Pulmonology Coding Alert

Question: Our practice has billed nebulizer drug codes (i.e., J7618 and J7619) since the beginning of the year. At first, Medicare denied the claims, stating that Health Now should be billed for drugs. We then billed Health Now, and our practice received full reimbursement that only lasted for a short time. Health Now began denying the claims and informed us that they will not cover any claims for services completed in an office as the "place of service" because that is Medicare's jurisdiction. Since then, Medicare has told our practice that nebulizer treatment includes the cost of drugs. 

Should I be submitting a separate claim for nebulizer drugs and, if so, what carrier will accept these claims?

Virginia Subscriber

Answer: In order for a carrier to consider a drug for reimbursement as incident-to the physician's service, the physician must incur the drug cost, and the drug cannot be self-administered.

According to the Medicare Carriers Manual, the term "administered" refers only to the physical process by which the drug enters the patient's body. Administration does not refer to whether a medical professional supervised the process.

For example, the physician may observe a patient for side-effects of a drug, but this does not constitute administration.

Carriers include injectable (including intravenous) drugs under the incident-to benefit. Carriers consider other routes of administration such as oral drugs, suppositories, and topical medications as self-administered by the patient and, therefore, do not reimburse separately for these routes.

Since physicians do not necessarily administer inhalants, which can be self-administered by the patient or caregiver, Medicare does not consider inhalants separately reimbursable. In this case, the cost of the primary service includes the drug reimbursement.

For more information on this, refer to http://www.cms.hhs.gov/manuals/14_car/3b2049.asp#_2049_1.