Last Modified: 8/8/2020
Location: FL, PR, USVI
Business: Part A
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.
• Guidelines for reviewing injectable drugs incident to a physician’s service are in the
Medicare Benefit Policy Manual, 100-02,
Chapter 15 
, section 50.2
• Additional information on services excluded from coverage are outlined in the
Medicare Benefits Policy Manual, 100-02,
Chapter 16 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 , 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
Source: Education Action Team
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, Attachment A - Integrated OCE Specs, Table 3: Edit Return Buffers 
