Immunosuppressive Drugs - Policy Article

NON-MEDICAL NECESSITY COVERAGE AND PAYMENT RULES

For any item to be covered by Medicare, it must 1) be eligible for a defined Medicare benefit category, 2) be reasonable and necessary for the diagnosis or treatment of illness or injury or to improve the functioning of a malformed body member, and 3) meet all other applicable Medicare statutory and regulatory requirements. Information provided in this policy article relates to determinations other than those based on Social Security Act §1862(a)(1)(A) provisions (i.e. “reasonable and necessary”).

Immunosuppressive drugs are covered under the immunosuppressive therapy benefit [Social Security Act §1861(s)(2)(J)]. In order for a beneficiary’s immunosuppressive drugs to be eligible for reimbursement, the reasonable and necessary (R&N) requirements set out in the related Local Coverage Determination must be met. In addition, there are specific statutory payment policy requirements, discussed below, that also must be met (CMS Claims Processing Manual, Internet-Only Manual, CMS Pub. 100-04, Chapter 17, Section 80.3):

Prescription drugs used in immunosuppressive therapy are covered only if all of the following criteria (I-V) are met:

1. Immunosuppressive drugs are prescribed following transplants either:
   
   1. Kidney, heart, liver, bone marrow/stem cell, lung, or heart/lung transplant; or,
   2. Whole organ pancreas transplant performed concurrent with or subsequent to a kidney transplant because of diabetic nephropathy (performed on or after July 1, 1999); or
   3. Intestinal transplant (performed on or after April 1, 2001); or
   4. Pancreatic islet cell transplant or partial pancreatic tissue transplantation performed on or after October 1, 2004 that is conducted as part of a National Institutes of Health (NIH)-sponsored clinical trial; or
   5. Pancreas transplants alone (performed on or after April 26, 2006) that meet the following criteria:
      1. The transplant is performed in a facility that is Medicare-approved for kidney transplantation; and
      2. Beneficiary must have a diagnosis of type I diabetes and:
         1. Must be beta cell autoantibody positive; or
         2. Must demonstrate insulinopenia, (fasting C-peptide level that is less than or equal to 110% of the lower limit of normal of the laboratory's measurement method). A fasting glucose must be obtained when performing a fasting C-peptide determination. Fasting C-peptide levels are considered valid when a concurrently obtained fasting glucose is <225 mg/dL; and
      3. Must have a history of labile (brittle or medically-uncontrollable) insulin-dependent diabetes mellitus resulting in documented recurrent, severe, acutely life-threatening metabolic complications requiring hospitalization(s). Complications may include frequent hypoglycemia where the beneficiary is unaware, recurring severe ketoacidosis, or recurring severe hypoglycemic attacks; and
      4. Must have been under the care of an endocrinologist and have clinical documentation denoting optimal and intensive management was provided for at least 12 months, having received the most medically-recognized advanced insulin formulations and delivery systems; and
      5. Must demonstrate being able to emotionally and mentally understand the significant risks associated with surgery and be able to effectively manage the lifelong need for immunosuppression; and,
      6. Must otherwise be a suitable candidate for transplantation; and
2. The transplant met Medicare coverage criteria in effect at the time (e.g., approved facility for kidney, heart, intestinal, liver, lung, or heart/lung transplant; national and/or local medical necessity criteria; etc.); and
3. The beneficiary was enrolled in Medicare Part A at the time of the transplant; and
4. The beneficiary is enrolled in Medicare Part B at the time that the drugs are dispensed; and
5. Delivery requirements:
   
   • For DOS prior to August 1, 2016 the drugs are furnished on or after the date of discharge from the hospital following a covered organ transplant.
   • For DOS on or after August 1, 2016 through April 2, 2019, mail-order deliveries may be mailed one or two days prior to a beneficiary’s discharge from an inpatient facility to a qualified place of service (such as home or custodial facility). The DOS on the claim must be the date of discharge.
   • For DOS on or after April 3, 2019 mail-order deliveries may be mailed one or two days prior to a beneficiary’s anticipated date of discharge from an inpatient facility to a qualified place of service or alternate address, such as the inpatient hospital that performed the transplant or alternative location where the beneficiary is temporarily staying (such as temporary housing). The DOS on the claim must be the date of discharge.

