Health Information Management

Defining 'integral' for self-administered drugs is challenging

JustCoding News: Outpatient, February 22, 2012


Self-administered drugs present a significant issue for coders, especially when considering how they may or may not be covered by Medicare Part B. In many instances, payers may consider a drug to be self-administered in some circumstances but not in others. As a result, coders must pay special attention to how these drugs are used within their setting.

"Although it sounds like these drugs should be categorized by the FDA, it's actually your local FI/MAC [fiscal intermediary/Medicare administrative contractor] that makes the determination as to whether a drug is or is not self-administered," said Kimberly Anderwood Hoy, JD, CPC, director of Medicare and compliance for at HCPro, Inc., in Danvers, MA. "They post not only the process used to make the determination, but also a list of drugs that are to be considered self-administered."

According to Hoy, who spoke during HCPro's October 11 audio conference, "Self-Administered Drugs: Master Billing Complexities and Avoid Compliance Pitfalls," Medicare pays for drugs and biologicals under Part B for hospital outpatients if the drugs are:

  • Incident to a physician's service and not usually self-administered
  • Required in the performance of diagnostic services, even if self-administered
  • Self-administered, but covered by statute
  • Self-administered, but are so integral to a procedure or treatment it could not be performed without them

What is considered integral
The last point relating to the idea of integral to a procedure creates the greatest number of problems for coders. Whether a drug is considered integral to a procedure might depend on your definition of integral, said Hoy. Does your facility define integral to mean for this particular patient or does it define integral to mean for every patient? CMS, MACs, FIs, and commercial payers have conflicting guidelines. As a result, integral can be defined in conflicting ways.

In 2002, CMS provided some specific guidelines for understanding which self-administered drugs are considered integral to the procedure. Transmittal A-02-129 states, "Certain drugs are so integral to a treatment or procedure that the treatment or procedure could not be performed without them." The transmittal cited the following examples of drugs that are integral to being able to perform the procedure:

  • Sedatives administered to patients in the operative prep area
  • Mydriatic drops instilled into the eye to dilate the pupils, anti-inflammatory drops, antibiotic ointments, and ocular hypotensives that are administered to a patient immediately before, during, or immediately following an ophthalmic procedure
  • Barium or low-osmolar contrast media used for diagnostic imaging procedures
  • Topical solutions for photodynamic therapy, local anesthetics, and antibiotic ointments

In 2011, CMS indicated that the coverage policy for self-administered drugs is very limited and does not cover the majority of self-administered drugs. This seems to indicate that regardless of an individual patient's needs, the procedure dictates whether a drug is considered self-administered, Hoy said.

Check with your local FI/MAC for further clarification if you commonly encounter situations similar to the examples provided.

Coders and billers should also review the Federal Register for further guidance on how to define integral. According to 67 FR 66767:

A drug would be treated as a packaged supply in cases where … it is directly related and integral to a procedure or treatment and is required to be provided to a patient in order for a hospital to perform the procedure or treatment during a hospital outpatient encounter.

This guidance seems to indicate the individual patient's needs define integral, rather than the procedure.

In Medicare's brochure "How Medicare Covers Self-Administered Drugs Given in Hospital Outpatient Setting," CMS tells beneficiaries, "Part B generally doesn't pay for self-administered drugs unless they are required for the hospital outpatient services you're getting." This language seems to indicate that self-administered drug coverage is patient-specific, not procedure-specific.

Additionally, American Hospital Association (AHA) Coding Clinics provide additional coding guidance in this area. Coding Clinic, Fourth Quarter 2007, states that drug administration services "specific to the patient," although not part of the "regular routine" for a procedure, are integral and not reported if due to the procedure. This would seem to indicate that the particular patient in question dictates whether the drugs are billable, rather than the procedure itself, said Hoy. However, as coverage should be established before applying coding guidance, it's unclear whether this rationale can justify billing Medicare.

What is not considered integral
While CMS has not published guidance specifying what does count as integral to a procedure, Hoy noted clear definitions exist dictating what does not constitute integral to a procedure. According to 67 FR 66767 and Transmittal A-02-129, drugs that are not directly related and integral or packaged supplies are:

  • Drugs given to a patient for his or her continued use at home. One example of this would be starting a patient on an oral antibiotic in the ED, then providing a prescription for continuing doses.
  • Drugs related to the procedure or treatment. An example of this would be supplying a patient with aspirin for a headache while the patient receives chemotherapy treatment.
  • Drugs the patient normally takes at home-for example, a daily supply of insulin or hypertension medication for a patient undergoing outpatient surgery.

