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Navigating HCPCS Coding Changes to Prevent Medical Reimbursement Challenges

By Chris Webb and Jason Young

When it comes to medical reimbursement, there are several challenges that both payers and providers face in today’s rapidly changing regulatory environment. With new drugs and generics entering the market at breakneck speed and supply chain issues continuing to plague manufacturers, it can be difficult for stakeholders to keep up with the Healthcare Common Procedure Coding System (HCPCS), especially considering that July will mark the eighth consecutive quarterly update to HCPCS codes. While HCPCS codes used to be updated on an annual basis, more recently CMS has moved to a quarterly schedule, increasing the frequency with which providers and payers must check for new coding requirements.

This constant fluctuation has health plans struggling with how often to react and update their reimbursement schedule, and also creates challenges for providers with regard to keeping their records and billing up to date. However, it’s crucial to get it right: The first step to a successful reimbursement strategy is to ensure that a product has the most appropriate HCPCS code. Incorrect coding impacts financials and, most importantly, can delay or impact patients getting the therapies they need.

HCPCS code changes cause drug products to move to different billing codes, which ultimately has an impact on their price. For example, the chemotherapy drug romidepsin is a generic injectable that was released in April 2020. It was dispensed as a liquid dose, as opposed to the trade name products currently available at the time, which were manufactured as a dry powder that was reconstituted before injection. When it came time to categorize the new generic according to HCPCS, there were several possible codes that could have applied. However, due to its unique nature, romidepsin was initially categorized under a “not otherwise classified” code until October 2020, when CMS approved a code for outpatient use. Providers then got comfortable using this code and all seemed settled. However, fast-forward to October 2021 when the product received a new permanent code that required a complete recalculation of the billing units, which lead to confusion among providers who got used to billing it according to the original classification.

Overcoming the Complexity

In addition to keeping up with constant coding changes, one of the most difficult parts of reducing inconsistent claims is that there are multiple different sources of coding information. Whereas HCPCS codes are released in a quarterly file from CMS, Current Procedural Terminology (CPT) codes are published annually by the American Medical Association, and National Drug Codes (NDC) are established by the FDA and can be updated on a daily basis.

HCPCS codes also have an added layer of complexity due to the fact that they are categorized into two levels. Level I consists of the CPT codes released by the AMA, and Level II coding is used primarily to identify products, supplies and services not included in CPT codes, such as ambulance services and medical supplies used outside a physician’s office. With all these nuances, how can payer and provider organizations possibly be expected to keep up?

As medical reimbursement challenges continue to grow, it’s critical that healthcare companies adopt a governed, data-driven reimbursement strategy to help them navigate the many challenges within billing, coding and claims adjudication. Furthermore, centering this strategy around a comprehensive, uniform data set—especially one that’s updated in a timely manner—will help keep billing simple and reliable, increase accuracy and greatly reduce the amount of time spent on researching and compiling. While some organizations choose to implement a web-based application as a reference tool, others choose to integrate data directly into various healthcare systems, such as financial and analytic platforms, pharmacy operations, network contracting and claims management. Either way, the more streamlined and data-driven a company’s reimbursement strategy, the more likely that billing and claims processes are handled smoothly

In today’s continually evolving regulatory environment, complexity is a given, but that doesn’t mean that organizations need to resign themselves to the burden of constant upkeep. Making a data-driven reimbursement strategy a priority will ensure that organizations aren’t being left behind in the struggle to navigate medical drug spend.

To see how RJ Health, an MMIT company, can help you with HCPCS coding changes and understand what payers and providers can do to stay up to date, learn more about our ReimbursementCodes solution.

Chris Webb

Chris Webb

Chris focuses on creating new and innovative products using RJ Health’s Drug Information Datasets. Using his experience with our clients, Chris develops our SaaS offerings to streamline work flow and the enhance the application of our data.

Jason Young

Jason is responsible for the management of all data which drives RJ Health’s core product offerings and solutions. He has significant input into the content, design, and development of new and existing data offerings. Using his insights and experiences gained working in benefit administration roles and his advanced knowledge of the RJ Health core data, he is able to assist clients with implementation to create optimal outcomes through the utilization of RJ Health’s comprehensive medical specialty drug data.

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