Local Coverage Article Billing and Coding

Billing and Coding: Hospital Outpatient Drugs and Biologicals Under the Outpatient Prospective Payment System (OPPS)

A55913

Expand All | Collapse All

Contractor Information

Article Information

General Information

Article ID
A55913
Article Title
Billing and Coding: Hospital Outpatient Drugs and Biologicals Under the Outpatient Prospective Payment System (OPPS)
Article Type
Billing and Coding
Original Effective Date
03/01/2018
Revision Effective Date
04/23/2020
Revision Ending Date
N/A
Retirement Date
N/A
AMA CPT / ADA CDT / AHA NUBC Copyright Statement

CPT codes, descriptions and other data only are copyright 2022 American Medical Association. All Rights Reserved. Applicable FARS/HHSARS apply.

Fee schedules, relative value units, conversion factors and/or related components are not assigned by the AMA, are not part of CPT, and the AMA is not recommending their use. The AMA does not directly or indirectly practice medicine or dispense medical services. The AMA assumes no liability for data contained or not contained herein.

Current Dental Terminology © 2022 American Dental Association. All rights reserved.

Copyright © 2022, the American Hospital Association, Chicago, Illinois. Reproduced with permission. No portion of the American Hospital Association (AHA) copyrighted materials contained within this publication may be copied without the express written consent of the AHA. AHA copyrighted materials including the UB‐04 codes and descriptions may not be removed, copied, or utilized within any software, product, service, solution or derivative work without the written consent of the AHA. If an entity wishes to utilize any AHA materials, please contact the AHA at 312‐893‐6816.

Making copies or utilizing the content of the UB‐04 Manual, including the codes and/or descriptions, for internal purposes, resale and/or to be used in any product or publication; creating any modified or derivative work of the UB‐04 Manual and/or codes and descriptions; and/or making any commercial use of UB‐04 Manual or any portion thereof, including the codes and/or descriptions, is only authorized with an express license from the American Hospital Association. The American Hospital Association (the "AHA") has not reviewed, and is not responsible for, the completeness or accuracy of any information contained in this material, nor was the AHA or any of its affiliates, involved in the preparation of this material, or the analysis of information provided in the material. The views and/or positions presented in the material do not necessarily represent the views of the AHA. CMS and its products and services are not endorsed by the AHA or any of its affiliates.

CMS National Coverage Policy

CMS Internet-Only Manual, Pub 100-04, Medicare Claims Processing Manual, Chapter 17, §90.2 Drugs, Biologicals, and Radiopharmaceuticals 

CMS Internet-Only Manual, Pub 100-04, Medicare Claims Processing Manual, Chapter 17, §90.3 Hospital Outpatient Payment Under OPPS for New, Unclassified Drugs and Biologicals After FDA Approval But Before Assignment of a Product-Specific Drug or Biological HCPCS Code

Article Guidance

Article Text

Palmetto GBA A/B MAC for JM and JJ has identified a pattern of incorrect billing of Part A hospital claims for unclassified drugs and biologicals under OPPS using HCPCS code C9399. Based on data analysis there have been numerous claims submitted listing C9399 for unclassified drugs and biologicals that do not meet the definition of a “new drug or biological”. Only new FDA approved drugs and biologicals, on or after January 1, 2004, that have not yet been assigned a specific HCPCS code are to be billed with the C9399 HCPCS code.  C-codes are for new drugs and biologicals and are generally replaced or expire after a year. After the year, if a drug or biological does not have an established or valid HCPCS code, then it should be billed with a NOC code.  NOC codes are for “Unclassified drugs” or “Not Otherwise Classified” drugs (J3490) and biologics (J3590).

Drugs and biologicals appropriately billed using C9399 are separately payable and are priced by Palmetto GBA using Average Wholesale Price (AWP) and CMS pricing methodology. NOC coded drugs and biologics (J3490 and J3590) are not separately paid and are considered inclusive of both the acquisition cost and the associated pharmacy overhead or nuclear medicine handling cost. 

The CMS Internet-Only Manual, Pub 100-04, Medicare Claims Processing Manual, Chapter 17, §90.2 provides the following instructions regarding hospital outpatient billing of Drugs and Biologicals:

Hospitals should report charges for all drugs, biologicals, and radiopharmaceuticals, regardless of whether the items are paid separately or packaged, using the correct HCPCS codes for the items used.”

“HCPCS code C9399, Unclassified drug or biological, is for new drugs and biologicals that are approved by FDA on or after January 1, 2004, for which a specific HCPCS code has not been assigned.”

Inappropriately using C9399 when a NOC code (J3490 or J3590) should be used is a billing error and may result in a claims payment error or overpayment. CMS has tasked all A/B MACs, including Palmetto GBA, to assist with reducing the national claims payment error rate.

