Anesthesia Coding Alert

Question: Every time I think we’ve figured out how to bill for pain pump refill medications, we start getting denials. The latest denial I received was from Medicare and it said we billed incorrectly for compound drugs. I submitted J3490-KD for a combination of fentanyl citrate powder (8 mg), bupivicaine (200 mg), sodium chloride (40 ml), and sterile water (20 ml). What did I do wrong?

Ohio Subscriber

Answer: You should be reporting HCPCS Level II code J7999 (Compounded drug, not otherwise classified) instead of J3490 (Unclassified drugs) with modifier KD (Drug or biological infused through DME).

Here’s why: Since compounded medications do not have a National Drug Code (NDC) number, you cannot report them with specific HCPCS Level II J codes. Instead, you should choose the most appropriate code from several non-specific options:

• J3490 (Unclassified drugs)
• J3590 (Unclassified biologics)
• J7999 (Compounded drug, not otherwise specified)
• J9999 (Not otherwise classified, antineoplastic drugs)

Important: Mixing two or more pre-packaged products in the same syringe according to label instructions does not meet the definition of a compounded drug. A pharmacist must create compounded drugs in accordance with the Federal Food, Drug, and Cosmetic Act and the FDA Modernization Act of 1997.

Compounded drugs are used to meet the special needs of a patient. For example, a patient might be allergic to an inactive ingredient in an off-the-shelf drug so a compound omitting that ingredient is made. Compounded drugs might also be created when the dosage strength required is not available when preparing the drug according to the label’s instructions.

When billing for a compounded drug, submit JXXXX for one unit of service; verbiage to indicate a compounded drug; the drug name(s) and dosage(s) used; and the route of administration if multiple routes are used.