Medicare Compliance & Reimbursement

What hospitals need to know when submitting claims for new drugs.

Good news for hospitals.

If you've been left out in the cold on reimbursement for yet-to-be coded drugs, things may finally be warming up at the Centers for Medicare & Medicaid Services.

Contractors that process hospital outpatient prospective payment claims got the nod from CMS May 28 to begin paying claims for new drugs that have Food and Drug Administration approval -- but no product-specific healthcare common procedure coding system billing code.

CMS says hospitals can now use new code C9399 (Unclassified drug or biological) for drugs not eligible for special OPPS pass-through payments. The new code's payment rate is 95 percent of the average wholesale price. Medicare will pay 80 percent of that rate, with beneficiaries filling in the remaining 20 percent.

For FDA-approved drugs that are eligible for pass-through status, CMS will assign a product-specific C-code and payment classification under the ambulatory payment classifications.

"With the authority granted us by the Medicare Modernization Act, we are closing the gap between FDA approval and Medicare payment for new drugs," said CMS administrator Mark McClellan.

July 6 is the deadline for CMS contractors to align their claims processing systems with the new instructions. After that, hospitals can submit bills retroactively to January 1, 2004.

Lesson Learned: Hospitals have the way cleared to get reimbursed for unclassified drugs and biologicals.