Pharma Management

Medicare payment for Parsabiv and Sensipar moves to Part B

Editor’s note: In January, both Parsabiv and Sensipar moved from the Medicare Part D reimbursement to Part B for patients with end-stage renal disease. We asked Sarah Tolson and Rick Collins at Sceptre Management Solutions to explain how the change impacts dialysis providers and physicians.

NN&I: What drove CMS to move these two drugs from Part D to Part B, which dictates dialysis reimbursement?

Sarah Tolson: In the original final rule that created the [end-stage renal disease prospective payment system] ESRD PPS (the “bundle”), CMS excluded oral-only ESRD drugs from the bundled payment amount. These drugs, which included Sensipar, continued to be paid under Part D. In 2016, CMS added the ESRD PPS Drug Designation Process to the Medicare Benefit Policy Manual. The drug designation process explains that an “oral-only renal dialysis service drug or biological is no longer considered oral-only when a non-oral version ... is approved by the FDA.” In 2017, Parsabiv, an injectable calcimimetic, received FDA approval and was designated by CMS as a renal dialysis service.

Sarah Tolson
Rick Collins

The approval of Parsabiv meant that Sensipar was no longer an oral-only ESRD drug. Therefore, Sensipar was required to be transitioned to the bundle under the transitional drug add-on payment adjustment (TDAPA). TDAPA requires that both be billed under Part B and are to be paid in addition to the bundle.

NN&I: These two drugs will remain outside the ESRD payment bundle for 2 years – 2018 and 2019. Can dialysis providers expect any change in pricing for these drugs under Part B?

Rick Collins: Some fluctuation in reimbursement can be expected over the next 2 years. CMS updates the average sales price for medications each quarter. Once CMS has obtained sufficient data regarding Sensipar dosing and pricing over the next 2 years, they will add Sensipar and Parsabiv to the bundle.

NN&I: What about the nuances in coverage? Can providers expect automatic coverage by Medicare Advantage and Medicaid?

Collins: Commercial policies, including Medicare Advantage plans, have many coverage and reimbursement variables that affect whether a provider will be reimbursed for Sensipar and Parsabiv. Preauthorization, provider network participation, payer-specific reimbursement policies and methodologies, and the provider’s contract with the payer can affect whether the drugs are reimbursed and how much the payments are. Providers also should be on the alert for payers who state that these drugs are “covered,” but pay for them at a rate of $0.

A big challenge with commercial payers is that many providers have signed contracts stating that the rate paid per treatment is “all-inclusive.” Thus, a provider can place either calcimimetic on a claim, but there will be no increase in the amount of reimbursement. Providers who have such contracts need to contact the payers to include an additional payment for both Parsabiv and Sensipar.

Another challenge with commercial payers is that some have not yet updated their drug coverage policies to reimburse for Sensipar on anything other than a pharmacy claim. Others have not yet added Parsabiv to their fee schedules for their Medicare Advantage or traditional commercial policies.

Medicaid policies and payment methodologies vary significantly by state. Historically, state Medicaid agencies have been slow to update their coverage and reimbursement policies. As is the case with commercial payers, some states continue to pay Sensipar under their pharmacy benefits. Other states are not yet reimbursing for Parsabiv.

Coverage for these drugs can also vary significantly for patients covered by policies issued by the Veterans Administration (VA) and Indian Health Services (IHS). VA coverage varies by region and IHS policies are determined by each tribe, although efforts are currently underway to have both payers follow Medicare coverage and reimbursement policies. If they have not already done so, providers should review payment remittances from the VA and IHS for verification that Sensipar and Parsabiv are covered. If they find that either drug is not being covered or reimbursed, providers should contact the payers’ medical directors in order to have these drugs covered as soon as possible, preferably retroactive to Jan. 1, 2018. Providers are getting hit by Medicaid on both primary and secondary claims. If they have not done so already, renal providers should contact their state Medicaid policymakers to have them add Sensipar and Parsabiv as covered drugs as of Jan. 1, 2018.

NN&I: Do you expect commercial payers to follow Medicare’s position in terms of coverage?

Collins: For at least this year, we expect commercial payers to vary in their coverage of Parsabiv and Sensipar. For outpatient dialysis claims, there are typically three reimbursement methodologies from commercial plans: reimbursing a percentage of billed charges; reimbursement from a fee schedule that identifies specific rates for each billing code; and an all-inclusive, per treatment payment rate. Providers who receive reimbursement as a percentage of billed charges or from a fee schedule still need to check their payment remittances to make sure the payer has included Parsabiv and Sensipar as covered medications on their claims and that the reimbursement amount is reasonable. If a payer is not yet reimbursing for Sensipar on an ESRD provider’s claim, providers may want to ask if the drug is still being reimbursed on a pharmacy claim until the payer updates their policies. Providers contracted with commercial payers to receive an all-inclusive per treatment payment need to modify their contracts to include both drugs. If the payers state they cannot add the drugs to your contract because they have not yet updated their coverage policies to include Sensipar and Parsabiv, providers may want to ask if the payer is still providing pharmacy benefits for Sensipar.

