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Self-administered drugs excluded from Medicare coverage

APCs Weekly Monitor, January 21, 2005

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Self-administered drugs excluded from Medicare coverage

Question: We are a hospital and administer medically necessary medications to a patient, even though the patient can physically pop a pill into his own mouth.  I know that you may charge a patient for these self-administered drugs if they sign an ABN in advance. But when a patient receives covered services at a hospital, the reasonable expectation is that the medicines they are given for their condition should also be covered. Is this the case?

Also, if we use the same charge codes for inpatient services, how can we switch to billing as non-covered for outpatients?  And what is the appropriate revenue code for self-administered drugs?

Answer: Self-administered medications are statutorily excluded from coverage for Medicare beneficiaries. There are other services which also are statutorily noncovered, for example dental services. 

When patients arrive at your facility to seek care for a covered service or ailment, this does not mean everything they receive during that visit is covered.  As you point out, in most instances patients can sign an ABN (advanced beneficiary notice) acknowledging their financial responsibility prior to receiving a noncovered service. 

In the case of statutorily noncovered services, Medicare beneficiaries are notified via their Medicare Handbook and therefore an ABN is not necessary.  Medicare assumes that patients who receive statutorily noncovered services are already aware they are financially responsible. Providers should only give patients ABNs for self administered medication as a courtesy to remind patients of their responsibility. 

Do not bill self-administered drugs as covered services to Medicare. Self-administered drugs may be reported as non-covered with revenue codes 259, 637, or another revenue code as instructed by the Medicare FI. 

Bill drugs that are not self-administered to Medicare as covered services with the appropriate revenue code, provided all other Medicare coverage requirements have been met.  Do not bill the beneficiary for drugs covered by the Medicare program.

Examples of situations in which drugs provided in an outpatient setting are "self-administered" include, but are not limited to:

 Drugs are given to a patient for continued use at home after leaving the hospital.

 A patient undergoing surgery needs his or her daily insulin or hypertension medication.

Examples of situations in which drugs provided in an outpatient setting are not "self-administered" include, but are not limited to:

 Sedatives administered to patients preparing for a procedure in the preoperative area.

 Mydriatic drops instilled into the eye to dilate the pupils, anti-inflammatory drops, antibiotic ointments, and ocular hypotensives administered to the patient immediately before, during, or immediately following an ophthalmic procedure.

 Barium or low osmolar contrast media are supplies integral to a diagnostic imaging procedure.

 Topical solution used with photodynamic therapy furnished at the hospital to treat nonhyperkeratotic actinic keratosis lesions of the face or scalp.

 Local anesthetics such as marcaine, lidocaine (with or without epinephrine).

 Antibiotic ointments such as bacitracin, placed on a wound or surgical incision at the completion of a procedure.

 Statutory exclusions from the self-administered drug provision, such as blood clotting factors, drugs used for immunosuppressive therapy, EPO, certain oral anti-cancer drugs, and their associated antiemetics.

Note that self-administered drugs are eligible for coverage under the new Medicare prescription drug benefit, or Part D. CMS should release proposed rules regarding this in the future. 

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