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Understanding the Insurance Reimbursement Process in Specialty Pharmacy

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Katelyn: Hello, and welcome to the BioSupply Trends Quarterly Podcast. My name is Katelyn Cunningham, and I’m the communications specialist for FFF Enterprises. This podcast is brought to you by BioSupply Trends Quarterly magazine as an added extension to give readers an opportunity to hear from healthcare experts on the trending topics important to them. Thanks for joining us.

In our first episode, we’ll be discussing the insurance reimbursement process in specialty pharmacy and how to make it easier for patients. Our special guest expert today is Leslie Vaughan. Leslie is the chief operating officer of Nufactor, a specialty infusion company. She has been a licensed pharmacist since 1990 and has spent most of her career in the home infusion specialty pharmacy space with a focus on immune globulin, or IG, products. Her expertise is in both clinical care and understanding reimbursement and the associated challenges faced by patients treated with IG. She is licensed in multiple states and is currently certified as an IG certified pharmacist and certified specialty pharmacist.

Katelyn: Welcome Leslie. Thank you for joining me and sharing your expertise today. Getting reimbursement can be a headache for patients, and even the best providers can find it challenging. I’m glad you’re here to help us better understand the process in today’s episode.

Our first question is: What are some general suggestions for reimbursement? Are there any challenges patients might anticipate?

Leslie: There are always challenges in reimbursement, and they vary based on the type of insurance. There are different challenges with commercial Insurance than there are with government-based insurance like Medicare or Medicaid.

The best advice I can give to patients is to manage their own records. I always advise patients who we take care of to request copies of their medical records, especially some of the early diagnostic records such as nerve conduction studies, immunoglobulin levels or any sort of diagnostic testing. Request those from their physician or from the labs, and keep a copy. The reason I suggest that is things change over the course of time, and patients being treated with IG are generally treated for long periods of time due to chronic conditions. So if there’s an insurance change or a move that requires a change to another provider, it’s really good to have the baseline medical records, specifically for authorization. If patients have an insurance change, their new insurance company is going to want to go back to see how they were diagnosed. And a lot of times, if that happened 10 years ago or 15 years ago, they may not have those records, or if they’ve changed physicians a couple of times, those records aren’t available. Or, even if patients have the same position, they may have archived those records. So, I really think it’s important for patients to advocate for themselves and keep copies of all of those diagnostic records throughout the course of their life and their treatments.

The other suggestion I have is to make sure patients clearly understand their options and their benefits when they’re selecting an insurance plan at open enrollment. And I say that for a couple of reasons. For example, if patients are on IG therapy, which is a really high-cost therapy, it might not make sense for them to select a high-deductible plan. So, during open enrollment, when patients look at all their options and they have a traditional plan with a lower deductible and they’re on an expensive therapy, it probably makes more sense to choose a plan with the lower deductible. Otherwise, they’re going to have a pretty big out-of-pocket that patients are going to have to pay on their own.

The other thing I suggest to patients when they’re trying to select an insurance provider is to ask that provider if they utilize either co-pay maximizers or co-pay accumulators in their plan. These are relatively new to the industry over the last four years or so, and these programs work to ensure co-pays are collected. Which is fine; co-pays should be collected. But, what they do in some cases is limit the ability of a manufactured co-pay assistance program to offset patients’ co-pays and deductibles. So, for example, if there’s a co-pay accumulator, and patients have a $5,000 co-pay and the manufacturer assistance program has $5,000, the insurance will allow that co-pay assistance program to pay $5,000, but they won’t count it toward the patients’ deductible. So, once that manufactured co-pay assistance program is maxed out, patients are still held responsible for their deductible. So, it’s really important to completely understand the benefit as patients have an option to select different providers or different benefits during open enrollment.

Katelyn: Wow, OK, thank you, that’s really helpful advice through all the stages of enrollment and beyond, and a reminder to try to be an advocate for yourself and
your records is important.

Speaking of enrollment, when changing Insurance, what’s the best way to communicate with the prescribing physician’s nurses and staff to be sure the process goes smoothly?

