Volume 4, #3

October 2007

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Self-Administered Drugs in the Outpatient Setting

Ann Florer, RN, CCS-P
Corporate Compliance Analyst

In the Medicare Prescription Drug Benefit Final Rule, the following comment was made as to Medicare coverage for usually self-administered drugs:

“Patients in Emergency Departments, provider-based clinics, outpatient surgery, or under observation are often administered drugs (self-administered drugs or insulin, for example) under physician order for medically necessary conditions. These drugs are not covered under Part A or Part B and are billed to patients as a patient liability. For safety and quality of care reasons, patients often cannot bring their own medications into hospitals or outpatient settings when they are being treated for other conditions. This commenter asked for clarification regarding whether Part D plans will cover self-administered prescription drugs dispensed by hospital pharmacies; if so, how beneficiaries will avail themselves of their Part D benefits; and, if not, whether hospitals will have to provide drug coding and other detail on billing statements for beneficiaries so they can submit those statements to their Part D plans for reimbursement.”

Part D plans may include institutional pharmacies, including hospital-based pharmacies in their provider networks. If a hospital pharmacy is included in the patient’s Part D plan networks, Part D enrollees who are furnished covered Part D drugs by such pharmacies in the outpatient settings described above, “Usually Self-Administered Drugs” will be covered under the Part D plan.

CMS recognized that enrollees who are provided covered Part D drugs by hospital and other institutions in outpatient settings cannot reasonably be expected to obtain needed covered Part D drugs at a network pharmacy. The CMS Final Rule clarified that they expect that Part D plans guarantee out-of-network access to covered Part D drugs in cases in which an enrollee is provided covered Part D drugs dispensed by an out-of network institution-based pharmacy while a patient in an Emergency Department, provider-based clinic, outpatient surgery or other outpatient setting.

The Final Rule clarified that patients obtaining covered Part D drugs dispensed at out of-network pharmacies, will have to pay the pharmacy’s usual and customary (U&C) price, submit a paper claim to their Part D plan, and wait for reimbursement from the plan. Out-of-network pharmacies will therefore be made whole, relative to their U&C price for a covered Part D drug, at the point of sale. The Final Rule appeared to indicate that the facility should bill the patient for the self-administered medication when administered in the outpatient setting. The patient should then file a claim with their Part D plan.

The determination as to whether a medication is paid under Medicare Part B or Part D and how a hospital-based pharmacy is to bill for covered drugs is a complex issue for hospital pharmacies, especially as it relates to drugs deemed as “usually self administered” provided in an outpatient setting with an out-of-network pharmacy. CMS has released multiple MedLearn (MLN) Matters articles including FAQ’s, and provider communication forms many of which can be found at the following CMS Web site: http://www.cms.hhs.gov/pdps/PartBandPartDdoc-revised7-27-05.pdf.

A table explaining most Part B/D coverage Issues can be found at: http://www.cms.hhs.gov/pharmacy/downloads/partsbdcoverageissues.pdf

However many issues are still not clear relating to billing and coverage for Part D drugs, especially since there are no two Medicare Part D plans that are alike. Facilities are encouraged to contact their Fiscal Intermediaries or the specific Part D provider network when ambiguity exists.

References

• Federal Register / Vol. 70, No. 18 / Friday, January 28, 2005 / Rules and Regulations
• Medicare Benefit Policy Manual, Chapter 15, §50.2
• TrailBlazer Health Enterprises, LLC-Self Administered Drug
• Hospital OPPS, Final Rule