by Jared Staheli
July 9th, 2015
Section 621(a) of the MMA amends Section 1833(t) of the Social Security Act by adding paragraph (15), Payment for New Drugs and Biologicals Until HCPCS Code Assigned. Under this provision, payment for an outpatient drug or biological that is furnished as part of covered outpatient department services for which a product-specific HCPCS code has not been assigned shall be paid an amount equal to 95 percent of average wholesale price (AWP). This provision applies only to payments under the hospital outpatient prospective payment system (OPPS).
Beginning January 1, 2004, hospital outpatient departments may bill for new drugs and biologicals that are approved by the FDA on or after January 1, 2004, for which a product-specific HCPCS code has not been assigned. Beginning on or after the date of FDA approval, hospitals may bill for the drug or biological using HCPCS code C9399, Unclassified drug or biological.
Hospitals report in the ASC X12 837 institutional claim format in specific locations, or in the “Remarks” section of Form CMS-1450):
• the National Drug Code (NDC),
• the quantity of the drug that was administered, expressed in the unit of measure applicable to the drug or biological, and
• the date the drug was furnished to the beneficiary.
Contractors shall manually price the drug or biological at 95 percent of AWP. They shall pay hospitals 80 percent of the calculated price and shall bill beneficiaries 20 percent of the calculated price, after the deductible is met. Drugs and biologicals that are manually priced at 95 percent of AWP are not eligible for outlier payment.
HCPCS code C9399 is only to be reported for new drugs and biologicals that are approved by FDA on or after January 1, 2004, for which there is no HCPCS code that describes the drug.