Drug coverage applies under Medicare Part B under these basic situations:
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Explore This IssueJanuary 2016
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- Drugs billed by physicians and provided incident to physician service for that patient (e.g., chemotherapy drugs);
- Drugs billed by pharmacy suppliers and administered through durable medical equipment (DME) benefit (e.g., respiratory drugs given via nebulizer); and
- Some drugs billed by pharmacy suppliers and self-administered by the patient (e.g., immunosuppressive drugs, some oral anti-cancer drugs).
For Medicare Part B drug coverage in physician offices, the following guidelines should be applied:
- Must be furnished incident to a physician service. Normally, this means the drug is prescribed and dispensed by the physician or the physician prescribed and administered the drug during a patient office visit.
- Medicare Part B drug coverage is usually limited to drugs or biologicals administered by injection or infusion.
- 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.
Medicare uses a mix of local and national coverage decisions to list all the drug coverage for their beneficiaries. Therefore, 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”). Due to this, there are regional differences where a specific drug could be covered in one state and not another.
Although Medicare drug plan formularies are subject to CMS review during the annual bidding process, the Medicare Modernization Act (MMA) gives Medicare prescription drug plans (PDPs and MA-PDs) wide latitude. Currently, there is no national drug formulary or mandated formulary, so most Medicare drug plans use a similar drug formulary list like most commercial plans.
As for Medicare Part D, this addition to the Medicare alphabet soup is optional and helps beneficiaries enrolled in traditional Medicare (Parts A and B) and most Medicare Advantage plans with paying for prescription drugs. Part D plans are:
- Offered by private insurance companies that are approved by Medicare and individuals will have to sign up directly with the private insurer;
- Enrollees pay a monthly premium and are sometimes subjected to a deductible and/or copayment for their drugs; and
- Each plan varies in the cost of premiums, the price of drugs and its list of covered drugs or “formulary” under their plan.
For certain prescription drugs, there are additional coverage or limit requirements that may be in place. One key issue that has faced many rheumatology practices and patients under the Medicare Part D plan is requiring prior authorizations on all prescriptions for methotrexate. It is important to know that when methotrexate is used as a chemotherapeutic drug it is covered by Part B, but when it is used as an oral agent for rheumatoid arthritis it is covered by Part D. Early in the evolution of Part D, CMS suggested that when rheumatologists write a prescription for oral methotrexate they write the words “Part D drug” on the prescription as documentation for the Part D plan. In this case, the plan is requiring a prior authorization to document that the prescription is in fact for Part D use.