NN&I: Have you heard reports of dialysis providers not getting paid by Medicare for the two drugs?

Tolson: A number of facilities have reported a concern regarding Medicare’s policy for reimbursing Sensipar. The Medicare Benefit Policy Manual (Pub. 100-02, CH 11, 20.3) instructs providers that when billing oral equivalents of an ESRD-related drug, dialysis programs can only bill for the portion of the drug they expect the patient to have taken during the billing period. This means that if a dialysis program ordered and paid for a 90-day supply of Sensipar for a patient, under the best circumstance the provider can only bill Medicare for 1 month’s supply at a time. In the event a patient transferred or passed away before the dialysis program was able to bill for all of the Sensipar ordered for the patient, there is currently no avenue for the dialysis facility to recoup their loss.

NN&I: Medicare is adding the TDAPA payment amount to the amount reimbursed for the dialysis treatments. What impact if any, has this had on patient liability?

Tolson: Although Medicare Part B allows an amount that will cover the cost of Parsabiv and Sensipar, Medicare only pays 80% of that amount. The remaining 20% is assigned to the patient. Patients with ESRD have struggled for decades with paying for co-insurance amounts that are frequently $300 to more than $1,000 per month. The addition of these two drugs has added minimal additional liability for some and significant liability for others depending on the quantity administered. This increase in patient coinsurance amounts puts an even greater emphasis on the importance of dialysis patients having some form of supplemental insurance coverage that will cover their liability.

However, having secondary coverage is still no guarantee for reimbursement due to commercial and government policies that have not yet included coverage for Sensipar and Parsabiv or whose payment methodology results in little or nothing paid for these drugs.

For example, Medicaid payment methodologies in some states require them to calculate every claim as if they had been the primary payer. If Medicaid is the secondary payer, they subtract the amount Medicare paid from the amount they calculate they would have paid as the primary payor. If Medicaid offers no coverage for Parsabiv or Sensipar, the amount they pay as the secondary payer could drop to little or nothing. As a “payer of last resort,” dialysis providers cannot bill the patient for the unpaid co-insurance, which normally results in a loss to the provider.

Another challenge regarding secondary payments from Medicaid and other payers has to do with the Medicare remittance advice. Although Medicare reimburses separately for Parsabiv and Sensipar, the amounts paid are added to the treatment lines instead of to the lines on which the drugs are billed. Thus, even Medicaid payers that cover Parsabiv and Sensipar may incorrectly calculate how much they would have paid as the primary payer because the reimbursement for those drugs are shown as zero on the Medicare remittance advice.

Disclosures: Tolson and Collins report no relevant financial disclosures.

Editor’s note: In January, both Parsabiv and Sensipar moved from the Medicare Part D reimbursement to Part B for patients with end-stage renal disease. We asked Sarah Tolson and Rick Collins at Sceptre Management Solutions to explain how the change impacts dialysis providers and physicians.

NN&I: What drove CMS to move these two drugs from Part D to Part B, which dictates dialysis reimbursement?

Sarah Tolson: In the original final rule that created the [end-stage renal disease prospective payment system] ESRD PPS (the “bundle”), CMS excluded oral-only ESRD drugs from the bundled payment amount. These drugs, which included Sensipar, continued to be paid under Part D. In 2016, CMS added the ESRD PPS Drug Designation Process to the Medicare Benefit Policy Manual. The drug designation process explains that an “oral-only renal dialysis service drug or biological is no longer considered oral-only when a non-oral version ... is approved by the FDA.” In 2017, Parsabiv, an injectable calcimimetic, received FDA approval and was designated by CMS as a renal dialysis service.

Sarah Tolson
Rick Collins

The approval of Parsabiv meant that Sensipar was no longer an oral-only ESRD drug. Therefore, Sensipar was required to be transitioned to the bundle under the transitional drug add-on payment adjustment (TDAPA). TDAPA requires that both be billed under Part B and are to be paid in addition to the bundle.

NN&I: These two drugs will remain outside the ESRD payment bundle for 2 years – 2018 and 2019. Can dialysis providers expect any change in pricing for these drugs under Part B?

Rick Collins: Some fluctuation in reimbursement can be expected over the next 2 years. CMS updates the average sales price for medications each quarter. Once CMS has obtained sufficient data regarding Sensipar dosing and pricing over the next 2 years, they will add Sensipar and Parsabiv to the bundle.

NN&I: What about the nuances in coverage? Can providers expect automatic coverage by Medicare Advantage and Medicaid?

Collins: Commercial policies, including Medicare Advantage plans, have many coverage and reimbursement variables that affect whether a provider will be reimbursed for Sensipar and Parsabiv. Preauthorization, provider network participation, payer-specific reimbursement policies and methodologies, and the provider’s contract with the payer can affect whether the drugs are reimbursed and how much the payments are. Providers also should be on the alert for payers who state that these drugs are “covered,” but pay for them at a rate of $0.

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A big challenge with commercial payers is that many providers have signed contracts stating that the rate paid per treatment is “all-inclusive.” Thus, a provider can place either calcimimetic on a claim, but there will be no increase in the amount of reimbursement. Providers who have such contracts need to contact the payers to include an additional payment for both Parsabiv and Sensipar.

