At A Glance

  • Revenue cycle management (RCM) is important in managing the finances associated with expensive drugs.
  • Understanding all the sources of revenue that contribute to full reimbursement is key to maintaining a healthy practice.
  • Staying flexible will help you adjust your RCM protocol as changes occur.

Anti-VEGF injections play a prominent role in retina practice, and receiving prompt payment for these expensive drugs is vital for your practice’s fiscal health. At prices approaching $2,000 per dose for some medications for the treatment of age-related macular degeneration (AMD) and other conditions, it doesn’t take many unreimbursed claims or delayed payments to start affecting your practice’s bottom line.

Financial issues due to drug mismanagement can be avoided in your practice by maintaining an efficient revenue cycle. Reviewing your internal revenue cycle management (RCM) and monitoring it for potential problems can help you to maximize profitability in encounters requiring medication.

RCM starts when you code an encounter and ends when you are fully reimbursed for those services. When a patient encounter includes the administration of high-cost medications, the stakes are high, and RCM deserves extra scrutiny. Delay in reimbursement for drugs can affect your practice’s profitability, as expenses may be paid prior to income receipt.

RCM GOALS

The goal of RCM is to obtain prompt payment. RCM for patient encounters that require the administration of medication may be more complex than for visits with no medication involved. Your practice protocol should have clear goals and should anticipate potential barriers to prompt payment.

RCM for encounters requiring medication should start with a routine review of each claim’s status and should be designed to promptly resolve issues as they arise. By learning the unique challenges presented by your subspecialty or by particular insurance carriers, you can outline a protocol that will help you identify and possibly avoid future problems.

KNOW YOUR PAYERS

Gain a comprehensive understanding of each insurance carrier’s policies regarding intravitreal injection. Key areas include policies related to prior authorization (PA), step therapy, treatment frequency, specific tests needed to establish medical necessity, and approved diagnosis codes per medication. Medicare Part B policies for each Medicare Administrative Contractor can be found at aao.org/lcds.

CORRECT CODING AND BEYOND

RCM begins with coding the injection encounter and promptly submitting to an insurance carrier a claim that meets all coding guidelines. To ensure accuracy, verify that your coding meets payer guidelines by using an internal injection coding checklist for each insurance carrier. This resource can be created from insurance policies. You can also rely on the Coding for Injectable Drugs guidelines found at aao.org/practice-management/coding/injectable-drugs or refer to my article published earlier this year in Retina Today, “Successfully Coding Retina Injectable Drugs,” which can be found here.

An internal review of your inventory log, chart documentation, and coding is key for RCM. The medication entered on the inventory log per patient should match the chart documentation and insurance claim. This correct coding audit will confirm that the claim is accurate and consistent with all documentation. Only after the claim has been verified should it be submitted to the insurance carrier. A high-level review should also be completed monthly to confirm that inventory, documentation, and coding all agree.

Conducting this review process will help you to confirm that each component of the medication claim is correct. Potential errors in the process can include incorrect recording of medication, wastage, units, or diagnosis. The consequences of these errors are outlined in Table 1.

MONITOR AGING REPORTS

Essential to RCM is monitoring your accounts receivable aging reports. For a retina practice, this requires a focused review of the claims related to drug reimbursement. Promptly identifying delays in drug payments allows timely resolutions.

Reviews may reveal insurance delays related to complications of PA or medical record submission. Internal problems may include practice management system glitches that occur when sending claims or clearinghouse scrub edits that are not resolved and delay submission. Creating and monitoring various reports that identify all medication claims filtered by insurance carrier, specific drugs, or date of service will allow a comprehensive analysis of your medication accounts receivable.

INSURANCE DENIALS

When medication claims are denied by an insurance carrier, a quick analysis of the cause is necessary in order to find a solution. The denial may be due to an internal error, a claim submitted with deficiencies, or an external error related to insurance claim processing.

Internal errors may include incorrect units for medication, inaccurate ICD-10 coding (eg, dry AMD instead of wet AMD), an ICD-10 code not supported by medical necessity or drug indication, injection sooner than 28 days, a missing PA, a step therapy protocol that was not followed, or unsubmitted medical records. External errors can include an insurance carrier not following its own policy, an incorrect denial of a claim (requiring an appeal), issues with patient eligibility or coordination of benefits, a computer glitch, or a delayed claim with no response.

Regardless of the reason for the claim denial, timely response to resolve the issue is necessary. Create a system to address denials related to medication claims to facilitate resolution. See Table 2 for an example of a checklist.

FULL REIMBURSEMENT

The revenue cycle is complete when full reimbursement is received for a medication claim. This is achieved when the total allowable for the drug is collected from any or all of the following: primary and secondary insurance carriers, the patient’s deductible or coinsurance, and patient assistance programs (PAPs). Ensuring that all money is collected may require monitoring of these various payment sources.

Full reimbursement occurs only when the correct allowable has been received from all payment sources. A comprehensive analysis of the allowable per medication and insurance carrier should confirm the contracted rate.

Medicare Part B allowables are based on the CMS average sales price (ASP) drug pricing files. Payment limits are calculated at 106% of the ASP. They are updated quarterly and published at CMS.gov, where the medications are listed by HCPCS codes (ie, J-codes), and published data on the payment limit and the dosage per unit are included.

To understand the relationship between dosing, units, and allowables, it may be useful to use an example. In the fourth quarter of 2019, the allowable for 0.1 mg, or 1 unit, of ranibizumab (Lucentis, Genentech) is $352.174. When injecting 0.5 mg, or 5 units, of ranibizumab, the total allowable is $1,760.87.

Medicare Advantage (MA) plans or commercial payers may reimburse based on the CMS ASP drug pricing files or based on a different contracted rate. These may be outlined in the payer contract in a number of ways, including:

  • 100% of current CMS ASP drug pricing files;
  • A higher percentage of CMS ASP drug pricing files;
  • A percentage of the usual and customary billed fee; or
  • A carve-out contract rate per J-Code.

After the contracted allowable per payer has been identified, a comprehensive report of the actual payments posted can be verified. This can be monitored during the payment process as well.

After the primary payment is received, any remaining balance is transferred to a secondary insurance carrier, the patient, or a PAP. Monitoring this RCM step is critical to ensure that full reimbursement is obtained. A delay in the claim being sent to the secondary insurance or the request for payment being sent to the PAP will affect the accounts receivable aging. Careful attention to targeted reports of each step, prompting action as appropriate, will help you to achieve full reimbursement in a timely manner.

CONTINUOUS PROCESS IMPROVEMENT

As you refine your RCM process focusing on medication claims, new challenges will occur, prompting further changes to your workflow. New, detailed reports that may require routine reviews will be created. A specific insurance carrier may change its policies without warning, which in turn will demand internal process changes. When protocol updates occur, communication and training with all stakeholders in the practice is required to maintain an efficient RCM. A commitment to the scrutiny of the accounts receivable will help you to maintain and even improve medication profitability in your practice.