Determining Drug Coverage for Original Medicare

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Determining Medicare Drug Coverage

While billing for Skilled Nursing Facilities (SNF) or for hospital billing, billers always make the mistake of considering the wrong Medicare drug coverage. For example, Medicare Part A and Part B generally do not cover outpatient prescription drugs, most of which are covered under Part D. In this article, we shared an excerpt from a CMS document, which will act as a basic tool to assist you in understanding Medicare drug coverage determinations under Part A, Part B and Part D of Medicare, and to clarify coverage for specific Part D products/drugs/categories. 

We also shared billing scenarios, which will help you to determine which part of Medicare covers a drug in a particular situation, assuming all other requirements are met, e.g., a drug must still be medically necessary to be covered. This information is applicable to people in the Original Medicare Plan. People who have a Medicare Advantage HMO or PPO Plan with prescription drug coverage get all their Medicare-covered health care from the plan, including prescription drugs.

Part A Hospital Insurance

People with Medicare who are inpatients of hospitals or skilled nursing facilities (SNF) during covered stays may receive drugs as part of their treatment. Medicare Part A payments made to hospitals and skilled nursing facilities generally cover all drugs provided during a stay. Under the Medicare hospice benefit, people receive drugs that are medically necessary for symptom control or pain relief. Part B can pay hospitals and SNFs for most categories of Part B-covered drugs if a person does not have Part A coverage, if Part A coverage for the stay has run out, or if a stay is not covered.

Part B Medical Insurance 

Medicare Part B covers a limited set of drugs. Medicare Part B covers injectable and infusible drugs that are not usually self-administered and that are furnished and administered as part of physician service. If the injection is usually self-administered (e.g., Imitrex) or is not furnished and administered as part of a physician’s service, it may not be covered by Part B. Medicare Part B also covers a limited number of other types of drugs as shown in the attached chart.1 (Regional differences in Part B drug coverage policies can occur in the absence of a national coverage decision.

Part D Prescription Drug Insurance

Part D-covered drugs are defined as drugs available only by prescription, used and sold in the United States, and used for a medically accepted indication; biological products; insulin; and vaccines. The definition also includes medical supplies associated with the injection of insulin (syringes, needles, alcohol swabs, and gauze). Certain drugs or classes of drugs, or their medical uses, are excluded by law from Part D coverage. While these drugs or uses are excluded from basic Part D coverage, drug plans may choose to include them as part of supplemental benefits, not covered by Medicare.