Appeal type: unknown
Decision: unknown

Citations used in this letter come from Section 42 of the Code of Federal Regulations which you will findabbreviated as 42 CFR with the corresponding section numbers, i.e., 42 CFR Sections 423.578, 423.100.Compounded prescription drug products can contain (1) all Part D drug product components; (2) some PartD drug product components; or (3) no Part D drug product components. Only costs associated with thosecomponents that satisfy the definition of a Part D drug are allowable costs under Part D because thecompounded products as a whole do not satisfy the definition of a Part D drug. The labor costs associatedwith mixing a compounded product that contains at least one Part D drug component can be included in thedispensing fee (as defined in 423.100). Medicare Prescription Drug Benefit Manual, Chapter 6, Section 10.For a drug to be covered under Medicare Part D, it must meet the definition of a Part D drug. The SocialSecurity Act generally defines a Part D drug as a drug product that meets the following requirements:- It requires a prescription for dispensing; and- It is approved by the Food and Drug Administration (FDA) for safety and effectiveness; and- It is prescribed for a medically accepted indication; and- It is not otherwise excluded from coverage under Part D law and rules.See Social Security Act, Sections 1860D-2(e)(1) and 1927(k)(2)(A)(i)-(iii); 42 CFR Section 423.100; andMedicare Prescription Drug Benefit Manual, Chapter 6, Section 10.The definition of a Part D drug includes only those prescription drugs that are approved by the FDA forsafety and effectiveness. For a drug to be approved by the FDA, the manufacturer of the drug must file aNew Drug Application (NDA) or Abbreviated New Drug Application (ANDA) with the FDA's Center forDrug Evaluation and Research (CDER). Medicare Part D does not pay for drugs that are not FDA approvedprescription drugs. See Social Security Act, Sections 1860D-2(e)(1) and 1927(k)(2)(A)(i)-(iii).A covered prescription drug must be used for a medically accepted indication. A medically acceptedindication means a use that is approved by the Food and Drug Administration (FDA), or a use supportedby one or more citations in the drug compendia approved by Medicare. Medically accepted indications donot include uses in research or uses described in peer-reviewed medical literature. Please refer to SocialSecurity Act, Sections 1860D-2(e)(1), 1927(k) and 1927(d)(4)(C); and 42 CFR Section 423.100.A Part D drug must be used for a medically accepted indication that facilitates the diagnosis or treatment ofillness or injury or to improve the functioning of a malformed body member (except for Part D vaccines).Consequently, if a drug works on medical equipment or devices and is not used for a medically acceptedindication of therapeutic value on the body, it cannot satisfy the definition of a Part D drug. For example, aHeparin flush is not used to treat a patient for a medically accepted indication, but rather to dissolvepossible blood clots around an infusion line. Therefore, Heparin's use in this instance is not therapeutic butis, instead, necessary to make durable medical equipment work. It would therefore not be a Part D drugwhen used in a Heparin flush. Medicare Prescription Drug Benefit Manual, Chapter 6, Section 10.6.