If criteria I-V are not met, the drug(s) will be denied as noncovered.

If criteria I, II, and III are met, the transplant is considered a "covered transplant" for purposes of this policy whether payment for the transplant was made by Medicare or by another insurer.

For islet cell transplants or partial pancreatic tissue transplants conducted as part of an NIH-sponsored clinical trial, Medicare will pay for the routine costs, as well as transplantation and appropriate related items and services. The term "routine costs" means reasonable and necessary routine beneficiary care costs, including immunosuppressive drugs and other follow-up care. In addition, Medicare will cover transplantation of pancreatic islet cells. Coverage includes the costs of acquisition and delivery of the pancreatic islet cells, as well as clinically necessary inpatient and outpatient medical care and immunosuppressants.

Immunosuppressive drugs used following partial pancreatic tissue transplantation or islet cell transplantation performed outside the context of a clinical trial or performed before October 1, 2004 will continue to be noncovered.

Immunosuppressive drug coverage is limited to 36 months for beneficiaries whose Medicare entitlement is based solely on end-stage renal disease (ESRD) and enrolled in other types of coverage (e.g., group health plan, TRICARE, or a Medicaid state plan that covers immunosuppressive drugs). Coverage continues beyond 36 months for beneficiaries eligible and enrolled in the Medicare Part B immunosuppressive drug benefit (PBID). See the Medicare General Information, Eligibility and Entitlement Manual (CMS Pub. 100-01), Chapter 2, Section 40.9.  

Immunosuppressive drugs are denied as noncovered when used for the treatment of beneficiaries with non-transplant related diagnoses (e.g., rheumatoid arthritis, connective tissue diseases, vasculitis).

Immunosuppressive drugs are denied as noncovered if they are used following a whole organ pancreas transplant that was not simultaneous with or preceded by a kidney transplant for diabetic nephropathy unless the beneficiary meets the criteria for pancreas transplant alone listed above in I(E). Coverage of immunosuppressive drugs already exists and will continue for beneficiaries who have had a pancreas transplant simultaneous with a kidney transplant because in these situations, coverage is based on the kidney transplant.

There is no coverage under the immunosuppressive drug benefit for supplies used in conjunction with the administration of parenteral immunosuppressive drugs.

SUPPLY FEE INFORMATION:

One unit of service of supply fee code Q0511 is covered for the first covered immunosuppressive drug that is dispensed in a 30-day period. If covered drugs are dispensed by more than one pharmacy during a 30-day period, one unit of Q0511 is covered for each pharmacy. One unit of service of supply fee code Q0512 is covered for each subsequent covered immunosuppressive drug that is dispensed in that 30-day period (See exception below when Q0510 is covered in place of Q0511 or Q0512.) If two dosage strengths of the same drug are dispensed on the same day, one unit of service of the appropriate supply fee is payable for each one. If more than one unit of service of code Q0511 is billed per 30 days by a single pharmacy, the excess units of service will be denied as incorrect coding. If the billed units of service of Q0511 or Q0512 exceed the number of drugs on the claim, the excess units will be denied as not separately payable.

One unit of service for code Q0510 is payable in place of Q0511 or Q0512 for one drug on the first claim for immunosuppressive drugs following a transplant. For example, if three drugs are dispensed, the correct coding for the supply fees on the first claim is one unit of service of Q0510 and two units of service of Q0512. If more than one organ is transplanted at the same time (e.g., heart-lung transplant), only one unit of service of Q0510 is payable. Q0510 is payable to only one supplier after each transplant. If the beneficiary has another transplant at a later date, another unit of service of code Q0510 is payable. If more than one unit of service of code Q0510 is billed per beneficiary per transplant, the excess units of service will be denied as incorrect billing/coding.

There is no separate coding or payment for a compounding fee.

If the drug on the claim is denied as noncovered, the supply fee will be denied as noncovered.

The supply fee must be billed on the same claim as the drug. If it is not, it will be denied as incorrect billing.

