OIG says CMS improperly paid an estimated $4.6 million for immunosuppressive drugs
The Office of Inspector General (OIG) found CMS improperly awarded an estimated $4.6 million in reimbursement for immunosuppressive drugs billed with modifier -KX (requirements specified in the medical policy have been met). The OIG also said CMS should revise guidance on modifier -KX because current guidance is confusing and contradictory.
These conclusions resulted from an OIG review of 75 Medicare Part B claims using modifier -KX from fiscal year 2014. The review sought to determine whether Medicare should have paid for post-transplant immunosuppressive drugs when Medicare did not have an organ transplant record for the patient. The current Part B policy covers immunosuppressive drugs for patients who receive an organ transplant paid for by Medicare.
If Medicare cannot find a claim for a transplant in the beneficiary’s history but the pharmacy supplying the drug has documentation on file proving the beneficiary had the transplant while eligible for Medicare, the Part B policy instructs pharmacies to append modifier -KX to the claim for the immunosuppressive drugs to indicate the patient is eligible to receive coverage.
But the OIG found 10 of the 75 claims included in the review should not have used modifier -KX because:
- Six claims had documentation showing the beneficiary received an organ transplant before the beneficiary was eligible for Medicare
- Two claims did not have a transplant date to verify the patient was eligible for Medicare at the time of the transplant
- Two claims did not have any supporting documentation
Medicare improperly reimbursed pharmacies a total of $3,973 for these claims. The OIG estimated that, based off the results of that sample, Part B improperly paid approximately $4.6 million in 2014 nationwide.
In addition to the improper payments, the OIG noted that CMS guidance on the issue is confusing and conflicts with guidance provided by Medicare administrative contractors (MAC). In Chapter 17, section 80.3 of the Medicare Claims Processing Manual, CMS instructs pharmacies to append modifier -KX:
If a supplier has not determined (or does not have documentation on file to support a determination) that either the beneficiary did not receive an organ transplant or that the beneficiary was not enrolled in Medicare Part A as of the date of the transplant, then the supplier may not, with respect to furnishing an immunosuppressive drug: 1) bill Medicare, 2) bill or collect any amount from the beneficiary, or 3) issue an Advance Beneficiary Notice (ABN) to the beneficiary.
This language differs from CMS’ intent for pharmacies to append the modifier when there is documentation supporting the beneficiary’s eligibility for Medicare at the time of the transplant, the OIG said. The OIG also found that all four MACs handling these claims instructed pharmacies to submit all immunosuppressive drug claims with the modifier -KX or else those claims would be denied, a direct contradiction to language in the Medicare Claims Processing Manual stating, “for claims received on and after July 1, 2008, contractors shall accept claims for immunosuppressive drugs without a -KX modifier.”
The OIG recommended CMS clarify language in the Medicare Claims Processing Manual to stay consistent with its intent for modifier -KX to be used to signify a beneficiary is eligible for coverage of immunosuppressive drugs. It also recommended CMS instruct MACs to process immunosuppressive drug claims without modifier -KX and educate pharmacies on the correct use of the modifier.