Billing and Coding: Patients Supplied Donated or Free-of-Charge Drug

The Medicare Program provides limited benefits for outpatient drugs. The program covers drugs that are furnished "incident to" a physician's service, provided that the drugs are not usually self-administered by the patients who take them, and is reasonable and necessary for the diagnosis or treatment of the illness or injury according to accepted standards of medical practice. In order to meet all the general requirements for coverage under the "incident to" provision an FDA approved drug or biological must be furnished by a physician and administered by the physician or by auxiliary personnel employed by the physician and under the physician's personal supervision. The charge, if any, for the drug or biological must be included in the physician's bill and the cost of the drug or biological must represent an expense to the physician. Pharmacies cannot bill Medicare Part B for drugs furnished to a physician for administration to a Medicare beneficiary. Pharmacies, suppliers and providers cannot bill Medicare Part B for drugs dispensed directly to a beneficiary for administration "incident to" a physician service, such as refilling an implanted drug pump. Providers can bill Medicare only when such drugs are purchased by the physician, from the pharmacy, and administered in the physician's office. Donated or Free-of-Charge Drug To avoid a chemotherapy or other drug administration code denial, a drug code must be present on the same or prior claim. Enter the below information in the appropriate Part A or Part B electronic claim or the equivalent Part A UB04 or Part B CMS-1500 claim form. Part A Loop 2400 Segment SV202-7 or Box 80 Enter "Drug Donated" Enter code description, strength and dosage - if billing a Not Otherwise Classified (NOC) HCPCS code Loop 2400 Segment SV202-2 or Box 44 Enter drug (HCPCS) code Loop 2300 Segment CLM02 or Box 47 and 48 Enter $0.01 for the billed amount Part B Loop 2400 Segment SV101-7 for the 5010A1 837P or Item 19 Enter "Drug Donated" Enter code description, strength and dosage - if billing a Not Otherwise Classified (NOC) HCPCS code Loop 2400 Segment SV101-2 or Item 24D Enter drug (HCPCS) code Loop 2300 CLM02 or Item 28 Enter $0.01 for the billed amount This will allow the claim processing system to register the drug claim as being allowed which should allow the administration. NOTE: Per the "incident to" guidelines explained above and in the CMS Internet-Only Manual (IOM) Publication 100-02, Chapter 15, Sections 50 and 50.3 (MBPM) . Providers are NOT allowed to instruct their patients to purchase the drug themselves and then bring them to the provider's office for administration. If the drug is not supplied as a donation or free of charge, then the provider must provide the drug under incident to guidelines.