New NDC Codes: Huge Impact on Hospitals

 2023 IPPS Final Rule includes rules for the use of National Drug Codes.

The Centers for Medicare & Medicaid Services (CMS) and the American Medical Association (AMA) are working hard to become more agile and keep up with changes needed during the COVID-19 public health emergency (PHE).

Not only were new ICD-10-CM/PCS, CPT, and HCPCS codes published outside of the normal regulatory cycle, new COVID-19 specific guidance was published for free by the AMA. CMS published change request 11925, instituting a temporary payment policy for some Inpatient Prospective Payment Systems (IPPS) claims. Certain COVID-19 admissions occurring on or after Sept. 1, 2020, saw an increased DRG weight of 20 percent with a documented positive COVID-19 test within 14 days of the inpatient admission.  If no positive COVID-19 test is present, a billing note or remark indicating that a positive test was not available should be appended to the claim, suspending the 20 percent increase in the DRG weight by the pricer. 

Consider that inpatient coders aren’t typically trained to think about data elements that aren’t managed by the cooperating parties, part of the regulatory cycle, or a state specific data element reported for public health initiatives. Each admission’s documentation is reviewed and coded regardless of what happened in previous admissions.

Reviewing data present in prior patient encounters, whether it be previous inpatient, outpatient, or physician office services is not normally in scope for coding the current inpatient admission when that data is not in the included in the current admission’s medical record. That is, until change request 11925 was released. 

The requirement to ensure a positive COVID-19 test was present during an admission where COVID-19 was listed as a diagnosis, forced institutions to operationalize the collection of this data element across patient encounters. Some institutions created a new team of analysts who are triggered to begin the search for a positive test, when a diagnosis of COVID-19 was present in the electronic medical record. This ensured that if there wasn’t a positive test noted, one was added.

In November 2020, CMS issued an Interim Final Rule (IFC)  with Comment Period establishing the New COVID-19 Treatments Add-on Payment (NCTAP) to mitigate any potential financial disincentives for hospitals to provide new treatments to COVID-19 patients during the PHE. In the beginning, the NCTAP would be triggered by certain criteria, including particular section X ICD-10-PCS codes. As it has evolved, a fairly unused data classification came into play triggering the calculation of this add on payment, the national drug code or NDC.

In change request 112631, CMS introduced two NDC codes which, when used in combination with other criteria, would trigger the NCTAP payment. This change flew in under the radar for most and while the NDC code is not a new data element passed into the IPPS pricer, the NDC code classification system is not something inpatient coders are normally trained to work with. In the FY 2023 IPPS proposed rule, it was proposed that by FY 2024, all NCTAP would be triggered using the NDC code classification as CMS considers the NDC, “..a viable alternative to Section X codes for the administration of the new technology add-on payment for therapeutic agents.” A transition period during 2023 was also proposed where the NCTAP would be identified by either the NDC or a section X code.  

How will entities pivot so quickly to allow their staff to train on the proper reporting of a totally new classification system in less than two years?

How will facilities manage to include this in their operating practices?

Adding just one new data point, requires that the groupers and pricers are re-written. The list goes on an on. Think of how many systems hospitals use during the revenue cycle. Each system will have to be changed to accommodate the NDC code and be tested.

The National Drug Code Classification System is enormous. This was a worrisome proposal that thankfully was rejected in the 2023 IPPS final rule. Multiple commenters provided the feedback that the implementation and use of the NDC codes would be administratively burdensome for institutions, especially smaller and rural hospitals. CMS responded, rejecting the proposal, “CMS is not finalizing its proposal to use only National Drug Codes (NDCs) to identify claims involving the administration of therapeutic agents approved for NTAP, rather than ICD-10-PCS codes, after consideration of the concerns raised in public comments. CMS will continue to engage with stakeholders regarding this issue and reassess for future rulemaking.”  

Programming note: Listen to Meg DeVoe report this story live today during Talk Ten Tuesdays with Chuck Buck and Erica Remer, MD.