Mid Del Therapeutic Center, Inc. - Page 10

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            directly with Medicare or the insurance company.4  Thus, most                              
            bills were submitted to Medicare or private insurers.                                      
                  In accordance with Medicare regulations and private                                  
            insurers’ requirements, the submitted bills reflected the                                  
            specific drugs, and amounts thereof, administered to each                                  
            patient.  Each compensable service and drug provided in the                                
            course of chemotherapy treatment was assigned a specific code for                          
            billing purposes.  The billing code for a particular chemotherapy                          
            drug was referred to as its "J-code", which corresponded to a                              
            specific drug and a specific amount of that drug.  A                                       
            miscellaneous J-code was used for drugs that had not been                                  
            assigned a specific J-code.                                                                
                  Petitioners' charges for chemotherapy drugs were based on                            
            the drugs' average wholesale price (AWP), which was determined by                          
            reference to the "Red Book", a publication that PC received                                
            annually.  To determine the amount charged for each drug, the                              
            billing department multiplied the AWP by a certain multiple,                               
            which varied depending upon whether the bill was being submitted                           
            to a private insurer or Medicare.  On the other hand, although                             
            AWP was the starting point used to calculate the charges made for                          

                  4Only "Medicare providers" may bill Medicare directly.                               
            Prior to 1995, petitioners were not "Medicare providers" and,                              
            therefore, billed the patients directly.  The patients then                                
            submitted their bills to Medicare for reimbursement.  In 1995,                             
            petitioners were “Medicare providers” and billed Medicare                                  
            directly for medical services provided to covered patients.                                

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Last modified: May 25, 2011