REQUIREMENTS FOR SPECIFIC DMEPOS ITEMS PURSUANT TO Final Rule 1713 (84 Fed. Reg Vol 217)

Final Rule 1713 (84 Fed. Reg Vol 217) requires a face-to-face encounter and a Written Order Prior to Delivery (WOPD) for specified HCPCS codes. CMS and the DME MACs provide a list of the specified codes, which is periodically updated. The required Face-to-Face Encounter and Written Order Prior to Delivery List is available here.

Claims for the specified items subject to Final Rule 1713 (84 Fed. Reg Vol 217) that do not meet the face-to-face encounter and WOPD requirements specified in the LCD-related Standard Documentation Requirements Article (A55426) will be denied as not reasonable and necessary.

If a supplier delivers an item prior to receipt of a WOPD, it will be denied as not reasonable and necessary. If the WOPD is not obtained prior to delivery, payment will not be made for that item even if a WOPD is subsequently obtained by the supplier. If a similar item is subsequently provided by an unrelated supplier who has obtained a WOPD, it will be eligible for coverage.

POLICY SPECIFIC DOCUMENTATION REQUIREMENTS

In addition to policy specific documentation requirements, there are general documentation requirements that are applicable to all DMEPOS policies. These general requirements are located in the DOCUMENTATION REQUIREMENTS section of the LCD.

Refer to the LCD-related Standard Documentation Requirements article, located at the bottom of this Policy Article under the Related Local Coverage Documents section for additional information regarding GENERAL DOCUMENTATION REQUIREMENTS and the POLICY SPECIFIC DOCUMENTATION REQUIREMENTS discussed below.

CONTINUED MEDICAL NEED

For all DMEPOS items, the initial justification for medical need is established at the time the item(s) is first ordered, therefore, beneficiary medical records demonstrating that the item is reasonable and necessary are created just prior to, or at the time of, the creation of the initial prescription.

Ongoing immunosuppressive medication need is assumed to be established by the performance of the transplant and the successful maintenance of its function. There is no requirement for further documentation of continued need for the life of the transplant.

CONTINUED USE

Continued use describes the ongoing utilization of immunosuppressive medications by a beneficiary.

Ongoing immunosuppressive medication use is assumed to be established by the performance of the transplant and the successful maintenance of its function. Continued use of immunosuppressive medication is demonstrated by meeting the Refill Documentation requirements.

MODIFIERS

JW AND JZ MODIFIERS

Effective for claims with dates of service on or after January 1, 2017, the JW modifier is required when billing for unused and discarded amounts of drugs and biologicals from single-dose containers that are administered by the supplier.

Effective for claims with dates of service on or after July 1, 2023, the JZ modifier is required when billing for drugs and biologicals from single-dose containers that are administered by the supplier but have no unused and discarded amounts. Effective for claim with dates of service on or after January 1, 2024, the JZ modifier is also required when billing for drugs and biologicals from single-dose containers that are dispensed by the supplier but have no unused and discarded amounts that are self-administered by the beneficiary or the beneficiary’s caregiver.

Effective for claims with dates of service on or after January 1, 2025, the JW modifier is also required if a billing supplier is not administering a drug or biological, but there are unused and discarded amounts during the preparation process before supplying the drug or biological to the patient as described in scenario 3 below. The JZ modifier is required for drugs and biologicals that are dispensed by the supplier but have no unused and discarded amounts during the preparation process and are self-administered by the beneficiary or caregiver in the beneficiary's home.

Multi-use vials are not subject to payment for discarded amounts of drugs or biologicals.

The DME MACs expect rare use of the JW modifier on claims due to HCPCS code descriptors and their associated Units of Service (UOS) for DMEPOS in addition to the limited instructions for use.

Below are three (3) scenarios in regard to the JW and JZ modifiers.

Scenario 1
When the HCPCS code UOS is less than the drug quantity contained in the single-use vial or single-dose package, the following applies:

• The quantity administered is billed on one claim line without the JW modifier; and,
• The quantity discarded is billed on a separate claim line with the JW modifier.

