Friday, January 31, 2003

WASHINGTON - Various DMERC publications have informed providers that they must drop HCPCS and use National Drug Codes (NDC) as part of HIPAA beginning April 1, and rumors are flying.

Industry sources say providers are wondering whether there’s more in store for them than just a change in coding.

“A lot of people are telling me that the real reason for the switch to NDC is that there’s going to be a change in payment philosophy,” said Mickey Letson, president of Letco Medical in Decatur, Ala., and chairman of the Respiratory Homecare Providers Association. “We’ve always found that when Medicare makes a change to coding, they make a change to reimbursement.”

Letson said he’s heard the switch to NDC could mean CMS is moving toward reimbursing at average wholesale price (AWP). For instance, right now Medicare reimburses for albuterol with one code and one fee, even though there are different brands. But with NDC, it would reimburse for albuterol with numerous codes and numerous fees, possibly fees similar to the AWPs.

“All the AWPs are close, but even pennies are enough to make providers change from one brand to another based on higher reimbursement,” Letson said.

The result could be drug shortages, as manufacturers with higher AWPs struggle to fill an influx of orders, Letson said.

John Durkee, national sales manager for ABC Plus in Orlando, Fla., said he’s heard the switch to NDC could mean CMS is moving toward a national prescription drug program. He said Medicare is the only insurer to use HCPCS (most other payers use NDC), and if you’re going to implement a national program, you need standardized coding.

“You’re not going to change the thousands of codes everyone else already uses,” he said. “You’re going to change the 40 or so codes Medicare uses.”

Letson and Durkee said regardless of any change in reimbursement, providers are bracing themselves for a cut this year. HME