Local Coverage Article Billing and Coding

Billing and Coding: Patients Supplied Donated or Free-of-Charge Drug

A55045

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Contractor Information

Article Information

General Information

Article ID
A55045
Article Title
Billing and Coding: Patients Supplied Donated or Free-of-Charge Drug
Article Type
Billing and Coding
Original Effective Date
10/01/2015
Revision Effective Date
04/28/2020
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.

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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

N/A

Article Guidance

Article Text

The Medicare Program provides limited benefits for outpatient drugs. The program covers drugs that are furnished "incident to" a physician's service, provided that the drugs are not usually self-administered by the patients who take them, and is reasonable and necessary for the diagnosis or treatment of the illness or injury according to accepted standards of medical practice.

In order to meet all the general requirements for coverage under the "incident to" provision an FDA approved drug or biological must be furnished by a physician and administered by the physician or by auxiliary personnel employed by the physician and under the physician's personal supervision.

The charge, if any, for the drug or biological must be included in the physician's bill and the cost of the drug or biological must represent an expense to the physician.

  • Pharmacies cannot bill Medicare Part B for drugs furnished to a physician for administration to a Medicare beneficiary.
  • Pharmacies, suppliers and providers cannot bill Medicare Part B for drugs dispensed directly to a beneficiary for administration "incident to" a physician service, such as refilling an implanted drug pump.
  • Providers can bill Medicare only when such drugs are purchased by the physician, from the pharmacy, and administered in the physician's office.


Donated or Free-of-Charge Drug

To avoid a chemotherapy or other drug administration code denial, a drug code must be present on the same or prior claim. Enter the below information in the appropriate Part A or Part B electronic claim or the equivalent Part A UB04 or Part B CMS-1500 claim form.

  • Part A
    • Loop 2400 Segment SV202-7 or Box 80
      • Enter "Drug Donated"
      • Enter code description, strength and dosage - if billing a Not Otherwise Classified (NOC) HCPCS code
    • Loop 2400 Segment SV202-2 or Box 44
      • Enter drug (HCPCS) code
    • Loop 2300 Segment CLM02 or Box 47 and 48
      • Enter $0.01 for the billed amount
  • Part B
    • Loop 2400 Segment SV101-7 for the 5010A1 837P or Item 19
      • Enter "Drug Donated"
      • Enter code description, strength and dosage - if billing a Not Otherwise Classified (NOC) HCPCS code
    • Loop 2400 Segment SV101-2 or Item 24D
      • Enter drug (HCPCS) code
    • Loop 2300 CLM02 or Item 28
      • Enter $0.01 for the billed amount

This will allow the claim processing system to register the drug claim as being allowed which should allow the administration.

NOTE: Per the "incident to" guidelines explained above and in the CMS Internet-Only Manual (IOM) Publication 100-02, Chapter 15, Sections 50 and 50.3 (MBPM). Providers are NOT allowed to instruct their patients to purchase the drug themselves and then bring them to the provider's office for administration. If the drug is not supplied as a donation or free of charge, then the provider must provide the drug under incident to guidelines.



Coding Information

CPT/HCPCS Codes

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CPT/HCPCS Modifiers

Group 1

(1 Code)
Group 1 Paragraph

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Group 1 Codes
CodeDescription
JW DRUG AMOUNT DISCARDED/NOT ADMINISTERED TO ANY PATIENT

ICD-10-CM Codes that Support Medical Necessity

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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.

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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.

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Other Coding Information

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Revision History Information

Revision History DateRevision History NumberRevision History Explanation
04/28/2020 R3

This article was converted to a Billing and Coding article effective 04/28/2020. No other updates were made.

06/29/2018 R2

Added “and 48” to the Part A information for Loop 2300.

04/01/2018 R1

Changed the Title to Patients Supplied Donated or Free-of-Charge Drug and added Part A electronic and UB04 Form billing information and Part B electronic billing information.

Associated Documents

Related Local Coverage Documents
Articles
A52991 - (MCD Archive Site)
Related National Coverage Documents
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Statutory Requirements URLs
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Rules and Regulations URLs
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CMS Manual Explanations URLs
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Other URLs
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Public Versions
Updated On Effective Dates Status
09/03/2020 04/28/2020 - N/A Currently in Effect You are here
Some older versions have been archived. Please visit the MCD Archive Site to retrieve them.

Keywords

  • Donated
  • Drug
  • Supplied
  • Free-of-Charge