In this scenario, the JW modifier must be billed on a separate claim line to provide payment for the amount of discarded drug or biological. For example:

• A single-use vial is labeled to contain 100 mg of a drug.
• The drug's HCPCS code UOS is 1 UOS = 1 mg.
• 95 mg of the 100 mg in the vial are administered to the beneficiary by the supplier.
• 5 mg remaining in the vial are discarded.
• The 95 mg dose is billed on one claim line as 95 UOS.
• The discarded 5 mg is billed as 5 UOS on a separate claim line with the JW modifier.
• Both claim line items would be processed for payment.

Scenario 2
When the HCPCS code UOS is equal to or greater than the total of the actual dose and the amount discarded, use of the JW modifier is not permitted. As of July 1, 2023, the JZ modifier is required in this situation. If the quantity of drug administered is less than a full UOS, the billed UOS is rounded to the appropriate UOS. For example:

• A single-use vial is labeled to contain 100 mg of a drug.
• The drug's HCPCS code UOS is 1 UOS = 100 mg.
• 70 mg of the 100 mg in the vial are administered to the beneficiary by the supplier.
• 30 mg remaining in the vial are discarded.
• The 70 mg dose is billed correctly by rounding up to one UOS (representing the entire 100 mg vial) on a single claim line item with the JZ modifier.
• The single claim line item of 1 UOS would be processed for payment of the combined total 100 mg of administered and discarded drug.
• The discarded 30 mg must not be billed as another 1 UOS on a separate claim line item with the JW modifier. Billing an additional 1 UOS for the discarded drug with the JW modifier is incorrect billing and will result in an overpayment.

Scenario 3
There are cases such as in a pharmacy where the billing supplier does not administer a drug but prepares it prior to supplying the drug to the beneficiary. Beginning January 1, 2025, the JW modifier is required if a billing supplier is not administering a drug, but there are amounts discarded during the preparation process before supplying the drug to the patient. Such a supplier would report the JZ modifier if no amounts were discarded during the preparation process before supplying the drug to the patient. For example:

• A single-use vial is labeled to contain 50 mg of a drug.
• The drug’s HCPCS code UOS is 1 UOS = 1mg.
• A supplier prepares the prescribed dose of 45 mg to supply to the beneficiary.
• The 45 mg dose is billed on one claim line as 45 UOS.
• The discarded 5 mg is billed as 5 UOS on a separate claim line with the JW modifier.
• Both claim lines would be processed for payment.

KX and GY MODIFIERS:

The KX modifier must be added to the claim line(s) for the immunosuppressive drug(s) only if all of the following four requirements are met:

1. The supplier has obtained from the treating practitioner the specific date of the organ transplant, and
2. The supplier is retaining this documentation of the transplant in its files, and
3. The beneficiary was enrolled in Medicare Part A, at the time of the organ transplant (whether or not Medicare paid for the transplant), and
4. The transplant date precedes the date of service on the claim.

If these four requirements are not met, the KX modifier must not be added to the claim.

If any of criteria I – V listed above have not been met, the GY modifier must be added to the claim line(s).

The diagnosis code(s) that justify the need for these items must be included on the claim. See the below list for covered transplant diagnosis codes.

A new order is required if a new drug(s) is added to the beneficiary's immunosuppressive regimen or if there is a change in dose or frequency of administration of an already allowed drug.

If code J7599 is billed, the claim must list the name of the drug, the dosage strength, number dispensed and administration instructions.

CODING GUIDELINES

The following instructions apply to claims billed using J codes. When claims are billed in NCPDP format using NDC numbers, different instructions may apply. Refer to the NCPDP Companion Document available through the CMS website.

Code J7599 should be used for immunosuppressive drugs that do not have a specific HCPCS code.

For all immunosuppressive drugs, the number of units billed must accurately reflect the definition of one unit of service in each code narrative. For example, if fifty 10 mg prednisolone tablets are dispensed, bill J7510, 100 units (1 unit of J7510 = 5 mg). If fifty 2.5 mg prednisolone tablets are dispensed, bill J7510, 25 units.

Suppliers should contact the Pricing, Data Analysis and Coding (PDAC) Contractor for guidance on the correct coding of these items.