A list of frequently asked questions pertaining to pharmacy reimbursement is found below.

What is a revenue cycle?
A: View revenue cycle diagram (Powerpoint presentation)

What is the definition of a revenue code?
A: A revenue code is a code that indentifies a specific accomodation, anxillary service, or billing calculation. Revenue center codes (also called UB92 codes or rev codes) serve two primary functions: they help track internal departmental costs for hospitals and they provide CMS and other payers with necessary billing data.

What is ASP?
A: ASP is the acronym for "average selling price." ASP is the new method that CMS will be using to reimburse both hospitals for outpatient medications and physicians' offices. The intent is to reduce the "spread" between acquisition cost and average wholesale price (AWP). Traditionally AWP was used as a basis for medication reimbursement yet CMS studies demonstrated that this resulted in profit for providers at CMS's expense. As a result of ASP, reimbursement for medications in both practice settings will be reduced. ASP is derived by taking manufacturer's sales of all U.S. purchaess for each National Drug Code for one calendar quarter, divided by the total number of units sold in that quarter. ASP excludes nominal pricing and Medicaid "best price" and includes volume and prompt pay discounts, free goods, chargebacks, and rebates.

What is a specialty pharmacy?
A: Specialty pharmacies are a growing segment of health care in response to the increasing expenses associated with medical injectables such as biologics. Many prescription benefit managment companies have created or acquired specialty pharmacies. These pharmacies are attractive to health plans because the provide management of expensive injectables including but not limited ot contracting with pharmaceutical industry, prior authorization, patient education and follow up, case management, home delivery, and reimbursement services including claims adjudication.

How do you get reimbursed for unlabeled uses?
A: Find an appeal process for the payer. An unlabeled use of a drug is a use that is not included as an indication on the drug label as approved by the FDA. FDA approved drugs used for indications other than what is indicated on the official label may be covered under Medicare if the carrier determines the use to be medically accepted, taking into consideration the major drug compendia, authoritative medical literature, and accepted standards of medical practice. In the case of drugs used in an anti-cancer chemotherapeutic regimen, unlabeled uses are covered for a medically accepted indication as defined in §2049.4.

Written inquiries regarding Medicare expanding coverage for unlabeled uses of an approved drug must include:

• Letter addressed to Medicare from a Medicare provider/physician within the Medicare Fiscal Intermediary area indicating course of treatment
• A copy of the information from at least one of the drug compendiums
  • American Hospital Formulary Services, DI (AHFS)
  • American Medical Association Drug Evaluations; and/or
  • United States Pharmacopeia Convention, Inc., DI

OR

• A copy of current scientific or peer reviewed literature
• At least two Phase III clinical trials ( when available); or,
• At least three Phase II clinical trials

Note: Trial studies submitted should definitely demonstrate safe and effectiveness supporting the request.