(Medicare Claims Processing Manual)

Medicare Claims Processing Manual  Chapter 17 - Drugs and Biologicals   Table of Contents  (Rev. 12201, 08- 10-23)   Transmittals for Chapter 17   10 - Payment Rules for Drugs and Biologicals  20 - Payment Allowance Limit for Drugs and Biologicals Not Paid on a Cost or Prospective Payment Basis  20.1 -  MMA Drug Pricing Average Sales Price  20.1.1 -  Online Pricing for Average Sales Price  20.1.2 -  Average Sales Price (ASP) Methodology  20.1.3 -  Exceptions to Average Sales Price (ASP) Payment Methodology 20.2 -  Single Drug Pricer (SDP)  20.3 -  Calculation of the Payment Allowance Limit for DME MAC Drugs  20.4 -  Calculation of the AWP  20.5 -  Detailed Procedures for Determining AWPs and the Drug Payment Allowance Limits  20.5.1 -  Background  20.5.2 -  Review of Sources for Medicare Covered Drugs and Biologicals  20.5.3 -  Use of Generics  20.5.4 -  Find the Strength and Dosage  20.5.5 -  Restrictions  20.5.6 -  Inherent Reasonableness for Drugs and Biologicals  20.5.7 -  Injection Services  20.5.8 -  Injections Furnished to ESRD Beneficiaries  20.5.9 -  Annual Update of AWP Payment Allowance Limit for Vaccines  30 - A/B MAC (B) Distribution of Limit Amounts  40 - Discarded Drugs and Biologicals  40.1 -  Discarded Erythropoietin Stimulating Agents for Home Dialysis  50 - Assignment Required for Drugs and Biologicals  60 - DMEPOS Suppliers Require a License to Dispense Drugs  60.1 -  Prescription Drugs Billed by Suppliers Not Licensed to Dispense Them  70 - Claims Processing Requirements -  General  70.1 -  Billing Drugs Electronically -  NCPDP  70.1.1 -  Reporting Modifiers in the Compound Drug Segment  70.1.2 -  Coordination of Benefits (COB)  70.1.3 -  Inbound NCPDP Claim  80 - Claims Processing for Special Drug Categories  80.1 -  Oral Cancer Drugs  80.1.1 -  HCPCS Service Coding for Oral Cancer Drugs  80.1.2 -  HCPCS and NDC Reporting for Prodrugs  80.1.3 -  Other Claims Processing Issues for Oral Cancer Drugs  80.1.4 -  MSN/Claim Adjustment Message Codes for Oral Cancer Drug Denials  80.2 -  Oral Anti -Emetic Drugs Used as Full Replacement for Intravenous Anti -Emetic Drugs as Part of a Cancer Chemotherapeutic Regimen  80.2.1 -  HCPCS Codes for Oral Anti -Emetic Drugs  80.2.2 -  Claims Processing Jurisdiction for Oral Anti- Emetic Drugs  80.2.3 -  MSN Denial/Claim Adjustment and Remark Messages for Anti- Emetic Drugs  80.2.4 -  Billing and Payment Instructions for A/B MACs (A)  80.3 -  Billing for Immunosuppressive Drugs  80.3.1 -  Requirements for Billing A/B MAC (A) for Immunosuppressive Drugs  80.3.2 -  MSN/Remittance Messages for Immunosuppressive Drugs  80.3.3 -  Special Requirements for Immunosuppressive Drugs  80.4 -  Billing for Hemophilia Clotting Factors  80.4.1 -  Clotting Factor Furnishing Fee  80.5 -  Self-Administered Drugs  80.6 -  Intravenous Immune Globulin 80.7 -  Pharmacy Supplying Fee  and Inhalation Drug Dispensing Fee  80.8 -  Reporting of Hematocrit and/or Hemoglobin Levels  80.9 -  Required Modifiers for ESAs Administered to Non- ESRD Patients  80.10 -  Hospitals Billing for Epoetin Alfa (EPO) and Darbepoetin Alfa (Aranesp) for Non- ESRD Patients  80.11 -  Requirements for Providing Route of Administration Codes for Erythropoiesis Stimulating Agents (ESAs)  80.12 -  Claims Processing Rules for ESAs Administered to Cancer Patients for Anti- Anemia Therapy  80.13 -  Supplier Payment Under Medicare Part B for Insulin Furnished Through            Durable Medical Equipment  90 - Claims Processing Rules for Hospital Outpatient Billing and Payment  90.1 -  Blood/Blood Products and Drugs Classified in Separate APCs for Hospital Outpatients  90.2 -  Drugs, Biologicals, and Radiopharmaceuticals  