ESRD Consolidated Billing Affects Hospitals’ Billing of Certain Labs and Drugs

on Thursday, 16 September 2010. All News Items

CMS recently released Transmittal 2033 (CR7064) concerning the January 1, 2011 implementation of the End Stage Renal Disease (ESRD) bundled prospective payment system (PPS).  ESRD PPS was mandated by the Medicare Improvements for Patients and Providers Act (MIPPA).  The ESRD PPS will provide a single payment to ESRD facilities that will cover all the resources used in providing an outpatient dialysis treatment, including supplies, equipment, drugs, biologicals, laboratory tests, training, and support services.  Hospitals need to be aware of the consolidated billing (CB) rules for laboratory tests and drugs under the ESRD PPS. 

Effective January 1, 2011, all ESRD-related lab tests must be billed by the renal dialysis facility whether provided directly or under arrangements with an independent lab.  When an outpatient hospital furnishes lab tests subject to ESRD CB for reasons other than for the treatment of ESRD, the hospital must use new modifier ‘AY’ to receive separate payment.  Modifier ‘AY’ is defined as “item or service furnished to an ESRD patient that is not for the treatment of ESRD.”  See the list below of the laboratory tests that are subject to ESRD CB.   Medicare systems will reject ESRD lab services’ line items on bill types  13x, 14x, and 85x that do not contain modifier AY or HCPCS G0257 (hospital outpatient emergency/unscheduled dialysis for ESRD patient) when overlapping a dialysis claim.

Similarly, all ESRD-related drugs and biologicals (see list below) must be billed by the renal dialysis facility.  When an ESRD-related drug or biological is provided to an ESRD patient by a hospital for reasons other than ESRD treatment, the hospital may submit a claim for separate payment using modifier AY.  Contractors shall reject at the line item level incoming outpatient TOBs 13x, 14x, and 85x for drugs subject to ESRD CB that do not contain modifier AY or HCPCS G0257 when overlapping the from and through date of a covered dialysis claim.

Also with the implementation of the ESRD PPS, ESRD-related EPO and Aranesp are not separately payable on Part B claims for other providers with the exception of a hospital billing for an emergency or unscheduled dialysis session.

Laboratory Tests Subject to ESRD Consolidated Billing*:
Albumin, aluminum, vitamin D 25-hydroxy and  25-dihydroxy, calcium, ionized calcium, CO2, carnitine, chloride, creatinine, urine creatinine, creatinine clearance, vitamin B-12, erythropoietin, ferritin, folic acid, iron, iron binding, magnesium, parathormone, alkaline phosphatase, phosphorus, potassium, prealbumin, protein, sodium, transferrin, urea nitrogen  (blood and urine), urea-n clearance, hematocrit, hemoglobin, CBC and CBC with automated diff (with and without platelet count), RBC count, reticulocyte count, reticyte/hgb concentrate, leukocyte count, hepatitis B core antibody (total and IgM), hepatitis B surface antibody, hepatitis B surface antigen, blood culture, bacterial cultures (other, aerobic other, anaerobic other, anaerobic except blood, aerobic and anaerobic definitive ID, and screening cultures)
* See Attachment 6 to Transmittal 2033 for a complete description of ESRD CB lab tests including CPT/HCPCS codes.

Drugs Subject to ESRD Consolidated Billing*:
Heparin, lepiridun, reteplase, alteplase recombinant, urokinase, darbepoetin, iron sucrose injection, Na ferric gluconate complex, vitamin B12, EPO, midazolam hydrochloride, diazepam, calcium gluconate, calcitonin salmon, clacitriol, deferoxamine mesylate, doxercalciferol, ibandronate sodium, pamidronate disodium, paricalcitol, levocarnitine, daptomycin, vancomycin HCl
*May not apply to all forms of the drug.  See Attachment 7 to Transmittal 2033 for complete drug descriptions and HCPCS codes.

For complete information, see Transmittal 2033  or MLN Matters Article MM7064.

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