Revenue Cycle

July OPPS update: Self-administered drugs

Recovery Auditor Report, June 28, 2012

Last week, Kimberly provided an overview of the many significant updates and clarifications that were released in two transmittals – Medicare Claims Processing Manual 2483 and Medicare Benefit Policy Manual 157.

This week I wanted to expound on the new section that was added for self-administered drugs (SADs). Although this is not necessarily a change in CMS policy, it is intended to help facilities more easily identify those drugs that may be considered to be “integral to” an outpatient procedure and function more as a supply where their payment is packaged into the payment for the procedure. Since 2002, providers have been relying on Program Memorandum A-02-129 for guidance regarding what SADs are packaged supplies to treatment and procedures and therefore, cannot be billed to the patient in the outpatient setting. As Kimberly mentioned last week, the new section appears to be limiting coverage to drugs that are an integral component of a procedure or are directly related to it.

Providers have struggled with this concept for years because how the drug is going to be billed (i.e. packaged under revenue code 0250 or billed to patient under revenue code 0637) may depend on where the patient is receiving the outpatient service. A drug that is used in the emergency department for treatment may be considered an SAD where the same drug used for an outpatient surgery may be considered packaged into the procedure. Prior to this new section and as recently as an August 2011 Hospital Open Door Forum call, the CMS representative indicated that the list in A-02-129 is limited and the “overwhelming majority” of self-administered drugs are non-covered. At that time, the representative recommended comparing other items to the list to determine if they should be considered packaged supplies.

Continue reading Debbie's note at the Medicare Mentor Blog.

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