Billing and Coding: Patients Supplied Donated or Free-of-Charge Drug

Medicare covers outpatient drugs administered 'incident to' a physician service when the drug is not usually self-administered, is FDA-approved and reasonable/necessary, and is furnished and administered under the physician's personal supervision with the drug cost charged to the physician. Donated or free-of-charge drugs can be recognized for billing (to permit administration billing) only if the claim includes the HCPCS drug code, the 'Drug Donated' entry, required NOC descriptors when applicable, and a $0.01 billed amount in the specified Part A or Part B fields. Pharmacies cannot bill Part B for drugs furnished to physicians or dispensed directly to patients for later administration, and providers may not direct patients to buy drugs and bring them in for administration.

"Outpatient drugs furnished 'incident to' a physician's service are covered when the drug is not usually self-administered, is reasonable and necessary for diagnosis or treatment per accepted standa..."