Leslie: For me what’s really important is just making sure that the physician knows a patient is changing insurance. At open enrollment, if patients are changing jobs or whatever the case may be that results in an insurance change, it’s really necessary to communicate as proactively as possible with their physician, with their home infusion therapy company or their specialty pharmacy to make sure that they have advanced notice of which insurance company they will be changing to. And again, there are many reasons for that. Current home infusion pharmacy or specialty pharmacy may not be in network with a patient’s new insurance company, so it would need to identify who is in network and work with the patient and the in-network pharmacy to get care transferred appropriately so there are no delays or missed doses. The same goes with the physician. Physicians may be in-network with one insurance company but not with another, and so patients may end up having to change physicians depending on network status. So that proactive communication gives patients the time to identify if they’re going to have to change providers and to identify a new provider, hopefully well in advance of a dose being due so they don’t have any delays or offsets.

The other suggestion I would make is when changing from one Insurance to another. Each insurance company generally has a formulary. They have particular brands of IG that they allow on their formulary. So, it’s a good idea to check to see if the brand of medication the patient is being treated with is on their formulary. In some cases, they might be able to request a formulary exception if they had some adverse effects previously to the brand that’s on the insurance company’s formulary. But, generally, the insurance companies are going to ask patients to change their brand to see how they do on a different brand. So, I do think it’s important to double check on that formulary piece.

Katelyn: Those are really important notions to consider during a time that can be often confusing or frustrating for patients. So, it sounds like, with most things, communication is key throughout the process.

My next question is regarding your earlier points that speak so well to both general and specialty insurance issues. If we look closer at specialty reimbursement, how is payment going to be made for both infusions and the IG medication once a patient transitions to Medicare?

Leslie: This seems like a super easy question but it has a really complicated answer, and it depends on a lot of different factors, so I’ll try to break it down as best as I can. Some of the factors that we have to think about is where the infusion is occurring. Is it occurring at home, at a hospital outpatient infusion center or at a physician office infusion center? We also have to consider the treating diagnosis. There are a pretty limited number of diagnoses that are covered by Medicare Part B in the home setting. And so, for those not covered by Part B, there may be coverage by Part D or
by a Medicare Advantage benefit.

The other thing that we have to think about is how the IG is being administered. The coverage varies slightly for intravenous IG (IVIG) versus subcutaneous IG (SCIG) under the Medicare Part B benefit at home.

And then, the last factor we have to talk about is when nursing services are covered. Again, coverage varies between SCIG and IVIG and is somewhat limited.

I’m going to focus right now mostly on the home setting, and then we’ll talk a little bit about the differences in how things are covered in a physician’s office.

Looking at Medicare Part B specifically, there’s coverage for 24 diagnosis codes at home for IG administered intravenously. And those diagnosis codes are primary immune deficiency diagnoses codes that are covered at home. There are probably about 300 or 400 primary immune deficiency diagnosis codes, yet, again, only 24 are selected for coverage at home.

The coverage for SCIG is based on the use of a pump. And the only way that SCIG gets covered under Medicare Part B is if patients are using some sort of infusion pump to administer the IG. SCIG does cover all of those same 24 primary immune deficiency diagnosis codes and then adds one additional primary immune deficiency diagnosis code, so it covers 25 ICD-10 codes at home. And then in addition to those 25 primary immune deficiency diagnoses, Part B will also cover chronic inflammatory demyelinating polyneuropathy, a neuromuscular disorder. But they’ll only cover that for Hizentra and, again, only when it’s at home and administered by a pump.

The Part B coverage differs quite broadly when it’s administered at a hospital infusion center or a physician office infusion center, and there’s really a much broader list of covered diagnoses. They’re covering what’s called Incident to Physician Services. So the physician needs to be on site in order for the patient to receive the services and for the physician to bill for the services.

So going back to the home setting, let’s shift over to diagnoses that are not covered by Part B. We mentioned the 24 or 25 primary immune deficiency diagnoses that are covered by Part B. But, there are a lot of additional diagnoses that are treated with IG. So that shifts the coverage over to the Part D or the drug benefit. Generally, the Part D benefit requires prior authorization and it’s really limited to some specific rules around how coverage can be made. The IG either has to have an FDA indication for the disease state being treated. For example, there’s an FDA indication for chronic inflammatory demyelinating polyneuropathy or CIDP, there’s an FDA indication for multifocal motor neuropathy or MMN, there’s also an FDA indication for idiopathic thrombocytopenic purpura or ITP, and there’s an FDA indication for dermatomyositis. So there are some different diagnoses for which there is an indication, but not a whole lot.

