Pharmacy Billing :Medicare Part B and Part D

Changes in the healthcare reforms and new regulations bring updated, often the complex Medicare parts need to be understood, as when wrongly billed can cause a problem to the Revenue Cycle Management (RCM) process and delayed claims causing drop in revenues.

Despite some clarity by the CMS, there still exists a lot of confusion among most physicians along with Medicare patients, retail pharmacies, Medicare drug plans as well as Medicare Advantage health plans with respect to the billing of prescription drugs under what Medicare Part- especially Part B or/and Part D. The below is just to help bring some clarity to the confusion.

What is Medicare Part B coverage?

Part B is the Medicare outpatient Benefit covering most healthcare services, durable medical equipment (DME), preventive care ambulance services and more.

However, when referring to drug coverage under Medicare Part B certain basic situations are to be maintained:

  • Incident to Physician:

    This refers to drugs billed by physicians and provided for that patient (e.g. chemotherapy drugs);
  • Administered via Durable Medical Equipment:

    This refers to drugs billed by pharmacy suppliers and/but administered through durable medical equipment (DME) benefit (e.g. respiratory drugs given via nebulizer); and
  • Self administered:

    Some drugs which are billed by the pharmacy supplier but/ and self-administered by the patient (e.g., immunosuppressive drugs, some oral anti-cancer drugs).

However certain criteria should be followed especially for Medicare Part B drug coverage to be medically billed and coded right, with specific reference to the "incident to physician":

  • The drug is to be prescribed and dispensed by the physician or the physician should prescribe and administer the drug during a patient clinical visit.
  • Medicare Part B drug coverage is very often limited to those drugs or biologicals that are administered by injection or infusion.
  • However, if the injection is self-administered, it is not covered under Part B. That is, in most cases, Part B coverage of a specific drug stops if it is self-administered by more than half of Medicare beneficiaries on the drug.

Please note that there does exist regional differences where a specific drug could be covered in one state and not another. In such circumstances, especially in the absence of a national coverage decision by CMS, local coverage decisions are made by individual Medicare contractors (Part B claims processors, commonly called "MACS" or "carriers").

Under the Part B program, for the most part, payments for these drugs are made directly to the entity that has purchased and administered them, for example, doctors, hospitals, nursing homes or clinics. As a rule, the specific outpatient drugs and treatments that have always been covered under Part B continue to be covered under this benefit

What is Medicare part D coverage?

Part D is the outpatient prescription drug benefit for anyone with Medicare coverage. These drugs are ordinarily patient self-administered (e.g., tablets, capsules, creams and liquids), and are used for a broad array of common diseases and treatments

Although, most drugs are covered under Part D, there are some drugs that can be covered under both Part B or Part D BUT depending on its usage and how and where it is administered. Here for medical billing and coding, documentation is essential to get this right.

Part D plans that mistakenly submit cost data for Part B covered drugs as part of their Part D prescription drug event (PDE) data submission to the Centers for Medicare & Medicaid Services (CMS) can be charged with fraud and forced to pay significant penalties. Further, when it comes to compounded prescription drugs, only costs associated with those components that satisfy the definition of a Part D drug are allowable costs under Part D because the compounded products as a whole do not satisfy the definition of a Part D drug.

Another caution, medical billers and coders need to take note that, for certain prescription drugs, additional coverage or limit requirements may be in place, and unless documentation is well in place, billing should be checked. For example, certain specialty physicians prescribing drugs to patients covered under Medicare Part D, the request of prior authorizations on all prescriptions for certain drugs are essential. For example a chemotherapeutic drug when prescribed can be covered under Part B, but when used as an oral agent, is covered under Part D, and hence it should be very essential and crucial that when prescriptions are written, especially Part D drugs, which can be covered under Part B, and that this statement is only issued for information purpose that the prescription is a valid Part D prescription

Hence, medical billers and coders for pharmacies should be very diligent when billing or coding with respect to documentation, and should recheck the documentation and prescription with greater precaution.

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Published By - Medical Billers and Coders
Published Date - Apr-20-2016 Back

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