August 01, 2011 | | Comments 3
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New and confusing guidance on self-administered drugs

Coverage of self administered drugs under Part B is very confusing, but I thought I at least had somewhat of a handle on the self administered drug exclusion as it interacts with the OPPS until the most recent Open Door Forum on July 13th.  During that call, CMS made comments that appear to muddy the waters when it comes to coverage of self-administered drugs provided as part of a procedure or treatment, and treated as covered supplies under OPPS policies.

The original comment made by the CMS representative related to administration of insulin in the emergency department.  They referred to the Benefit Policy Manual regarding self-administered drugs and stated that the contractors can not pay for drugs administered on an emergency basis if it is excluded as self-administered.  I was concerned with how this might interact with the policy in A-02-129, a Program Transmittal from the inception of OPPS.

In Transmittal A-02-129, CMS discussed drugs, including self-administered drugs, that are so integral to a procedure or treatment that the procedure or treatment could not be performed without them.  The policy states that these drugs would be treated as packaged supplies under OPPS.  This is significant because as packaged supplies they are covered as part of the procedure or treatment and billed to Medicare as covered, rather than the patient as non-covered.  The transmittal mentions such items as sedatives in a pre-op area, eye drops, topical solutions, lidocaine and others.

I asked a follow-up question because I was concerned that the CMS representative’s comments could be construed to mean that things that are integral to ED procedures and treatments, and that would be considered packaged supplies under A-02-129, would nevertheless not be covered because they were self administered. I specifically asked, if insulin or other drugs were integral so that we couldn’t complete treatment without them (i.e. couldn’t discharge the patient), were they packaged or was this extending the packaging policy too far, and if so where is the boundary.

The CMS representative stated that the determination doesn’t hinge on the necessity of the item in relationship to the procedure, but rather applies to some drugs that are “used more as a supply.”  The CMS representative indicated that eye drops would be a good example of this, and insulin is not.

This seems to turn A-02-129 on its head.  The language seems to identify these drugs not by how they are used like a supply, but rather by the fact that they are integral to the procedure.  In addition to providing a list of examples, including sedatives in a pre-op area, the transmittal provides the following policy:

Certain drugs are so integral to a treatment or procedure that the treatment or procedure could not be performed without them. Because such drugs are so clearly an integral component part of the procedure or treatment, they are packaged as supplies under the OPPS into the APC for the procedure or treatment.

CMS further went on to clarify this issue in the CY2003 OPPS final rule stating:

A drug would be treated as a packaged supply in cases where, although the drug is not separately payable, it is directly related and integral to a procedure or treatment and is required to be provided to a patient in order for a hospital to perform the procedure or treatment during a hospital outpatient encounter.

Perhaps what CMS is trying to do here is add a second criterion for drugs to be treated as packaged supplies.  The drug must first be integral as stated in A-02-129, but then secondarily, although not formally written in that policy, they must be “more used as a supply.”  I have to say, though, that it is unclear to me how to distinguish between drugs that are “more used as a supply” and covered, and drugs that are not and therefore, even if integral to a procedure, not covered.  

This is especially confusing in light of something like pre-op sedatives being on the list of drugs “more used like a supply,” because they don’t seem to be used differently than other pills or injections.  I asked CMS for further clarification on where the boundary is for drugs “more used as a supply” in the form of new FAQs or other clarification.  A second caller asked for similar guidance.

Until we have more guidance, I would encourage you to speak with your MAC or FI for further clarification on this issue.  This is an important distinction because if you follow the policy as written you could be billing Medicare for non-covered drugs as though they are covered.  Also, as more of you are charging your patients for self-administered drugs, if you charge for drugs that CMS considers a packaged supply it would be considered double billing.  Therefore, because there are consequences for erring on either side, clarity on this issue is vital.  I do hope CMS issues national guidance in the near future.

Entry Information

Filed Under: Open Door ForumOPPS


Kimberly Hoy About the Author:

Kimberly Anderwood Hoy is director of Medicare and compliance for HCPro, Inc.

As a hospital compliance officer, Kimberly regularly provided research and guidance on coding, billing, and reimbursement issues for a wide range of hospital services. She has a particular expertise in charge description master operation, development, and maintenance. She has experience conducting billing compliance audits and internal investigations. Kimberly also has had primary responsibility for HIPAA privacy regulation compliance, including risk assessment, program development, implementation of policies and procedures, and ongoing operations.

As In-House Legal Counsel, Kimberly had oversight of expense contracting and regulatory compliance, including federal and state laws and regulations. Kimberly regularly provided legal advice on such complex topics as consents, EMTALA, Stark, anti-kickback and anti-inducement laws, physician recruiting, and tax exemption regulations.

Kimberly has served as a speaker at compliance-related conferences in the areas of compliance program effectiveness and physician education. Kimberly is an active member of the American and California Bar Associations, the American Health Lawyers Association and the Health Care Compliance Association.

Kimberly earned her Juris Doctor degree from the University of Montana School of Law, where she received the Corpus Juris Secundum Award for Excellence in Contracts. She also holds a Bachelor of Arts degree in Philosophy from Yale University.

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  1. This has been a previous topic of discussion. I have been advised by a concsulting company not to report administration codes for insulin as this is considered a self administrable drug even though they were administered by nursing staff. So am I understanding this correctly? Insulin is not considered self administrable and therefore should be reported for example in the ER or Observation settting?

  2. Are all insulins considered self administered? If so should they be billed with a GY modifer? Thanks for any help.

  3. I would like to see you question answered also….with everything I have read the one for sure conclusion I have come to is–medication in oral pill form is considered to be usually self-administered by the patient.

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