The second way that Medicare Part D can cover drugs is if there’s positive reference in one of two Medicare-approved compendia. If the diagnosis a patient has is not supported either by an FDA indication or by compendial reference, the IG can’t be approved by Part D. An example of this would be a diagnosis of small fiber neuropathy. There’s no FDA indication for small fiber neuropathy nor is there a positive compendium reference, and so in that case, that diagnosis would not be covered at home under Medicare Part D.

Now, we’ll shift over to talking about nursing. Again, nursing coverage varies based on where the patient is being treated, which benefit they’re being treated under and which route of administration is being used. We’ll talk first about being treated in the hospital infusion center or the physician office infusion center. There is coverage for nursing in those particular locations. So, if a patient is being infused in those locations, the infusion center does have codes and they’re allowed to bill for nursing.

Now, we’ll discuss how things are covered based on the route of administration in the home setting. For IVIG, there is limited coverage for nursing and, again, it’s only related to those 24 covered Part B diagnosis codes that are primary immune deficiency diagnosis codes. Coverage for the last several years has been part of a Medicare demonstration project, which was looking to see whether allowing payment for nursing services increased access. The benefit was reviewed and will now become a permanent benefit in 2024. Any home infusion company with a DME Part B provider number can bill for the visits at this time and will also be able to bill for those when it’s a permanent benefit.

Just so you understand, there is a single monthly payment for an infusion; it’s not billed by hours or in 15-minute increments. It’s just a single amount that a home infusion provider is allowed to bill and get paid for. For example, if a patient is being infused every two weeks, the infusion provider is unable to bill for the nursing for the second visit; it’s only for a single visit in the course of a month.

For any other diagnosis code, if we’re not able to bill Part B for the drug itself, there again is no coverage when the drug is for nursing when the drug is being administered intravenously. The coverage is only for those 24 primary immune deficiency diagnosis codes under Part B.

Shifting to SCIG, there is coverage for nursing services when the nurse is in the home administering the drug, which is covered part by Part B. But, again, it’s limited to those 25 primary immune deficiency codes and/or CIDP if the drug is Hizentra. This is again a single payment. It’s slightly higher for the initial visit and then lower for any subsequent visit, so as long as the nurse is in the home and actually performing the administration, there is the ability to bill for nursing for those 26 specific diagnosis codes. If the patient is receiving SCIG for any other diagnosis code, that would be billed under Medicare Part D, and there would not be coverage for nursing. So one difference between IVIG and SCIG coverage, is that for IVIG, the company just has to be a DME Part B provider. It’s a little bit different for SCIG. Providers have two different Medicare provider numbers. They need to be both a DME Part B provider and they also have to be a home infusion therapy provider and have that provider number in order to bill for these specific visits.

There are a couple of other things I want to mention about Medicare. Currently, payment under Part B is based on something called ASP or average sales price, and that is calculated by manufacturers, reported to Medicare and published on a quarterly basis. The payment is ASP plus 6 percent, and there’s a 2 percent reduction in the payment, which is known as sequestration. So providers may not be able to accept Medicare Part B beneficiaries. In this case, a patient may need to be transferred to another pharmacy that might be able to buy the drug at a lower cost, or the patient might have to be transferred back to an infusion center.

In addition to sequestration, there’s another piece of legislation of which I think Medicare beneficiaries should be aware. If this legislation is allowed to go into play, it would force additional payment discounts. This is called PAYG or the pay-as-you-go budget rule. That rule would apply an additional 2 percent discount to Medicare payments. So, we already have the 2 percent from the sequestration discount and then it would apply another 2 percent on top of that. So the good news is implementation of PAYG was shifted to 2024 as part of the 2022 year-end federal government spending package.

The other thing to talk about with Medicare and specifically with Part D is the out-of-pocket expenses. The way the Part D benefit is currently structured, the out-of-pocket patient responsibility is pretty sizeable, and it has four phases. There’s the initial deductible phase in which the patient is responsible for 100 percent of the charges. Then it moves into a cost-sharing phase in which the patient is responsible for 25 percent of the charges. Then it moves into the donut hole phase in which the patient is responsible for 100 percent of the charges. And then lastly, it moves into the catastrophic phase in which the patient is responsible for up to 5 percent. So, this is the standard Medicare Part D benefit. There are some plans that offer a premium or an upgraded benefit for which the plan will actually help the patient through some of these phases. But just talking about the standard benefit and those four phases, it amounts to a pretty sizable amount that the patient is responsible for.

