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Last Modified: 8/8/2020 Location: FL, PR, USVI Business: Part A

How to bill non-covered self-administered drugs

The Centers for Medicare & Medicaid Services (CMS) provides instructions to contractors regarding Medicare payment for drugs and biologicals incident-to a physician’s service. The instructions also provide the contractor with a process for understanding if an injectable drug is “usually” self-administered (to mean a drug you would normally take on your own) and therefore not covered by Medicare.
The term “usually” means that the drug is self-administered more than 50 percent of the time for all Medicare beneficiaries who use the drug, and are considered excluded from coverage.
Refer to the list of excluded self-administered drugs (SAD) external pdf file incident to a physician’s service
Guidelines for reviewing injectable drugs incident to a physician’s service are in the Medicare Benefit Policy Manual, 100-02, Chapter 15 external pdf file, section 50.2
Additional information on services excluded from coverage are outlined in the Medicare Benefits Policy Manual, 100-02, Chapter 16 external pdf file
Providers are not required to bill non-covered self-administered drugs, unless requested by the beneficiary or secondary insurance. If a line item denial is required that holds the beneficiary liable for the non-covered self-administered pharmacy services, the outpatient claim should be submitted as follows:
Revenue code 0637
HCPCS code that describes the services rendered; or,
Use A9270 (non-covered item or service) when there is no other appropriate code
Modifier GY (item or service statutorily excluded or does not meet the definition of any Medicare benefit)
Reason code 31324 will append to the line item when the GY modifier is present, and holds the beneficiary liable
Reason code 31947 will apply to the line item when the GY modifier is not present, and holds the provider liable
Advanced beneficiary notice (ABN) is not required
Charges non-covered
Do not submit the charges as covered
Additional guidance on reporting covered and non-covered charges on the same claim are outlined in the Medicare Claims Processing Manual, 100-04, Chapter 1 external pdf file, section 60
The outpatient code editor (OCE) status indicator is ‘E’ (non-covered) when revenue code 0637 is submitted without a HCPCS. In order to bypass the return to provider (RTP) reason code W7050 (non-covered based on statutory exclusion), the charges must be submitted as non-covered or as outlined above.
Reason code 31947 will apply to the line item when the charges are submitted as non-covered without a HCPCS, and holds the provider liable
Refer to the most recent OCE Quarterly Release Files external link, Attachment A - Integrated OCE Specs, Table 3: Edit Return Buffers
Source: Education Action Team
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