Revenue Cycle

CAHs take note: CMS issues additional self-administered drug guidance

Medicare Update for CAHs, October 19, 2011

As a general rule, critical access hospitals as well as PPS hospitals across the country seem to struggle with the coverage of self-administered drugs (SADs) under Medicare Part B. Recent CMS guidance has made things even more complicated, so CAH providers should take a look into these regulations to see how they apply.

Sometimes, this is not as simple as it sounds. During the July 13 hospital and hospital quality open door forum, CMS offered some new guidance on self-administered drugs that seemed to contradict transmittal A-02-129, which discusses self-administered drugs covered as packaged supplies when they are integral to a procedure or treatment. As a result, on the August 23 open door forum, CMS further clarified its stance.

In response to questions relating to the aforementioned transmittal, John McInnes, MD, the director of the Division of Outpatient Care for CMS, discussed the bulleted items listed under the “drugs treated as supplies” section in the transmittal, which include:

  • Sedatives administered to patients in the pre-operative area;
  • Eye drops prior to eye surgery;
  • Barium or low osmolar contrast media for diagnostic imaging;
  • Topical solutions for photodynamic therapy;
  • Local anesthetics; and
  • Antibiotic ointments applied to a wound or surgical incision.

McInnes stated that the policy in the transmittal is very limited, and that the overwhelming majority of self-administered drugs would not be covered because of the general policy of non-coverage of self-administered drugs. He also indicated that providers should compare other drugs to the list as a way of determining whether they would be considered packaged supplies and if they have further questions, to follow up with local contractors.

According to Debbie Mackaman, RHIA, CHCO, regulatory specialist for HCPro, Inc., this guidance is both helpful and confusing.

“On one hand, it clarifies that the list of drugs treated as supplies is very limited and helps take the guesswork out of what drugs would or would not qualify as ‘integral to’ a procedure or treatment and therefore not separately billable to the patient as a self-administered drug,” she says.

She continued, “It is, however, a little confusing because the instruction is not clearly stated in any manual guidance and the providers must rely on their Medicare contractors to advise them. Unfortunately the guidance that providers receive from their MACs can be inconsistent.”

In transmittal A-02-129, CMS states that fraud and abuse concerns may arise if a hospital does not bill Medicare outpatients for SADs. Any hospital that chooses, to not bill the patient for SADs could implicate other statutory and regulatory provisions including the prohibition on inducements to beneficiaries, so hospitals should be diligent in reviewing their Medicare contractor’s list of drugs that are excluded from coverage, according to Mackaman.

“Keep in mind that the published list will only include drugs with HCPCS codes, so hospitals will also need to identify any other drugs (oral, topical, suppository, subcutaneous) that may not have HCPCS codes, and meet the definition of self-administered,” she says. “All of these drugs will then need to be reviewed for how they are used in particular situations or treatment areas and those that are not considered integral to the outpatient procedure should be billed to the patient as SADs.”

She continued, “Critical access hospitals have unique public relations situations due to the small communities that they serve. However, CAHs can develop policies to assist patients who may have financial difficulties paying for SADs.”


Most Popular