Page 57 - Medicare Benefit Policy Manual

In certain circumstances, Medicare pays for drugs that may be considered usually self-
administered by the patient when such drugs function as supplies. This is the case when
the drugs provided are an integral component of a procedure or are directly related to it,
i.e., when they facilitate the performance of or recovery from a particular procedure.
Except for the applicable copayment, hospitals may not bill beneficiaries for these types
of drugs because their costs, as supplies, are packaged into the payment for the procedure
with which they are used. Listed below are examples of when drugs are treated as
supplies and hospitals should bill Medicare for the drug as a supply and should not
separately bill the beneficiary.

• Sedatives administered to a patient while he or she is in the preoperative area
being prepared for a procedure.

• Mydriatic drops instilled into the eye to dilate the pupils, anti-inflammatory drops,
antibiotic drops/ointments, and ocular hypotensives that are administered to a
patient immediately before, during, or immediately following an ophthalmic
procedure. This does not refer to the patient’s eye drops that the patient uses pre-
and postoperatively.

• Barium or low osmolar contrast media provided integral to a diagnostic imaging
procedure.

• Topical solution used with photodynamic therapy furnished at the hospital to treat
nonhyperkeratotic actinic keratosis lesions of the face or scalp.

• Antibiotic ointments such as bacitracin, placed on a wound or surgical incision at
the completion of a procedure.

The following are examples of when a drug is not directly related or integral to a
procedure, and does not facilitate the performance of or recovery from a procedure.
Therefore the drug is not considered a packaged supply. In many of these cases the drug
itself is the treatment instead of being integral or directly related to the procedure, or
facilitating the performance of or recovery from a particular procedure.

• Drugs given to a patient for his or her continued use at home after leaving the
hospital.

• Oral pain medication given to an outpatient who develops a headache while
receiving chemotherapy administration treatment.

• Daily routine insulin or hypertension medication given preoperatively to a patient.

• A fentanyl patch or oral pain medication such as hydrocodone, given to an
outpatient presenting with pain.