Page 58 - Medicare Benefit Policy Manual

• A laxative suppository for constipation while the patient waits to receive an
unrelated X-ray.

These two lists of examples may serve to guide hospitals in deciding which drugs are
supplies packaged as a part of a procedure, and thus may be billed under Part B.
Hospitals should follow CMS’ guidance for billing drugs that are packaged and paid as
supplies, reporting coded and uncoded drugs with their charges under the revenue code
associated with the cost center under which the hospital accumulates the costs for the
drugs.

50.3 - Incident To Requirements
(Rev. 1, 10-01-03)
B3-2049.3

In order to meet all the general requirements for coverage under the incident-to provision,
an FDA approved drug or biological must:

• Be of a form that is not usually self-administered;

• Must be furnished by a physician; and

• Must be administered by the physician, or by auxiliary personnel employed by the
physician and under the physician’s personal supervision.

The charge, if any, for the drug or biological must be included in the physician’s bill, and
the cost of the drug or biological must represent an expense to the physician. Drugs and
biologicals furnished by other health professionals may also meet these requirements.
(See §§170, 180, 190 and 200 for specific instructions.)

Whole blood is a biological, which cannot be self-administered and is covered when
furnished incident to a physician’s services. Payment may also be made for blood
fractions if all coverage requirements are satisfied and the blood deductible has been met.

50.4 - Reasonableness and Necessity
(Rev. 1, 10-01-03)
B3-2049.4

50.4.1 - Approved Use of Drug
(Rev. 1, 10-01-03)
B3-2049.4

Use of the drug or biological must be safe and effective and otherwise reasonable and
necessary. (See the Medicare Benefit Policy Manual, Chapter 16, “General Exclusions
from Coverage,” §20.) Drugs or biologicals approved for marketing by the Food and
Drug Administration (FDA) are considered safe and effective for purposes of this