs and biologicals under the hospital outpatient prospective payment system (OPPS) "is limited by the available information regarding packaged drugs," said agency officials during last week's Hospital and Hospital Quality Open Door Forum. "In particular, we do not know what drugs are represented by the charges for drugs that hospitals report under pharmacy and IV therapy revenue codes without HCPCS codes."

The solution? "We determine whether drugs receive separate payment based on charge information reported with drug HCPCS codes, so more complete data from hospitals on which drugs are provided for specific episodes would help improve payment accuracy for separately payable drugs in the future," explained CMS officials. "OPPS rate setting is best served when hospitals report charges for all items and services that have HCPCS codes under those HCPCS codes--whether or not payment for the items and services is packaged or separately paid."

Billing drugs and biologicals with HCPCS codes under revenue code 0636 (whether they are separately payable or packaged) "would be consistent with NUBC [National Uniform Billing Committee] billing guidelines and would provide us with the most complete and detailed information for rate setting," they suggested. "We encourage hospitals to change their reporting practices if they are not already reporting HCPCS codes for all drugs furnished if specific codes are available."

To learn more:
- access the Hospital Open Door Forum webpage

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