Case 2:21-cv-10076-DPH-KGA ECF No. 42-2, PageID.597 Filed 04/12/24 Page 1 of 4
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`EXHIBIT 2
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`Case 2:21-cv-10076-DPH-KGA ECF No. 42-2, PageID.598 Filed 04/12/24 Page 2 of 4
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`Blue Cross 600 E. Lafayette Blvd.
`Blue Shield Detroit, Michigan 48226-2998
`Of Michigan
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`October 6, 2020
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`Bond Pharmacy Inc. d/b/a Advanced Infusion Solutions (AIS)
`c/o John Finley
`18451 Dallas Parkway, Suite 150
`Dallas, TX 75287
`jfinley@aiscaregroup.com
`VIA FIRST CLASS MAIL & EMAIL
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`RE: AIS’s Improper Use of the S9238 Per Diem Billing Code
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`Dear Mr. Finley:
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`I am an attorney for Blue Cross Blue Shield of Michigan (“BCBSM”). I write regarding improper billing
`practices by Bond Pharmacy Inc. d/b/a Advanced Infusion Solutions (AIS), specifically, AIS’s use of the
`S9238 per diem billing code from April 1, 2018 to present.
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`The Agreement
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`AIS and BCBSM are parties to a Home Infusion Therapy (HIT) Facility Participation Agreement dated
`April 1, 2018. The HIT Facility Participation Agreement incorporates, among other things, BCBSM’s
`Provider Manual and Medical Policy (collectively, “Agreement”).
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`Under the Agreement, for HIT Covered Services, BCBSM pays for three components: (i) Pharmaceuticals,
`(ii) nursing visits, and (iii) durable medical equipment, medical supplies, and solutions. The third
`component is a catch-all and includes all services not included in the pharmaceutical or nursing
`components for each date of service. It is the only category that BCBSM pays at a bundled per diem rate.
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`Per the Medical Policy, the billing code at issue here – “S9238 – HIT, pain mgt., implanted pump, per diem”
`– is used for “[h]ome infusion therapy, implanted pump pain management infusion; administrative
`services, professional pharmacy services, care coordination, and all necessary supplies and equipment
`(drugs and nursing visits coded separately), per diem.”
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`Under the HIT chapter of the Provider Manual, “[t]o qualify for payment of an S code, in addition to
`dispensing medication you must provide ongoing services, such as: Medical supervision, Nursing, Patient
`or caregiver training, [and] Patient support.”
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`The HIT chapter of the Provider Manual also outlines billing requirements. Among other things, it provides
`that before billing HIT services, you must obtain a signed and dated CMN (certificate of medical necessity)
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`DocuSign Envelope ID: 7A46DA3E-A3B9-4D74-A13C-CEC3AAF39CB0
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`Case 2:21-cv-10076-DPH-KGA ECF No. 42-2, PageID.599 Filed 04/12/24 Page 3 of 4
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`“for each therapy category provided.”1 In addition, you must update the physician about the patient’s
`condition at least once every 30 days, or more often if necessary, and documentation of the update must
`be in the clinical record.
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`The HIT chapter of the Provider Manual also states that when billing for HIT services, you must “[e]nter
`the total number of days the patient infused for the therapy” because “S codes are quantity-processed or
`quantity-paid,” meaning “[w]e pay them as many times as you indicate they were performed, subject to
`limitations imposed by the code explanation.”
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`Together, these provisions limit the use of the S9238 per diem billing code to the administration and
`management of pain medication,
`including necessary supplies and equipment other than
`pharmaceuticals. Dispensing medication and the provision of ongoing services are essential components,
`as is a proper CMN.
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`AIS’s Improper Use of the S9238 Per Diem Billing Code
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`In 2019, BCBSM’s Corporate and Financial Investigations (CFI) unit began receiving complaints about AIS’s
`use of the S9238 per diem billing code and initiated an investigation. BCBSM learned that AIS, in
`Mississippi, supplies the pharmaceutical component to the overseeing provider in Michigan, who
`administers the drug and manages the patient’s care. Nevertheless, AIS was charging BCBSM for the S9238
`per diem billing code in addition to a J- billing code for the pharmaceutical component.
