Updated: Nov 5, 2019
By: David Hallberg, Vice President, Product Development
A strange chain of events showed me how different departments view information. I was recently working with a client and showing them issues they had in their build of Millennium™ PharmNet application. These are some of the normal things reviewed:
QCF issues – when converting doses based on the units of measure outlined by CMS, you need to use the Quantity Calculation Factor to convert to the correct measurements (e.g. 1 mg per 1 ml = 1 QCF).
The use of obsolete National Drug Codes (NDCs)
A couple of items need to be defined here:
An obsolete NDC means the manufacturer of the drug no longer makes the drug in that form. For example, Hallberg Pharmaceuticals might have stopped making fentanyl in the form of a sublingual tablet. Let’s say the NDC number was 99999-9999-1. However, in November 2017 the company stopped manufacturing fentanyl in that form. Therefore, the FDA says the drug NDC 99999-9999-1 is obsolete. However, the shelf life of the drug is two years.
An expired drug is a drug that has not been used in a certain time period since it was manufactured, and the manufacturer says it will not certify the effectiveness of the drug after that date.
So with the fentanyl example, if it was administered in October 2019, assuming it was clinically necessary and administered properly, it would be appropriate to chart and charge on a patient’s bill. Keep in mind the drug is obsolete, not expired.
Now the fun starts.
The bill is then sent to the insurance company. The insurance company looks at the items on the bill and denies the entire claim since the obsolete fentanyl was on the bill. The insurance company can create a denial for the line item or the entire claim. They can label these denials under several general items, for example, Incorrect NDC or Missing NDC. The NDC was correct and included, however, since the NDC was obsolete, they may just put the denial in this generic bucket. There are others but these are the most common I have seen.
The hospital gets the denial and the billing office or Patient Financial Services (PFS) team sees the denial reason was for the drug. They credit the charge off of the bill and resubmit the bill. The rest of the bill gets paid. The PFS department is happy, they got revenue!
The fun continues because PFS does not have a way to track all the denial reasons and therefore cannot work with the pharmacy department to ask why they are dispensing obsolete medications. Even though it is not expired and was clinically correct to provide to the patient.
This is where I came in.
I was training the Pharmacy Representative and Pharmacy Information Systems team on Softek’s new Formulary Compliance Control. I pointed out that they were dispensing obsolete drugs and this has an impact on billing and the denial rates of PFS. The Pharmacy team was surprised by that statement and declared that if that was true, there would be a lot of denials every day. They asserted I was wrong and that it is perfectly normal and patient safe to dispense and administer obsolete drugs. They also said it would take a lot of work to go back to their distributors and get the drugs currently in inventory and swap them for non-obsolete drugs.
I agreed it is normal and clinically safe to administer obsolete drugs. I said, however, the insurance companies are trying to deny payments of claims for a variety of reasons and administering obsolete drugs is one of those reasons.
The Pharmacy Department requested I prove it.
So I went back one business week in the same client’s claim denials and there were over 100 denials connected to obsolete NDCs and incorrect HCPCS codes and incorrect dosages (QCF) being administered. The majority of these were from obsolete NDCs. They were very surprised. PFS said they just credit the drug(s) off and resubmit. We discovered since PFS did not have tools to evaluate the denials, they determined it was just more efficient for them to credit the drugs and resubmit, rather than go back to pharmacy about the issue.
Now with Softek's new Formulary Compliance Control, the Pharmacy department is evaluating the high-volume drugs that have obsolete NDCs and they are working with their distributors and getting them swapped for non-obsolete NDCs.
With Softek's Claims Denial Control, PFS is now tracking the claims denied for all of the NDC reasons to provide better feedback on claim denials.
It can be difficult to create high-quality information exchange between two departments that historically have little or no contact with each other. There can be dramatic benefits in this day and age of reduced reimbursements, staff reductions and mergers, when we can collaborate and create a way forward that increases the revenue the organization can see with their current volumes and workload.
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Softek's mission is to help hospital systems get the most out of their investment in Cerner® Millennium™. We do this by providing innovative software solutions and consulting services that can achieve more together than either can alone.
At Softek, our team of innovators and software developers brings expertise beyond the ordinary to every client. Our experts are involved with Cerner® Millennium™ hospitals throughout the country consulting clients so they can optimize system performance and revenue integrity.
Softek delivers a full suite of consulting services and software solutions to assess and optimize EMR system performance, including revenue cycle integrity and patient accounting.
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