Designer HCPCS Codes are in the Mainstream Spotlight

The Pharmacy Revenue Cycle is starting out with a new fashion design for 2023 as there are 36 new brand-specific HCPCS codes. CMS has been reviewing its approach for assigning HCPCS Level II codes for drugs that have been approved under the Food, Drug and Cosmetic Act 505(b)(2) New Drug Application (NDA) or the Biologics License Application (BLA) after October 2003. These drugs are not rated therapeutically equivalent to the reference drug listed in the FDA’s Orange Book and therefore are considered single-source products according to section 1847A(c)(6) of the Social Security Act. Each single source product should be assigned a unique billing and payment code which now includes the brand name in the description to differentiate the HCPCS. Additionally, CMS removes brand names from the HCPCS description when the code is used for multiple source drugs.

In efforts to decrease the use of “not otherwise specified codes” and align with the definitions embedded within the Social Security Act for single and multisource products, CMS plans to continue their review of products that were approved under separate NDA or BLA pathways after October 2003 and are not considered therapeutically equivalent to a listed reference product in an existing code.

Shout Outs!

1. Pharmacy and revenue integrity teams should ensure their HCPCS codes have been updated to reflect the changes effective 1/1/2023 and be on the lookout for additional brand-specific HCPCS codes in quarterly updates.
2. Pharmacy and IT teams should evaluate their processes to ensure each NDC is matched to the correct HCPCS and that the NDC being administered to the patient is the NDC that is represented on the claim.
3. Don’t forget to check out our updated tools to help you manage your pharmacy revenue cycle!