The concept of home infusion has been around for decades, but it is not a common product line in home care. However, it has always been a profitable service line when managed well. Those in the industry have been on a wild ride over the past few years, between Health Insurance Portability and Accountability Act (HIPAA) coding (a first for standardization of infusion) and Part D Medicare coverage; we could say these are the best of times or the worst of times.

Before HIPAA, there were no standard codes, and most of us worked with our individual managed care payors to create codes and what they in-cluded. Sometimes the codes were CPTs and other times they were completely made up. My favorite with one payor was XX010, which stood for IV antibiotics, per diem—including all equipment, supplies, nursing, and pharmacy management. Needless to say, this code is no longer an option under HIPAA.

We now have S codes and others. The problem is that HIPAA only deals with codes; it has nothing to do with coverage. The creation of the codes allows us more easily to know what to code it, but not what it includes or how we are paid. Work with payors to know what codes they acknowledge under HIPAA and then what the codes include. HIPAA rules indicate that payors cannot change the code definition, but they can choose which codes to recognize.

The new term for what is included in the per diem is “incident to the therapy.” For example, heparin and saline flushes are incident to the infusion therapy, since the payor technically can not say they are included in the per diem. Trust me, it is not standard, and as far as I know, there are no HIPAA police trying to figure out who is not using the coding system as it was intended!

The HIPAA standard codes are numerous and complicated, and some are virtually impossible to set up within the common software applications. For example, the SH modifier stands for second therapy, and often there is a reduction of 50% on this. I have not seen a software system that can handle this. As we develop coding structures, it would be wonderful if we could work with our software vendors to prevent manual intervention on the billing side.

Standard Coding: Help or Hurt?
So how has the standard coding helped or hurt us? It has helped to create a code we can all reference and identify.  It has allowed standard language for what is included or should be included.  It has hurt us because it has typically resulted in a reduction of the per diem fee.

It also has hurt us by requiring more itemized billing. Where I used to simply control the costs of the nursing visits, I now have to create invoices for the visits. It is more important than ever to be sure all visits are captured and billed with the reduction in the per diems.

HIPAA coding also intended that the infusion provider would bill all drugs as line items, including diluents and flushes with national drug codes (NDCs), not the traditional HCPCS codes. In my experience, I have seen less NDC code billing with the HIPAA code sets than before. Many payors chose to move all infusion to electronic billing, and traditional payors cannot process NDC charges. ANSI 837-mandated claim formats cannot handle the 11-digit configuration of this structure.

Prior to standard coding, many payors required the NDC number in addition to the J code, and would process infusion claims manually, looking at the average wholesale price (AWP) as the standard for reimbursement. Now, many of the payors have moved to maximum allowable charge (MAC) amounts. This allows the insurance company to set up pay tables based on J codes, so claims systems can process without manual intervention. What would be the point of receiving electronic claims then having to manually price the drug?

The strategy of buying drugs with the maximum difference between cost and AWP has changed to lowest cost. Payors now have a source that allows them to calculate a MAC amount looking at many sources, including Redbook, Firstdatabank, Medispan, and ASP.  Today’s strategies include maximizing the dollar amount between the MAC amount paid and your cost. Payors are notorious for adjusting MAC fee schedules, so be sure to request these frequently from your payors and compare them to costs. I have also seen payors be more willing to adjust the MAC amount when provided evidence on the cost of a particular drug to providers. It is clear that HIPAA has changed the playing field for infusion. Providers have had to redesign the whole process from drug purchasing to contracting for nursing services.

Should you participate in Part D?
Since we have clearly survived the HIPAA changes, what impact is Part D having on the infusion industry, and what are providers doing? As with many in the pharmacy business, January 1 wreaked more havoc than any could have anticipated.  

The infusion industry has reacted in different ways. Many have chosen not to participate at all with Part D, others have chosen to work only with the Medicare Advantage Prescription Drug Plans (MAPDs) within their service areas, and others are scrambling to sign dozens of pharmacy contracts. So which is the right way to go?  

Not participate? Well, you may be leaving money on the table. There is coverage for the medication component, so why not? Patients who have Part D do not want to pay for medications if they have coverage, and they may choose other providers that will bill Part D.

How about participating a little with the MAPDs? This is a good strategy, and it allows you to partner with plans in your service area, but this may make it difficult for discharge planners and physician offices to know exactly when to refer to you. MAPDs have also had multiple prescription drug plans depending on the groups enrolled. Should you sign contracts like they are going out of style? This will provide the easiest marketing strategy in that you can hang a sign that says “Medicare Part D—Yes!” But it’s tricky for many reasons.

Reason #1: Infusion providers usually are not set up to process typical retail transactions. We file our claims in the ANSI 837 format, and these pharmacy plans require the NCPDP (National Council for Prescription Drug Programs) transaction sets typical of retail pharmacies. Many have installed additional software applications to allow for the online adjudication of these charges. Even though many of the larger home-infusion applications have dabbled in the online-adjudication transactions, it has not been a big push in the industry—until now.  

Reason #2: Not only are there too many plans, there are tiers within the plans. Too much choice can create paralysis, and this logic applies to the volume of MAPDs and prescription drug plans (PDPs). If you do choose to sign up, contact your drug distributor. Many networks charge a flat monthly fee and have many of these pharmacy plans enrolled. With one network (Amerisource Bergen, for example), you have access to many PDPs for about $40 per month. Even with networks, there are still players in the PDP arena with whom you will need to sign separate contracts, such as CIGNA.

Reason #3: Now that you have contracts with the plans, how do you know what drugs are in the formulary? You adjudicate the claim online before determining whether you can provide and/or use a Web-based application that touts access to all Part D formularies. Remember that Part D does cover infusion therapy. Although it is only the drug component, it is more coverage than these patients had in the past. So if you are providing infusion therapy for patients paying privately, why not participate in Part D?

The Process Under Part D
The one difference with Part D coverage is a revamping of the operational process for infusion providers. The concept of filing the claim was always after the fact, downstream from the process of accepting a referral and servicing the patient. Infusion companies that are maximizing this new coverage have actually placed billing personnel in the pharmacy itself. They research formularies, adjudicate the claim online as part of the intake process, and then determine whether to accept the referral—or how much the patient has to pay for services.

The collection of private pay money as part of the intake process has increased greatly as well. Since Part D covers only the medication, it is important that the other components of the therapy are paid for as well, and let’s not forget the donut hole for medication coverage under Part D. Some infusions are so pricey that patients hit their donut hole and catastrophic cap in one round of therapy. Since many of these patients are homebound, Part A should cover nursing visits and most supplies as part of the episodic rate. This is a great way to partner with your local agencies to provide complete therapy for patients in your service area. A similar process exists for refills; each order needs to be adjudicated prior to mixing and dispensing, just like at a retail pharmacy. Conversation with the patient needs to occur before the medication is provided to ensure that payment is made at the time of delivery.

Infusion companies have had two great opportunities to increase the visibility of infusion as a core product line with HIPAA coding and Part D coverage. It is important to optimize processes to ensure that you are keeping up with the latest changes and not living the dream of the 1980s when we received $300 per day almost everything.

Kim Brummett is vice president of contracting and reimbursement for Advanced Home Care, Greensboro, NC. Along with additional consulting work, she is chairperson of the Region C Advisory Council for Palmetto GBA, and can be reached via e-mail: kbrummett@advhomecare.org.