A prescription for specialty pharmaceuticals: Transparency and collaboration for improving drug and diagnosis coding on medical claims

Since the completion of the Human Genome Project, the explosive growth in molecular diagnostics and specialty pharmaceuticals is outpacing the growth seen in any prior era, raising serious concerns about clinical quality and cost. According to an industry survey conducted earlier this year by the Pharmaceutical Research and Manufacturers of America (PhRMA), more than 900 medicines and vaccines have been identified in various stages of development. To keep pace, the strategies that were adequate for the “empty pipeline” scenarios of a few years ago-to code each agent, communicate clinical evidence and clinical guideline developments, and update reimbursement methodologies-must now be enhanced.

Despite competing priorities (eg, Affordable Care Act mandates, ICD-10, and others), health information technology vendors are moving aggressively to meet these needs. Web-based decision-support software is now available to help clinicians select molecular diagnostic tests and therapeutic agents, retrieve current clinical evidence summaries, and validate health plan coverage for the selected services. In addition, more sophisticated claims auditing software can now correlate billed services with “covered” clinical diagnoses at the “back end” of the process, and improved data management tools promise better reporting and more sophisticated analytics for health plans, providers, and laboratories. By building collaborative strategies and using technology to assess protocols and communicate best practices, payers, clinicians, and pharmacies are now positioned to keep pace with new drugs and make the best decisions for patients-based both on clinical outcomes and cost.

When a new drug reaches the market, clinicians need detailed and reliable information about each new agent. Increasingly, patients need this information as well. Each treatment and treatment protocol should include a clear and concise description, a unique tracking/billing code, on-label and off-label usage information, and the estimated clinical value (eg, “clinical utility”). But this information can be difficult to gather and complicated to explain. Furthermore, it often changes as additional clinical data are documented.

To highlight these points and explore their implications for many of the new drugs in the pipeline, let’s look at onabotulinumtoxinA (Botox) as an example. Despite the notoriety associated with use of this agent by cosmetic surgeons, there are several well-documented, medically necessary indications for the use of onabotulinumtoxinA. The number and diversity of the FDA-approved indications for this agent are actually quite interesting. 

Multiple indications, increasing complexity

The Botox story starts in the late 1960s, when an ophthalmologist began investigating the use of this agent for strabismus (“crossed eyes”) and blepharospasm ("uncontrolled blinking")-conditions that can be quite disabling to patients. Initial trials in humans occurred in the early 1980s, and FDA approval for these indications occurred in 1989. Since then, the FDA-approved indications have been steadily expanded to include cervical dystonia (“neck spasm”), axillary hyperhydrosis (“excessive sweating”), migraine headache (but not other forms of headache), and, in January 2013, overactive bladder therapy (for those failing more conservative medical management).

The significance of this diversity of approved indications is that the number of individual injections and total drug dosage varies substantially from 1 condition to the next. Potential confusion about the proper way to bill this code begins with the description of the code itself: “HCPCS J-Code, J0585, Injection, onabotulinumtoxinA, 1 unit,” provides no information about whether the available single-use vial contains 100 units or 200 units of vacuum dried powder for reconstitution. One dosage regimen for migraine headaches calls for injection of 155 units, and 31 distinct injection sites involving 7 different muscles. Since this amount would require the use of either 2 smaller vials or one larger vial, the billable quantity should be 200 units-the prepared amount, not the administered amount-even though 200 units are not consumed by procedure. For billing personnel not familiar with these code descriptions, a unit of “1” for the one vial utilized may be incorrectly entered on the claim, resulting in a significant underbilling. However, code descriptions for other drugs specify the amount in milligrams rather than units, so that the number of vials is the same as the reportable number of units.

Clearly, it can be quite challenging to compare the billed service to the expected number of units of a specific code-even with improved auditing logic software. But by keying on both the J-Code and the diagnosis, it is now possible to determine whether the number of billed units of a particular J-Code falls within the expected range of values for the diagnostic family being treated. Additional parameters that evaluate gender, age criteria and maximum expected dosage (based on population statistics for Body-Mass Index [BMI], body surface areas [meter²], or, simply, absolute maximum dosages) can also be assessed for accuracy.

