DEPARTMENT: Governmental Operations
Support
PAGE: 1 of 3
EFFECTIVE DATE: May 31, 2004
POLICY DESCRIPTION: BILLING –
Outpatient Self-Administered Drugs
REPLACES POLICY DATED: April 16,1999,
April 1, 2003
REFERENCE NUMBER: GOS.BILL.003
SCOPE: All Company-affiliated hospitals providing and/or billing outpatient self-administered
drugs.
PURPOSE: To outline billing requirements for outpatient self-administered drugs.
POLICY: Outpatient self-administered drugs are statutorily excluded from the Medicare
program and must not be billed as covered services. Outpatient self-administered drugs must be
billed to the patient or other third party payer.
DEFINITION:
Self-Administered Drug: A self-administered drug is a drug or biological furnished to a hospital
patient in an outpatient setting for therapeutic purposes which is usually self-administered and is
not integral to the performance of a treatment or procedure. A drug or biological which is integral
to the performance of a treatment or procedure is not considered “self-administered” and may be
covered by Medicare. Drugs and biologicals which are excluded from the self-administered drug
provision include blood clotting factors, drugs used for immunosuppresive therapy, EPO, certain
oral anti-cancer drugs and their associated antiemetics.
SPECIAL CONSIDERATIONS
Patient Notification of Non-Covered Services: Outpatient self-administered drugs are excluded
from Medicare coverage, therefore it is not appropriate to issue an Advance Beneficiary Notice
(ABN) prior to providing services. However, the hospital may provide notice in another form to
the patient in order to inform the patient of their financial responsibility.
PROCEDURE:
1. Facility personnel must determine if drugs provided to a patient in an outpatient setting which
are in a self-administrable form (i.e., pills, syrups, suppositories) are “self-administered”
according to the definition in this policy.
Examples of situations where drugs provided in an outpatient setting would be “selfadministered” include, but are not limited to:

Cases where drugs are given to a patient for their continued use at home after leaving the
hospital.

A patient who is undergoing surgery needs his or her daily insulin or hypertension
medication.
5/2004
DEPARTMENT: Governmental Operations
Support
PAGE: 2 of 3
EFFECTIVE DATE: May 31, 2004
POLICY DESCRIPTION: BILLING –
Outpatient Self-Administered Drugs
REPLACES POLICY DATED: April 16,1999,
April 1, 2003
REFERENCE NUMBER: GOS.BILL.003
Examples of situations where drugs provided in an outpatient setting would NOT be “selfadministered” include, but are not limited to:
 Sedatives administered to patients while they are in the preoperative area being prepared
for a procedure.
 Mydriatic drops instilled into the eye to dilate the pupils, anti-inflammatory drops,
antibiotic ointments, and ocular hypotensives that are administered to the patient
immediately before, during, or immediately following an ophthalmic procedure.
 Barium or low osmolar contrast media are supplies that are 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.
 Local anesthetics such as marcaine, lidocaine (with or without epinephrine).
 Antibiotic ointments such as bacitracin, placed on a wound or surgical incision at the
completion of a procedure.
 Statutory exclusions from the self-administered drug provision such as blood clotting
factors, drugs used for immunosuppressive therapy, EPO, certain oral anti-cancer drugs
and their associated antiemetics.
2. Facilities must review their chargemasters and billing procedures to confirm that selfadministered drugs are appropriately identified.
3. Drugs determined to be “self-administered” must not be billed as covered services to
Medicare. Self-administered drugs may be reported as non-covered with revenue code 259,
637 or other revenue code as instructed by the Medicare Fiscal Intermediary, HCPCS code
A9270 (Non-covered item or service) and modifier GY (Item or service statutorily excluded or
does not meet the definition of any Medicare benefit).
4. Self-administered drugs must be billed to the patient or other third party payer.
5. Drugs determined NOT to be “self-administered” should be billed to Medicare as covered
services with the appropriate revenue code, provided all other Medicare coverage requirements
have been met.
6. Drugs determined to be covered by the Medicare program must not be billed to the beneficiary.
7. Pharmacy and Business Office/Service Center personnel must educate all staff associates
responsible for ordering, charging, or billing pharmacy services on the contents of this policy.
5/2004
DEPARTMENT: Governmental Operations
Support
PAGE: 3 of 3
EFFECTIVE DATE: May 31, 2004
POLICY DESCRIPTION: BILLING –
Outpatient Self-Administered Drugs
REPLACES POLICY DATED: April 16,1999,
April 1, 2003
REFERENCE NUMBER: GOS.BILL.003
8. Business Office/Service Center personnel must identify intermediary interpretations which
vary from the interpretations in this policy. Specific documentation from the intermediary
related to the variance(s) must be obtained and provided to the Billing Help Line at 1-888-7353669, fax 615-344-6100.
The Facility Ethics and Compliance Committee is responsible for the implementation of this
policy within the facility.
REFERENCES:
§422, Self-Administered Drugs and Biologicals, Hospital Manual (CMS-Pub. 10)
§422.1, Self-Administered Drug Administered In An Emergency Situation, Hospital Manual
(CMS-Pub. 10)
§230.4, Outpatient Therapeutic Services, Hospital Manual (CMS-Pub. 10)
CMS Pub. 60A, Transmittal No. A-02-129, January 3, 2003 – 2003 Update of the Hospital
Outpatient Prospective Payment System (OPPS)
Transmittal 25, Pub. 100-04, Medicare Claims Processing Manual, October 31, 2003, Attachment
B (R25CP3.pdf)
5/2004