CMS Pushes Up Avastin Code Reversal, OKs Retroactive Claims
Reprinted from SPECIALTY PHARMACY NEWS, a monthly newsletter designed to help health plans, PBMs, providers and employers manage costs more aggressively and deliver biotechs, infusibles and injectables more effectively.
By Angela Maas, Managing Editor,
(amaas@aispub.com)
In the wake of pushback from retinal specialists as well as a Senate subcommittee, CMS moved up the date to discontinue use of a recently implemented Healthcare Common Procedure Coding System (HCPCS) code. In addition, CMS said it would allow physicians to resubmit claims processed during the month and a half that the code was in place. The decision, says an industry source, is a boon for providers, patients and taxpayers.
Many ophthalmologists use Genentech, Inc.’s cancer drug Avastin (bevacizumab) off label to treat wet age-related macular degeneration (AMD). Another Genentech therapy, Lucentis (ranibizumab), is approved for the condition but costs about 20 times more than Avastin. CMS assigned Avastin for ophthalmologic use its own HCPCS code, Q2024, starting Oct. 1. However, after receiving feedback from ophthalmologists, as well as others, CMS said it would replace the new code and allow ophthalmologists to revert to their previous billing practices, but not until Jan. 1.
The American Academy of Ophthalmology (AAO), as well as Sen. Herb Kohl (D-WI), chairman of the Senate Special Committee on Aging, lobbied against waiting until Jan. 1 to do away with the new code. The AAO also pushed to have the correction applied retroactively to Oct. 1. CMS ultimately decided to do both. On Nov. 16, CMS said that it would “no longer recognize” Q2024 and that the code would be removed from the pricing file for average sales price with its January release. CMS also told contractors to reprocess any claims based on Q2024 when a physician requested it.
“We are extremely pleased, needless to say,” says Bill Rich, M.D., medical director for health policy at the AAO. “We’re thankful that CMS recognized that an error was made.…We understand how hard it is to turn around a payment system that affects 43 million Americans.”
“That response is overdue, but favorable,” says Lawrence J. Singerman, M.D., executive secretary of the Macula Society. “Obviously this never should have been changed.”
Specialists Lost Money When Dosing Avastin
The new HCPCS code meant that retinal specialists were actually losing money to administer Avastin. Compounding pharmacies purchase a vial of Avastin but then divide the drug into smaller, sterilized doses, which ophthalmologists purchase for $20 to $50. In contrast, Lucentis — a next-generation version of Avastin — costs more than $2,000. After CMS reimburses for Lucentis, providers make about $120. Before CMS instituted the new HCPCS code, it reimbursed Avastin for ophthalmologic use at approximately $50 per dose. But the new code reduced the reimbursement to about $7.20, a money-losing proposition that could incentivize physicians to shift patients from Avastin to Lucentis. If specialists transitioned their patients, CMS could potentially pay out an additional $1.5 billion in a year, says Rich. When Rich spoke with SPN in early November, he said he had heard of a small number of ophthalmologists who had switched their patients from Avastin to Lucentis. And Singerman told SPN when the change was reversed that he knew of many who had transitioned patients during the time Q2024 was in place.
While the code was in place, the AAO advised its members to continue doing what they had been doing prior to Oct. 1 regarding Avastin. Under the reimbursement in place between Oct. 1 and Nov. 15, Rich estimated that ophthalmologists were losing about $7 for every Avastin claim they submitted. But faced with costs of about $5 to process a claim, many ophthalmologists withheld their Avastin claims rather than submitting them, he tells SPN.
Providers and taxpayers weren’t the only stakeholders impacted. Patients who were switched from Avastin to Lucentis were faced with a tremendous increase in their copayments — from $8 to $10 with Avastin to $400 for Lucentis.
“This is a win for taxpayers, patients and doctors,” says Rich about the new CMS action.
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