Billing and Coding: Hospital Outpatient Drugs and Biologicals Under the
Outpatient Prospective Payment System (OPPS)

Palmetto GBA A/B MAC for JM and JJ has identified a pattern of incorrect
billing of Part A hospital claims for unclassified drugs and biologicals under
OPPS using HCPCS code C9399. Based on data analysis there have been numerous
claims submitted listing C9399 for unclassified drugs and biologicals that do
not meet the definition of a "new drug or biological". Only new FDA approved
drugs and biologicals, on or after January 1, 2004, that have not yet been
assigned a specific HCPCS code are to be billed with the C9399 HCPCS code.
C-codes are for new drugs and biologicals and are generally replaced or expire
after a year. After the year, if a drug or biological does not have an
established or valid HCPCS code, then it should be billed with a NOC code.
NOC codes are for "Unclassified drugs" or "Not Otherwise Classified" drugs
(J3490) and biologics (J3590).

Drugs and biologicals appropriately billed using C9399 are separately payable
and are priced by Palmetto GBA using Average Wholesale Price (AWP) and CMS
pricing methodology. NOC coded drugs and biologics (J3490 and J3590) are not
separately paid and are considered inclusive of both the acquisition cost and
the associated pharmacy overhead or nuclear medicine handling cost.

The CMS Internet-Only Manual, Pub 100-04, Medicare Claims Processing Manual,
Chapter 17, 90.2 provides the following instructions regarding hospital
outpatient billing of Drugs and Biologicals:

_"_ _Hospitals should report charges for all drugs, biologicals, and
radiopharmaceuticals, regardless of whether the items are paid separately or
packaged, using the correct HCPCS codes for the items used. " _

__" HCPCS code C9399, Unclassified drug or biological, is for new drugs and
biologicals that are approved by FDA on or after January 1, 2004, for which a
specific HCPCS code has not been assigned." __

_Inappropriately_ _using C9399 when a NOC code (J3490 or J3590) should be used
is a billing error and may result in a claims payment error or overpayment.
CMS has tasked all A/B MACs, including Palmetto GBA, to assist with reducing
the national claims payment error rate._

The following are examples of drugs inappropriately billed using C9399 that
should have been billed using J3490, J3590 or the specific assigned "J" HCPCS
codes:

  * Sugammadex- J3490-Unclassified drug 

  * Diltiazem HCL- J3490 - Unclassified drug 
  * Propofol - J3490 - Unclassified drug

Hospitals are encouraged to provide or improve quality assurance oversight of
OPPS claims for drugs and biologicals in order to use the most current HCPCS
code for the drug and/or biological on the claim submitted. On the CMS
Medicare Coverage Database there is a listing of HCPCS codes specific for
drugs:



[2020 Table of
Drugs](https://www.cms.gov/Medicare/Coding/HCPCSReleaseCodeSets/Downloads/2020-Table-
of-Drugs.pdf)



Hospital OPPS claims for drugs and biologicals should be billed with the
appropriate HCPCS codes under revenue code 0636 (whether they are separately
payable or packaged). This is consistent with the National Uniform Billing
Committee (NUBC) billing guidelines, providing CMS and Palmetto GBA A/B MAC
with the most complete and detailed information for accurate rate setting and
claims payment.



Hospital OPPS claims for "Self Administered Drugs (SAD)," that are listed and
posted on the Palmetto GBA A/B MAC JM and JJ websites, should be billed with
the appropriate HCPCS code.



Palmetto GBA has identified a pattern of incorrect billing for the total
quantity administered and billed for unclassified drugs and biologicals under
OPPS using C9399. Some providers have billed each unit dose of the drug or
biological on separate claim lines. The quantity of a C9399 drug or biological
administered should be billed on "1" claim line for "1" unit dose for the date
of service given. The total dose quantity administered needs to be indicated
in the remarks field (Field Locator 80) on the UB-04 (CMS 1450 form) or the
equivalent 5010 electronic claims field.

The CMS Internet-Only Manual, Pub 100-04, Medicare Claims Processing Manual,
Chapter 17, 90.3 instructs, that on the claim, " _providers must report:  _

  1. _the National Drug Code (NDC),_

  2. _total quantity of the drug that was administered, expressed in the unit of measure applicable to the drug or biological, and_

  3. _the date the drug was administered. "  _