The following are examples of drugs inappropriately billed using C9399 that should have been billed using J3490, J3590 or the specific assigned “J” HCPCS codes: 

  • Sugammadex- J3490-Unclassified drug 

  • Diltiazem HCL- J3490 – Unclassified drug 
  • Propofol - J3490 – Unclassified drug

Hospitals are encouraged to provide or improve quality assurance oversight of OPPS claims for drugs and biologicals in order to use the most current HCPCS code for the drug and/or biological on the claim submitted. On the CMS Medicare Coverage Database there is a listing of HCPCS codes specific for drugs:

 

2020 Table of Drugs

 

Hospital OPPS claims for drugs and biologicals should be billed with the appropriate HCPCS codes under revenue code 0636 (whether they are separately payable or packaged). This is consistent with the National Uniform Billing Committee (NUBC) billing guidelines, providing CMS and Palmetto GBA A/B MAC with the most complete and detailed information for accurate rate setting and claims payment.

 

Hospital OPPS claims for “Self Administered Drugs (SAD),” that are listed and posted on the Palmetto GBA A/B MAC JM and JJ websites, should be billed with the appropriate HCPCS code.

 

Palmetto GBA has identified a pattern of incorrect billing for the total quantity administered and billed for unclassified drugs and biologicals under OPPS using C9399. Some providers have billed each unit dose of the drug or biological on separate claim lines. The quantity of a C9399 drug or biological administered should be billed on “1” claim line for “1” unit dose for the date of service given. The total dose quantity administered needs to be indicated in the remarks field (Field Locator 80) on the UB-04 (CMS 1450 form) or the equivalent 5010 electronic claims field.

The CMS Internet-Only Manual, Pub 100-04, Medicare Claims Processing Manual, Chapter 17, §90.3 instructs, that on the claim, “providers must report: 

  1. the National Drug Code (NDC),

  2. total quantity of the drug that was administered, expressed in the unit of measure applicable to the drug or biological, and

  3. the date the drug was administered.” 

Coding Information

CPT/HCPCS Codes

Group 1

(3 Codes)
Group 1 Paragraph

N/A

Group 1 Codes
CodeDescription
C9399 UNCLASSIFIED DRUGS OR BIOLOGICALS
J3490 UNCLASSIFIED DRUGS
J3590 UNCLASSIFIED BIOLOGICS

CPT/HCPCS Modifiers

N/A

ICD-10-CM Codes that Support Medical Necessity

N/A

ICD-10-CM Codes that DO NOT Support Medical Necessity

N/A

Additional ICD-10 Information

N/A

Bill Type Codes

Contractors may specify Bill Types to help providers identify those Bill Types typically used to report this service. Absence of a Bill Type does not guarantee that the article does not apply to that Bill Type. Complete absence of all Bill Types indicates that coverage is not influenced by Bill Type and the article should be assumed to apply equally to all claims.

CodeDescription
012x Hospital Inpatient (Medicare Part B only)
013x Hospital Outpatient

Revenue Codes

Contractors may specify Revenue Codes to help providers identify those Revenue Codes typically used to report this service. In most instances Revenue Codes are purely advisory. Unless specified in the article, services reported under other Revenue Codes are equally subject to this coverage determination. Complete absence of all Revenue Codes indicates that coverage is not influenced by Revenue Code and the article should be assumed to apply equally to all Revenue Codes.

CodeDescription
0636 Pharmacy - Drugs Requiring Detailed Coding

Other Coding Information

N/A

Revision History Information

Revision History DateRevision History NumberRevision History Explanation
04/23/2020 R2

Under Article Text the Table of Drugs was updated to the 2020 Table of Drugs with the hyperlink.

10/03/2019 R1

This article is being revised in order to adhere to CMS requirements per chapter 13, section 13.5.1 of the Program Integrity Manual, to remove all coding from LCDs and incorporate into related Billing and Coding Articles. Regulations regarding billing and coding were added under CMS National Coverage Policy. Under Article Title changed the title from Correct Billing and Coding for Hospital Outpatient Drugs and Biologicals Under the Outpatient Prospective Payment System (OPPS) to Billing and Coding: Hospital Outpatient Drugs and Biologicals Under the Outpatient Prospective Payment System (OPPS).

Associated Documents

Related Local Coverage Documents
N/A
Related National Coverage Documents
N/A
Statutory Requirements URLs
N/A
Rules and Regulations URLs
N/A
CMS Manual Explanations URLs
N/A
Other URLs
N/A
Public Versions
Updated On Effective Dates Status
04/20/2020 04/23/2020 - N/A Currently in Effect You are here
Some older versions have been archived. Please visit the MCD Archive Site to retrieve them.

Keywords

  • Drugs
  • Biologicals