90.3 -  Hospital Outpatient Payment Under OPPS for New, Unclassified Drugs and Biologicals After FDA Approval But Before Assignment of a Product -Specific Drug/Biological HCPCS Code  90.4 -  Hospital Billing for Take Home Drugs  100 -  The Competitive Acquisition Program (CAP) for Drugs and Biologicals Not Paid on a Cost or Prospective Payment Basis  100.1 -  Physician Election and Information Transfer Between A/B MACs (B) and the Designated A/B MAC (B)  for CAP Claims  100.1.1 -  Physician Information for the Designated A/B MAC (B)  100.1.1.1 -  Quarterly Updates  100.1.2 -  Format for Data  100.1.3 -  Physician Information for the Vendors  100.2 -  Claims Processing Instructions for CAP Claims for the A/B MACs (B)  100.2.1 -  CAP Required Modifier s 100.2.2 -  Submitting the Charges for the Administration of a CAP Drug and the No Pay Service Lines  100.2.3 -  Submitting the Prescription Order Numbers and No Pay Modifiers  100.2.3.1 -  Further Editing on the Prescription Order Number  100.2.4 -  CAP Claims Submitted With Only the No Pay Line  100.2.5 -  Use of the Restocking Modifier  100.2.6 -  Use of the Furnish as Written Modifier  100.2.7 -  Monitoring of Claims Submitted With the J2 and/or J3 Modifiers  100.2.8 -  Claims Submitted for Only Drugs Listed on the Approved CAP Vendors Drug List 100.2.9 -  Submission of Claims With  the Modifier JW, Drug Amount Discarded/Not Administered to Any Patient  100.2.10 -  MSP Situations Under CAP  100.3 -  Application of Local Medical Review Policies  100.4 -  Claims Processing Instructions for the Designated A/B MAC (B)  100.4.1 -  Creation of Internal Vendor Provider Files  100.4.2 -  Submission of Paper Claims by Vendors  100.4.3 -  Submission of Claims from Vendors With the J1 No Pay Modifier  100.4.4 -  Submission of Claims from Vendors Without a Provider Primary Identifier for the Ordering Physician  100.4.5 -  New MSN Message to Be Included on All Vendor Claims  100.4.6 -  Additional Medical Information  100.4.7 -  CAP Fee Schedule 100.5 -  Matching the Physician Claim to the Vendor Claim  100.5.1 -  Denials Due to Medical Necessity  100.5.2 -  Denials For Reasons Other Than Medical Necessity  100.5.3 -  Changes to Pay/Process Indicators  100.5.4 -  Post -Payment Overpayment Recovery Actions  100.5.5 -  Pending and Recycling the Claim When All Lines Do Not Have a Match 100.5.6 -  Creation of a Weekly Report for Claims That Have Pended More Than 90 Days and Subsequent Action 100.6 -  Coordination of Benefits  100.7 -  National Claims History  100.8 -  Adding New Drugs to CAP  100.8.1-  Updating Fee Schedule for New Drugs in CAP  100.8.2- Changes to the List of Drugs Supplied by Approved CAP Vendors  100.8.3 -  CAP Not Otherwise Classified (NOC) Drugs  100.8.3.1 -  Editing for CAP NOC Drugs  100.9 -  Non -participating Physicians Who Elect the CAP  101 -  The Competitive Acquisition Program (CAP) for Drugs and Instructions on Special CAP Appeals Requirements and Delivery of Dispute Resolution Services  101.1- Dispute Resolution Services for Vendors  101.2- Dispute Resolution Services for Physicians  101.3- Dispute Resolution Services for Beneficiaries   10 - Payment Rules for Drugs and Biologicals  (Rev.11764, Issued: 12-22-2022; Effective:01-01- 23; Implementation:01-03 -23 )  Drugs for inpatient hospital and inpatient skilled nursing facility (SNF) beneficiaries are included in the respective prospective payment system (PPS) rates, except for hemophilia clotting factors for hospital inpatients under Part A.   All hospital outpatient drugs are excluded from SDP because the payment allowance for such drugs is determined by a different methodology.  