Appeal type: unknown
Decision: unknown

Citations used in this letter come from Section 42 of the Code of Federal Regulations which you will find abbreviated 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 Part D drug product components; or (3) no Part D drug product components. Only costs associated with those components that satisfy the definition of a Part D drug are allowable costs under Part D because the compounded products as a whole do not satisfy the definition of a Part D drug. The labor costs associated with mixing a compounded product that contains at least one Part D drug component can be included in the dispensing 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 Social Security 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; and Medicare 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 for safety and effectiveness. For a drug to be approved by the FDA, the manufacturer of the drug must file a New Drug Application (NDA) or Abbreviated New Drug Application (ANDA) with the FDA's Center for Drug Evaluation and Research (CDER). Medicare Part D does not pay for drugs that are not FDA approved prescription 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 accepted indication means a use that is approved by the Food and Drug Administration (FDA), or a use supported by one or more citations in the drug compendia approved by Medicare. Medically accepted indications do not include uses in research or uses described in peer-reviewed medical literature. Please refer to Social Security 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 of illness 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 accepted indication of therapeutic value on the body, it cannot satisfy the definition of a Part D drug. For example, a Heparin flush is not used to treat a patient for a medically accepted indication, but rather to dissolve possible blood clots around an infusion line. Therefore, Heparin's use in this instance is not therapeutic but is, instead, necessary to make durable medical equipment work. It would therefore not be a Part D drug when used in a Heparin flush. Medicare Prescription Drug Benefit Manual, Chapter 6, Section 10.6. The Plan does not cover drugs/items excluded from Medicare Part D coverage. If you purchase drugs/items that are excluded, you must pay for them yourself. Please refer to the Plan's Evidence of Coverage (EOC).