Different parts of Medicare cover different services. For outpatient prescription drugs, Medicare has two distinct programs with a maze of complex policies. Most physicians along with Medicare patients, retail pharmacies, Medicare drug plans as well as Medicare Advantage health plans continuously struggle with navigating Medicare drug coverage under Part B and Part D. There are some basic areas of both plans that are necessary for everyone to understand, especially when it comes to coverage for rheumatologic drugs.
Explore this issueJanuary 2016
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Drug coverage applies under Medicare Part B under these basic situations:
- 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.