There were several items that were added to the Inflation Reduction Act, which was passed in 2022, that address this sizeable out-of-pocket responsibility. Assuming the act stays intact, the catastrophic phase will be removed in 2024. That’s the last phase in which the patient throughout the course of the year is responsible for 5 percent will be removed. And then in 2025, the maximum out-of-pocket a Medicare benefit Part D recipient would have to pay is $2,000 annually. So, that’s a significant reduction from what the cost is today.

The third thing that was added into the Inflation Reduction Act, which helps the Medicare Part D beneficiary, is for the $2,000 annual payment. There will also be a method to smooth that payment over the course of the year rather than having to pay it in one lump sum. So if patients get their dose of IVIG in January, their out-of-pocket could potentially be $2,000 right then and there. But there’ll be a method to smooth that out so they can pay that over the course of 12 months. So that is good news for things that are coming under the Part D benefit but are not in place today.

One thing I will add with the Part D benefit, depending on a diagnosis, is there are some foundation programs that provide funds to help patients with some of these out-of-pocket expenses. The foundation funds open and close fairly quickly usually in the very first part of the year. But most home infusion or specialty pharmacies do work with the foundations to try to help patients offset those co-pays as often as possible.

Katelyn: Well I’m glad that we have experts like you to help explain this because it does sound like a very complex and ever-evolving process or processes depending on which part you need to access. So thank you for that; that was really helpful.

We have one last question for you, Leslie, sort of going off the last question. How might patients best prepare to transition to Medicare?

Leslie: I think that’s a great question to wrap up, and it really encompasses a lot of the things that we’ve talked about already. I mentioned early on about having access to your records. With Medicare, patients may end up having to change to a different company or they might have to change to a different site of care. So having access to those records and being able to provide them to a new provider is very helpful for that provider to determine the best way to get them covered and make sure that they can get authorization and/or support claims to Medicare Part B.

I think it’s really important for anybody transitioning to Medicare, especially IG patients, to understand their diagnosis and how it may or may not be covered by Medicare. And like I said, to be prepared to potentially change their site of care from home to an infusion center or maybe change from their current specialty pharmacy to another specialty pharmacy if their current pharmacy isn’t a Part B provider. There are a lot of different things that might cause patients to have to make some changes with who’s currently providing their service when they transition to Medicare.

The last thing is I always encourage people who are transitioning to Medicare to spend some time on Medicare’s website at It has a lot of really great resources that can explain all the different aspects of Medicare. It explains what Medicare Part A, Part B and Part D are and what a Medicare Advantage plan is. It talks about supplemental plans and overall coverage. It’s a great resource for anybody who’s getting ready to transition to Medicare. Another resource should be patients’ current specialty pharmacy or their current infusion center. Ask some questions about how they would see the patient’s diagnosis being covered as they transition. Again, being proactive and making sure that they’re advising whoever is currently providing their care transition to Medicare will give them plenty of time to work with them to find the best way for them to continue their care when Medicare is their insurance company.

Katelyn: Thank you, Leslie, it has been a pleasure to have you as our guest today. I really want to thank you again for your extensive expertise on this topic and for joining us to discuss the issues patients face in the realm of specialty reimbursement. I am sure our listeners will find your tips incredibly useful.

Leslie: Well, thank you. I appreciate the time.

Katelyn: Listeners, thank you again for joining us today. Additional information regarding this podcast can be found on our website at

If you have a question that we haven’t addressed, please feel free to contact us at [email protected].

Look for the next BioSupply Trends Quarterly Podcast announcement on our website for the opportunity to submit your questions.

The BioSupply Trends Quarterly Podcast is a copywritten production of BioSupply Trends Quarterly magazine, a publication of FFF Enterprises, Inc., the nation’s most trusted distributor of plasma products, vaccines and critical care biopharmaceuticals.

This episode of the BioSupply Trends Quarterly Podcast is brought to you by Nufactor, a specialty infusion company. Nufactor staff includes pharmacists, clinical nurse coordinators, clinical nurse educators, client service specialists and insurance and reimbursement specialists to help navigate the complexities of receiving specialty infusion care in the home. Our insurance specialists work directly with patients’ insurance companies to obtain prior authorization for their medications and services. Pharmacists and pharmacy technicians provide education and ensure patients’ medications and supplies are delivered on time every time. Clinical nurse coordinators arrange for nursing care in patients’ homes when necessary. Our reimbursement specialists do the work of billing patients’ insurance companies on their behalf so they don’t have to. Medications and supplies are sent from one of our three pharmacies based in California, Texas and North Carolina.