Non pass -through drugs with estimated per day costs less than or equal to the applicable drug packaging threshold that are furnished to hospital outpatients are packaged under the outpatient prospective payment system (OPPS).  Their costs are recognized and included but paid as part of the ambulatory payment classification (APC) group payment for the service with which they are billed.  Non pass -through drugs with estimated per day costs greater than the applicable drug packaging threshold are paid separately.   Drugs that are granted pass through payment status are required by law to be paid at either the amount paid under the physician fee schedule, or, if the drug is included in the Part B drug competitive acquisition program (CAP), at the Part B drug CAP rat e.  Drugs that have pass -through status may have coinsurance amounts that are less than 20 percent of the OPPS payment amount.  This is because pass -through payment amounts, by law, are not subject to coinsurance.  CMS considers the amount of the pass-through drug payment rate that exceeds the otherwise applicable OPPS payment rate to be the pass-through payment amount.  Thus, in situations where the pass -through payment rate exceeds the otherwise applicable OPPS payment rate, the coinsurance is based on a portion of the total drug payment rate, not the full payment rate.   Hospitals must report all appropriate HCPCS codes and charges for separately payable drugs, in addition to reporting the applicable drug administration codes.  Hospitals should also report the HCPCS codes and charges for drugs that are packaged into payments for the corresponding drug administration or other separately payable services.  Historical hospital cost data may assist with future payment packaging decisions for such drugs.  Drugs are billed in multiples of the dosage specified in the HCPCS code lo ng descriptor.  If the drug dose used in the care of a patient is not a multiple of the HCPCS code dosage descriptor, the provider rounds to the next highest unit based on the HCPCS long descriptor for the code in order to report the dose provided.   If the full dosage provided is less than the dosage for the HCPCS code descriptor specifying the minimum dosage for the drug, the provider reports one unit of the HCPCS code for the minimum dosage amount.   OPPS Pricer includes a table of drugs and prices and provides the contractor with the appropriate prices.   Section 90 relates specifically to billing for hospital outpatients.  The remainder of this chapter relates to procedures for pricing and paying DME recipients, and to beneficiaries who receive drugs under special benefits such as pneumococcal, flu and hepatitis vaccines; clotting factors, immunosuppressive therapy, self administered cancer and anti emetic drugs, and drugs incident to physicians  services.   The Medicare Prescription Drug, Improvement, and Modernization Act (MMA) of 2003 defines a Specified Covered Outpatient Drug (SCOD) as a covered outpatient drug for which a separate APC has been established and that is either a radiopharmaceutical agent, o r a drug or biological for which payment was made on a pass -through basis on or before December 31, 2002.  Payment for SCODs is set, by law, at the average acquisition cost.  Under the OPPS, a single payment is made for SCODs that represents payment for both the acquisition cost of the drug and any associated pharmacy overhead or nuclear medicine handling costs.  Drugs or biologicals must meet the coverage requirements in Chapter 15 of the Medicare Benefit Policy Manual.  Additionally, for end stage renal disease (ESRD) patients, see the Medicare Benefit Policy Manual, Chapter 11.  For ESRD patient billing for drugs and claims processing, see Chapter 8 of this manual.