In this case, it appears that integral relates to a particular patient, Hoy said. In the chemotherapy example, the patient needs aspirin for a headache and not because of the chemotherapy treatment.

Therefore, CMS appears to be looking at the individual patient, rather than the procedure.
This contrasts with how intermediaries determine whether a drug is self-administered. These payers take into account every patient rather than individual patients' circumstances. The FI or MAC determines whether 50% of the beneficiary population can self-administer a given drug. If so, the FI or MAC considers the drug to be self-administered even if a particular patient cannot self-administer it. This may not be the best comparison because it only takes into account the drug itself and not procedures, Hoy said.

With all the confusion surrounding what defines integral, Hoy emphasizes the importance of hospital guidelines. "You have to decide, based on the information that's out there, what you do find most convincing and develop a policy with applicable guidelines that you found to be convincing," said Hoy. "This may include seeking guidance from your FI/MAC as they may be able to provide you with additional guidance."

Because of the level of confusion surrounding this issue, Hoy advised staying tuned on a national level for further clarification.

Create custom notices for patients
Hoy recommended facilities develop custom notices to patients explaining their self-administered drug policy so patients are aware that they may be responsible for any noncovered drugs.

"What I like about doing your own notice is that you can tailor it to make it similar to an [advance beneficiary notice] ABN or very different from an ABN. But you have more control about putting specific information about the drug benefit issues rather than having it be very generic," said Hoy. This includes listing the names of specific drugs the patient will have to pay for out of pocket.

Individual facilities may voluntarily provide the patient an ABN, but Hoy recommended ensuring that the billing department is familiar with the use of voluntary ABNs. The billing office needs to know it can still bill the patient. "Not providing the voluntary ABN does not affect the patient's liability for the drug," said Hoy.

Coding for self-administered drugs
Valerie Rinkle, MPA,
revenue cycle director for Asante Health System in Medford, OR, and Hoy's cospeaker during the audio congerence, outlined several ways in which coders can code for self-administered drugs based on how their facility interprets integral in the above guidelines.

"Once you make a determination that the drug is integral to the procedure and you choose to bill it as a covered drug, you want to choose one of the appropriate revenue codes [0250, 0343, 0636]," said Rinkle. "You have the option if you bill 0636 or 0343 to include the specific HCPCS code."

If facilities choose to report the HCPCS code with revenue code 0250, they must remember that many carriers do not read the HCPCS code if billed with 0250, said Rinkle. "If you really want them to see the HCPCS code-and there are a lot in the OPPS system where you want them to read the code-you might want to choose the other revenue codes for reporting the drugs," she said.

Coders should be sure to report the most specific HCPCS code possible, Rinkle added. If no specific HCPCS code is available, report the generic HCPCS code. These charges will appear in the covered column of the UB-04.

If a facility determines that a specific self-administered drug is not covered, it should bill the drug with revenue code 0637. Rinkle said that the HCPCS code specific to the drug may be used if one exists.
"If not, you would use A9270 to identify this as a noncovered item or service. If you bill without a HCPCS code notice, then the OCE bypasses the edits requiring a code, but your MAC might not treat it the same way," said Rinkle. As a result, coders and billers need to understand the specific MAC requirements. This charge would be reflected in the noncovered column of the UB-04.

Modifier -GY
Coders and billers should append modifier -GY (item or service statutorily excluded or does not meet the definition of Medicare benefits) when billing for noncovered drugs.

One of the most important reasons to include modifier -GY is that it triggers an explanation of benefits to be sent to the beneficiary. This explains to them that they will be liable for the drugs, said Rinkle. If coders leave modifier -GY off the claim, this explanation of benefits will not be sent to the beneficiary.

Understanding self-administered drugs and how they may be billed represents a significant issue in the revenue cycle department. Hoy and Rinkle agreed that further guidance on a national level would be helpful in clarifying the guidelines.

As it stands, when individual MACs and hospitals develop their own policies and guidelines, it leads to inconsistent billing practices across regions. As a result, beneficiaries in one region are paying more than beneficiaries in another. Uniform guidelines on a national level could help eliminate these discrepancies. For the time being, however, Hoy and Rinkle stressed that each hospital should review its own policies and update them as necessary based on the available guidelines.

Editor’s note: This article was originally published in the February issue of Briefings on APCs. E-mail your questions to Senior Managing Editor Michelle A. Leppert, CPC-A, at


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