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CMS Clarifies Use of Modifier KX for Immunosuppressive Drugs

October 31, 2017:

In September, the Centers for Medicare and Medicaid Services (CMS) released a clarification of how to bill for immunosuppressive drugs using HCPCS Level II modifier KX Requirements specified in the medical policy have been met. The clarification was in response to an Office of Inspector General report that found a significant number of cases in which pharmacies did not have documentation to support the use of modifier KX.

This modifier signifies that the pharmacy attests to its possession of documentation proving that a beneficiary’s organ transplant necessitating immunosuppressive drugs occurred when the patient was eligible for Medicare coverage. When Medicare cannot locate a fee-for-service transplant claim in a beneficiary’s claims history, a pharmacy can submit a claim for immunosuppressive drugs with modifier KX to show that it can prove the patient is eligible for Medicare coverage.

In 2014, nearly all the claims for immunosuppressive drugs submitted under Part B listed modifier KX. When OIG examined a random sampling of claims to see if these claims were paid correctly, it found that 10 out of 75 claims were not supported by documentation proving eligibility.

The problem, OIG suggested, was that billing guidance in the Medicare Claims Processing Manual was not written clearly, prompting additional guidance from claims processing contractors that conflicted with CMS’s intention for the modifier. This additional guidance incorrectly indicated that all claims for immunosuppressive drugs without modifier KX would be denied. Rather than risk denied claims, pharmacies started adding modifier KX to every claim for immunosuppressive drugs they submitted rather than just for the ones necessitating the modifier.


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