• Savvy Coder

    How to Manage Expensive Drugs

    Written By: Joy Woodke, COE, OCS, and Sue Vicchrilli, COT, OCS

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    When some anti-VEGF drugs cost nearly $2,000 per injection, practices must carefully manage costs.

    One of the greatest challenges in managing a retina practice is maintain­ing the profitability of using anti-VEGF medications. Increased usage of these drugs, along with their high cost and low profit margins, demands continuous process improvement. When 1 mistake can cost the practice thousands of dollars, losses can swiftly spiral out of control if you’re not monitoring your procedures carefully.

    The first step in managing this challenge is to know your process and document the steps that are involved. You also should review this process fre­quently to see how it can be improved.

    Do You Have a Green Light to Inject Today?

    Obtain preauthorization when needed. Unlike Medicare Part B, many insur­ance companies require prior autho­rization for intravitreal injections and have policies that do not allow retro­active requests. It is essential that you have a clear protocol for each payer so you can promptly confirm that a prior authorization has been obtained.

    Verify insurance eligibility. You should verify insurance eligibility at each visit. Patients can lose coverage for various reasons, change insurance car­riers, or add new secondary coverage. Confirming insurance coverage prior to injections, and obtaining authorization as necessary, will eliminate unnecessary denials.

    Samples. Using anti-VEGF samples for the initial treatment of a high-cost drug can give you the time that you need to confirm insurance coverage and authorization.

    Patient Assistance

    Pharmaceutical companies may have pa­tient assistance programs for the drugs they provide, and these can reduce the patient’s out-of-pocket costs.

    It will help both the practice and patients if you have a coordinator who is educated on all the programs available for helping patients. After a patient’s application is submitted, the coordinator can follow the process to the final approval or denial, based on the patient’s insurance coverage or financial need.

    If the application was approved, you need to communicate the program benefits to the patient and document the coverage in your practice manage­ment system, which will ensure that the doctors and staff are aware of the additional coverage provided for the treatment plan.

    Inventory Control

    For high priced drugs, implementing a comprehensive inventory system is essential to maintaining profitability. Some practices use a tracking spread­sheet, while others may adopt a com­puterized inventory tracking system. Regardless of the method, the system should—at a minimum—provide:

    • Current inventory totals and value
    • Tracking of inventory orders, receipt of drug, and payment of invoices
    • Prompts when inventory is low
    • Patient assignment of dosages, including: date of service, doctor, and lot number
    • Outstanding invoices and false profit
    • Auditing capabilities
    • Billing reconciliation

    Eliminate Coding Errors and Denials

    To facilitate prompt payment and reduce denials by insurers, you should create internal procedures to ensure that intravitreal injections are coded correctly.

    Insurers’ requirements may vary. It is crucial to refine the protocol based on the specific policies of each of your insurance carriers. The requirements for medical necessity, prior authoriza­tion, number of days between treat­ments, and diagnostic testing frequency may vary among insurance carriers. Doing your research to obtain the unique payer policies and committing to ongoing education are essential components of correct coding.

    For Medicare Part B requirements, read “Coding for Injectable Drugs.”

    Avoid common mistakes. Below are some costly errors that have been discovered during audits:

    • Billing for Lucentis but injecting Avastin
    • Injecting at intervals shorter than 28 days due to human error in counting days between injections
    • Obtaining an informed consent for the right eye and injecting the left eye

    Note: When the drug is not a covered benefit for a specific condition, the injection is not a covered benefit, either.

    Monitor Your Reports

    Once your process is documented and implemented, monitoring the system can provide vital feedback about actionable items or areas needing improve­ment. Some reports that can be benefi­cial include those listed below.

    Inventory reports:

    • Missing or incorrect dosage assign­ments
    • Billing accuracy audits
    • Average medication usage per doctor
    • Outstanding invoices and accounts payable totals
    • Expiration dates 

    Accounts receivable reports per drug:

    • Timely charge entry
    • Aging of accounts receivable by insurance carrier and provider
    • Rejected claims and denials
    • Accurate payment allowables per contract

    In Conclusion

    Although managing anti-VEGF medi­cation use in a retina practice can seem overwhelming, creating a comprehen­sive process will help you maintain and improve profitability. To position your practice for success, you should develop a system that will promptly identify and correct errors and can facilitate a consistent workflow. It also is critical to encourage a culture of constant process improvement.

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    Ms. Vicchrilli is Academy director of Coding and Reimbursement. Financial disclosure: AAO: E.

    Ms. Woodke is practice administrator at Oregon Eye Consultants in Eugene, Ore. She chairs the AAOE Electronic Health Record committee. Financial disclosure: None.

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    FURTHER READING. See this month’s feature, “Expensive Drugs.”