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`On December 20, 2019, BCBSM placed AIS on Pre-payment Utilization Review (PPUR). For every claim
`submitted, before BCBSM would issue payment, AIS was required to provide documentation to
`substantiate the claim. To date, AIS has failed to substantiate any of the claims submitted with the S9238
`per diem billing code. The documentation AIS provided includes only pharmaceutical prescriptions,
`directions for the use of medications, billing notes, prescription labels, compounding instructions, delivery
`tickets, and papers from the National Home Infusion Association. It does not include a CMN or other
`evidence to support the dispensing of medication and provision of ongoing services such as patient care
`coordination, pharmacy consulting, or supplies beyond the medication mailed to the overseeing provider.
`Administrative costs of pharmaceutical components, like refrigeration and pharmacy testing, are not
`payable under the S9238 per diem billing code. Accordingly, the claims have all been denied, and AIS
`remains on PPUR.
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`1 The CMN must include all the following information:
`Prescribing physician’s name, address, and telephone number
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`Patient’s full name, address, gender, and birth date
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` Detailed diagnosis related to the infusion therapy using standard billing guidelines
` Description of the patient’s condition, detailed enough to substantiate the necessity of services or items
` Dosage, infusion time, fluids, frequency, and duration (start and stop dates [MM/DD/YY] of medication)
`Type or route of infusion administration, required equipment, and supplies
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`Estimated date of duration of need and frequency of use
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` Nursing orders
`Physician’s signature and date.
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`DocuSign Envelope ID: 7A46DA3E-A3B9-4D74-A13C-CEC3AAF39CB0
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`Case 2:21-cv-10076-DPH-KGA ECF No. 42-2, PageID.600 Filed 04/12/24 Page 4 of 4
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`On February 13, 2020, BCBSM requested medical records for an audit of paid claims. AIS mailed hard
`copies to BCBSM’s office in Detroit, but they were inaccessible due to government-mandated COVID-19
`restrictions. After some delay, in July 2019, AIS provided BCBSM electronic records. BCBSM reviewed a
`sample of 618 claims with the S9238 per diem billing code, totaling $803,526.02 in payments. It
`determined that every single claim was unsupported by the medical record. The electronic records were
`comprised of the same types of documents that AIS provided as a part of PPUR, again confirming that AIS
`solely supplies the pharmaceutical component.
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`The extent of overpayments, of course, extends beyond the sampled claims. BCBSM believes that every
`claim AIS submitted with the S9238 per diem billing code was improper and violates the Agreement. From
`April 1, 2018 to present, BCBSM has paid AIS $6,406,792.13 for claims with the S9238 per diem billing
`code.
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`In discussions with BCBSM, AIS has asserted that it does perform services that are payable under the
`S9238 per diem billing code and referenced a January 2015 National Home Infusion Association article
`regarding the definition of “per diem.” That article proposes a standard definition because
`“reimbursement is often based upon a per diem approach, yet frequently this term is left undefined.” The
`proposed definition in an article does not override the plain language of AIS’s and BCBSM’s Agreement.
`The article itself states that the contract controls. (Not included in the definition of per diem are “[s]ervices
`and products not considered part of the per diem compensation as may be agreed to by provider and
`payer”). Even if the article controlled over the Agreement, the proposed definition limits the duration to
`every 72 hours, and AIS has been billing for more than that.
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`Simply put, AIS cannot justify payment of the S9238 per diem billing code. There are separate billing codes
`for the pharmaceutical component for which AIS is already being paid. AIS is not entitled to double
`payment.
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`Demand
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`BCBSM is committed to providing our members access to quality, affordable healthcare. Improper billing
`practices jeopardize our ability to do so. In this case, AIS has been enriched at the expense of BCBSM and
`our members by billing for the dispensing of medication and provision of ongoing services when it does
`nothing more than supply the drug. Therefore, we demand that you repay us $6,406,792.13 for claims
`that were submitted with the S9238 per diem billing code and paid by BCBSM. In the event you do not
`repay us $6,406,792.13, we reserve all rights and legal remedies to pursue recovery.
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`Sincerely,
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`Maria L. Martinez
`Assistant General Counsel
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`DocuSign Envelope ID: 7A46DA3E-A3B9-4D74-A13C-CEC3AAF39CB0
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