Market Implications

There are a number of important process implications raised by this example. One of the most obvious is that since J-Code descriptions do not correlate well with billable units of drugs, better software and more interactive user experiences should be utilized to address inconsistencies as data entry occurs. However, the need for more clarity or completeness in the code descriptions themselves is another critically important process implication-especially as new codes are defined and issued. In addition, the same criteria that were used in choosing a particular agent need to be revalidated during the claims processing and claims auditing steps. 

Moreover, there is now more pressure than ever to reduce time to market. This pressure impacts not only the processes needed to ensure well-designed and well-executed clinical trials for initial FDA approvals, but also the processes by which additional indications are approved for emerging agents as experience with those agents is associated with added benefits. A better, industry-based process for affirming “off-label” uses of drugs until FDA approval validates those uses as “on-label” would benefit everyone. Some models for this already exist. In oncology, for example, Centers for Medicare & Medicaid Services (CMS) and the National Collaborative Care Network (NCCN) endorse “off-label” uses of drugs for clinical care. Working with input from health plans to extend comparable protocols to other specialties could streamline the introduction of new agents without an undue compromise in patient safety.

While the challenge and complexity of coding specialty pharmaceuticals is being eased by online access to concise and accurate coding and decision-support information, a better process for getting coding updates from CMS/Healthcare Common Procedure Coding System is still needed. Industry support is an important component of realizing this vital process improvement. Automated access to clinical coverage guidelines and determinations would remove the uncertainty from appropriateness of care. And once clinical care guidelines are fully endorsed by the clinical community, reporting and analytics should lead to much less variability-and improved clinical outcomes.

Collaboration Leads to Better Outcomes

The improvements in health information technology are dramatically improving the opportunities for collaboration between payers, providers, and pharmacies. With the ability to share specialty pharmacy data, opportunities to align incentives and rewards will become possible. Everyone in the medical community has something to gain.

· Payers have a significant health reform opportunity to use online HIT proactively and provide more transparent coverage and payment policies. Access to clinical evidence summaries gathered through national participation of all key stakeholders has been slow to arrive, but it is definitely starting to happen. The incentives that bring physicians, pharmacists and even patients into the electronic age are starting to pay dividends.

· Physicians become familiar with drugs they use every day; but unusual clinical presentations,, evolving clinical guidelines, and the explosion of new diagnostics and special pharmaceutical agents make collaborative decision-support tools essential to the clinical care process. Reporting and analytics with peer comparisons that provide timely feedback to clinicians will become the new benchmark in performance improvement.

· Pharmacists have an opportunity to play an increasingly critical role in managing and packaging this emerging data for clinicians and patients. The specialty-specific jargon in healthcare that can confuse nearly everyone will require communication that is clearer than ever and that uses every communication channel available.

There has never been a better opportunity to look for collaborative opportunities among payers, clinicians and pharmacists. Ultimately, what can be measured can nearly always be managed. Necessary change can be driven by regular, well-designed reports and analytics. Physician profiles that define utilization habits might be extremely useful amidst ongoing reforms, and the ability to access the data needed to create those profiles should become easier as the IT infrastructure continues to improve. Industry buy-in through the participation of national specialty societies may be a tremendous opportunity to explore.

If we are to afford the future, then we need to work now to manage both clinical outcomes and cost through all the avenues of value-based reimbursement. And improvements in transparency and collaboration around specialty pharmaceuticals must be a part of our efforts. If the mantra in real estate is “location, location, location,” then the mantra in healthcare reform should be “data, data, data.” Data will remain the key to cost savings, process improvements, and improved outcomes for the foreseeable future.

Dr Moeller is medical director of McKesson Health Solutions. His primary accountability involves the clinical integrity of KnowledgeBase development for McKesson claims auditing and advanced diagnostics management solutions. In addition, Dr Moeller has major responsibilities in customer support, special projects, and new product development. He is the co-lead on the McKesson Care Episodes clinical content development team, responsible specifically for the episode logic functional architecture. He is a board-certified general internist and was in private medical practice for 13 years before his transition into managed care and medical informatics.

Disclosure information: The author reports no financial disclosures as related to products discussed in this article.