Another challenge with commercial payers is that some have not yet updated their drug coverage policies to reimburse for Sensipar on anything other than a pharmacy claim. Others have not yet added Parsabiv to their fee schedules for their Medicare Advantage or traditional commercial policies.

Medicaid policies and payment methodologies vary significantly by state. Historically, state Medicaid agencies have been slow to update their coverage and reimbursement policies. As is the case with commercial payers, some states continue to pay Sensipar under their pharmacy benefits. Other states are not yet reimbursing for Parsabiv.

Coverage for these drugs can also vary significantly for patients covered by policies issued by the Veterans Administration (VA) and Indian Health Services (IHS). VA coverage varies by region and IHS policies are determined by each tribe, although efforts are currently underway to have both payers follow Medicare coverage and reimbursement policies. If they have not already done so, providers should review payment remittances from the VA and IHS for verification that Sensipar and Parsabiv are covered. If they find that either drug is not being covered or reimbursed, providers should contact the payers’ medical directors in order to have these drugs covered as soon as possible, preferably retroactive to Jan. 1, 2018. Providers are getting hit by Medicaid on both primary and secondary claims. If they have not done so already, renal providers should contact their state Medicaid policymakers to have them add Sensipar and Parsabiv as covered drugs as of Jan. 1, 2018.

NN&I: Do you expect commercial payers to follow Medicare’s position in terms of coverage?

Collins: For at least this year, we expect commercial payers to vary in their coverage of Parsabiv and Sensipar. For outpatient dialysis claims, there are typically three reimbursement methodologies from commercial plans: reimbursing a percentage of billed charges; reimbursement from a fee schedule that identifies specific rates for each billing code; and an all-inclusive, per treatment payment rate. Providers who receive reimbursement as a percentage of billed charges or from a fee schedule still need to check their payment remittances to make sure the payer has included Parsabiv and Sensipar as covered medications on their claims and that the reimbursement amount is reasonable. If a payer is not yet reimbursing for Sensipar on an ESRD provider’s claim, providers may want to ask if the drug is still being reimbursed on a pharmacy claim until the payer updates their policies. Providers contracted with commercial payers to receive an all-inclusive per treatment payment need to modify their contracts to include both drugs. If the payers state they cannot add the drugs to your contract because they have not yet updated their coverage policies to include Sensipar and Parsabiv, providers may want to ask if the payer is still providing pharmacy benefits for Sensipar.

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NN&I: Have you heard reports of dialysis providers not getting paid by Medicare for the two drugs?

Tolson: A number of facilities have reported a concern regarding Medicare’s policy for reimbursing Sensipar. The Medicare Benefit Policy Manual (Pub. 100-02, CH 11, 20.3) instructs providers that when billing oral equivalents of an ESRD-related drug, dialysis programs can only bill for the portion of the drug they expect the patient to have taken during the billing period. This means that if a dialysis program ordered and paid for a 90-day supply of Sensipar for a patient, under the best circumstance the provider can only bill Medicare for 1 month’s supply at a time. In the event a patient transferred or passed away before the dialysis program was able to bill for all of the Sensipar ordered for the patient, there is currently no avenue for the dialysis facility to recoup their loss.

NN&I: Medicare is adding the TDAPA payment amount to the amount reimbursed for the dialysis treatments. What impact if any, has this had on patient liability?

Tolson: Although Medicare Part B allows an amount that will cover the cost of Parsabiv and Sensipar, Medicare only pays 80% of that amount. The remaining 20% is assigned to the patient. Patients with ESRD have struggled for decades with paying for co-insurance amounts that are frequently $300 to more than $1,000 per month. The addition of these two drugs has added minimal additional liability for some and significant liability for others depending on the quantity administered. This increase in patient coinsurance amounts puts an even greater emphasis on the importance of dialysis patients having some form of supplemental insurance coverage that will cover their liability.

However, having secondary coverage is still no guarantee for reimbursement due to commercial and government policies that have not yet included coverage for Sensipar and Parsabiv or whose payment methodology results in little or nothing paid for these drugs.

For example, Medicaid payment methodologies in some states require them to calculate every claim as if they had been the primary payer. If Medicaid is the secondary payer, they subtract the amount Medicare paid from the amount they calculate they would have paid as the primary payor. If Medicaid offers no coverage for Parsabiv or Sensipar, the amount they pay as the secondary payer could drop to little or nothing. As a “payer of last resort,” dialysis providers cannot bill the patient for the unpaid co-insurance, which normally results in a loss to the provider.

Another challenge regarding secondary payments from Medicaid and other payers has to do with the Medicare remittance advice. Although Medicare reimburses separately for Parsabiv and Sensipar, the amounts paid are added to the treatment lines instead of to the lines on which the drugs are billed. Thus, even Medicaid payers that cover Parsabiv and Sensipar may incorrectly calculate how much they would have paid as the primary payer because the reimbursement for those drugs are shown as zero on the Medicare remittance advice.

Disclosures: Tolson and Collins report no relevant financial disclosures.