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June 27, 2002

NEW GUIDANCE ON MEDICARE COVERAGE FOR INJECTABLE DRUGS

The Centers for Medicare & Medicaid Services (CMS) recently announced new guidance for Medicare contractors (vendors who process Medicare claims) to use in determining whether a particular injectable drug may be covered by Medicare. To see the guidance, Program Memorandum AB-02-72, click here

Background

Medicare provides limited benefits for outpatient prescription drugs. Specifically, it covers drugs that are furnished "incident to" a physician's service, as long as the drugs are "not usually self-administered by the patients who take them." Determining which medications are likely to be self-injected and which medications are likely to be injected by a health care professional has been a point of controversy.

Summary of the New Guidance

The guidance states that "usually" means more than 50 percent of the time for all Medicare beneficiaries who use the drug. Because it may be difficult to determine whether the 50 percent standard is met, CMS issued the following coverage guidance.

  • Absent evidence to the contrary, drugs delivered intravenously should be presumed to be not usually self-administered by the patient.
  • Absent evidence to the contrary, drugs delivered by intramuscular injection should be presumed to be not usually self-administered by the patient. (For example, Avonex -- a drug to treat multiple sclerosis -- is delivered by intramuscular injection, commonly once a week, and is not usually self-administered by the patient.) Medicare may consider the nature of the particular intramuscular injection in applying this presumption. In applying this presumption, Medicare will examine the use of the particular drug and consider whether the condition is acute (for which self-administration is less likely) and how often the injection is given.
  • Absent evidence to the contrary, drugs delivered by subcutaneous injection should be presumed to be self-administered by the patient.
Effective Date

The guidance is effective August 1, 2002.

Implications

Sponsors of self-funded health plans that cover injectable drugs may find the guidance helpful in determining which injectables should be covered. In addition, third party administrators may find this guidance helpful when administering benefits.

Plan sponsors may begin to feel pressure from participants and their physicians who want coverage for certain drugs previously not covered by the plan. Consequently, plan sponsors may want to review their current plan document/summary plan description to evaluate how their current document addresses coverage or exclusion of injectables. If the plan contracts with a pharmacy benefit management (PBM) company, the plan sponsor may wish to revisit coverage/exclusion edits in the PBM's computer system to assure that drug benefits are being administered consistent with plan language. Additionally the plan sponsor may wish to route the information about CMS coverage guidance, outlined in this memo, to the organization(s) who is reviewing injectables on behalf of the plan.

 

Capital Checkup is for informational purposes only. It is not intended to provide guidance on current laws or pending legislation. On all issues involving the interpretation or application of laws and regulations, plan sponsors should rely on their attorneys for legal advice.

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