Some health plans, health systems, and oncology groups are experimenting with various payment models with the intention of reducing unexplained variations in care, controlling costs, and improving patient outcomes. The most popular payment approaches are PCMHs or bundled payments.

Structuring a payment model in oncology requires delicately balancing standardization and flexibility. Models should take into consideration specific uncontrollable variables such as disease stage, severity, patient preferences, and introduction of new evidence or innovative treatments. These variables are likely what led to such variation in the payment models being piloted.

Medicare Regulations in Billing:

We have below 2 Medicare regulations for the billing of oncology speciality as this is a biggest compliance issue in Oncology coding and billing

Direct Billing & Incident to Billing-

CCI Instructions 

  • The existence of the NCCI edit indicates that the two codes cannot be reported together unless the two corresponding procedures are performed at two separate patient encounters or two separate anatomic locations as recognized by coding conventions. 
  • However, if the two corresponding procedures are performed on the same patient encounter and in contiguous structures, NCCI-associated modifiers generally should not be utilized


Oncology Drugs Billing:

  • Correct billing for drugs is crucial, drugs represent the largest expense and greatest financial risk to the practice
  • Drugs are reimbursed by ICD-10-CM diagnosis, (Reimbursed if medically necessary)
  • J-codes are used for billing most Part B drugs Each J-code based on particular quantity
  • If the amount administered exceeds the Jcode quantity, bill multiple units.

Documentation Requirements:

  • Documentation of drugs and biologicals in the medical record (Name of the drug, Date&Time& administered, Amount and route of administration, who has administered
  • Documentation must show medical necessity (Diagnoses specific to drugs/services)
  • If after administering a dose/quantity of the drug or biological to a Medicare patient, a physician, hospital or other provider must discard the remainder of a single use vial or other single use package, the program provides payment for the amount of drug or biological administered and the amount discarded, up to the total amount of the drug or biological as indicated on the vial or package label. Multi-use vials are not subject to payment for discarded amounts of drug or biological. Medicare Claims Processing Manual Chapter 17 – Drugs and Biological, 40 – Discarded Drugs and Biological

Wasted Drugs Billing:

  • Wasted Drugs Billing for drug waste is rapidly becoming a compliance and reimbursement issue for providers. Cancer Rx Has A Billion-Dollar Drug Waste Problem 
  • It is not appropriate to bill for the full amount of a drug when it has been divided between 2 or more patients.
  • Bill only for the amount supplied to each beneficiary.
  • The coverage of discarded drugs applies only to single use vials.
  • Multi-use vials are not subject to payment for discarded amounts of drugs.
  • If the hospital or physician office must discard the remainder of a single use vial after administering the dose to the Medicare patient, the program provides payment for the amount discarded as well as the dose administered, up to the amount of the drug as indicated on the package label.

Modifiers 59

  • Modifier 59 Indicates that a procedure or service was distinct or independent from other services performed on the same day
  • Modifier 59 is an important NCCI-associated modifier that is often used incorrectly.·
  • For the NCCI its primary purpose is to indicate that two or more procedures are performed at different anatomic sites or different patient encounters. 
  • The NCCI website includes the Correct Coding Initiative Manual and all bundling edits; this information is updated quarterly.

Modifier 25:

  • An E&M service is routinely bundled with most other services on the same day, including chemotherapy, and not billed unless it can be identified as a “significant, separately identifiable service,”
  • If it is a separate service, then a 25 modifier, identifying it as billable, may be appended to the E&M CPT (Current Procedural Terminology) code. 
  • Important to note is an E&M service provided on the same day as another service does NOT require a different diagnosis.