Are Compounded Prescriptions Covered By Insurance?

There are no uniform answers when it comes to compounded pharmaceuticals and insurance. Some insurers may cover compound drugs the same way they cover mass-produced medications, while others may not cover them at all. Some companies make coverage decisions on a case-by-case basis.

Unfortunately, when it comes to insurance and compounded pharmaceuticals, there are no assurances.

Are compounded drugs covered by Medicare Part D?

Because compounded prescription medicine products as a whole do not meet the definition of a Part D drug, only expenditures connected with those components that fit the definition of a Part D drug are permissible costs under Part D.

Does United Healthcare cover compounded medications?

5/2020 Updated to allow coverage of a compound when the commercially available product is unavailable. Compounds for cosmetic usage will not be covered, it has been clarified.

Does Medicare pay for compounded medications?

Although some compounded pharmaceuticals may be covered by Medicare Part B, when the Food and Drug Administration concludes that a business is making compounded drugs in violation of the Federal Food, Drug, and Cosmetic Act, Medicare does not pay for them (the Act).

Does CVS compound medications?

Medicines that are made up of multiple ingredients Many medications are compounded by the CVS/caremark Mail Service; however, some medications are not compounded by CVS/caremark. These medications can only be bought through a Participating Retail Pharmacy or a compounding pharmacy.

Does Express Scripts cover compounded medications?

MEDICATIONS THAT HAVE BEEN COMPOUNDED They may, however, be taken if an FDA-approved, commercially accessible medicine fails to help you. Express Scripts examines all compounded drugs. Based on certain clinical criteria, some substances may not be covered. Any rejection of coverage is subject to an appeal.

What percent of prescriptions are compounded?

Compounding has become a more profitable sector as it has grown in popularity over the last two decades. Unfortunately, evidence-based estimates on the number of drugs compounded, the types of drugs compounded, the number of pharmacists and physicians who compound, and the size of the compounding business are difficult to come by (Glassgold, 2013). This paucity of information is most likely due to a lack of federal reporting standards and centralized data gathering, as well as varying insurance coverage for a wide range of compounded pharmaceuticals (NASEM, 2019). Compounding pharmacies under 503A are not required to report or publicly publicize the presence and/or scope of their compounding capabilities (e.g., nonsterile or sterile; small focus versus primary specialty). Despite the fact that outsourcing facilities are required to report their 6-month compounding totals to FDA, only about 70 have voluntarily registered and identified themselves as outsourcing facilities, and it is likely that other unregistered facilities exist and are operating in violation of Section 503A without proper oversight for the compounding they perform. 9 The consequent data scarcity complicates risk–benefit analysis and public health policy in the context of compounded medicinal preparations.

With this in mind, the National Council for Prescription Drug Programs estimates that more than 32,000 pharmacies around the country offer some compounding services (The Pew Charitable Trusts, 2016). According to the American Pharmacists Association, only about 7,500 of the approximately 56,000 community-based pharmacies in the United States specialize in compounding services, which means that pharmacists in those locations spend the majority of their time compounding special preparations for patients (American Pharmacists Association, 2019). According to the Alliance for Pharmacy Compounding, compounded medications account for 1 to 3% of all prescriptions written in the United States (APC, n.d.). In addition, a Letco Medical survey of over 4,000 pharmacy compounders in 2019 indicated that roughly 40% of those polled worked in pharmacies dedicated completely to compounding (APC, n.d.).

How do I bill Medicare for compounded drugs?

Units of medications or biologicals provided to patients must be appropriately recorded in terms of the dosage/units stated in the entire HCPCS code descriptor by hospitals and providers. It’s critical to read the entire long descriptors for the pertinent HCPCS codes before filing Medicare claims for pharmaceuticals or biologicals. Units should not be billed based on how the drug is packaged, priced, stored, or supplied by providers or hospitals.

  • Bundling and Unbundling of Services and Supplies in Chemotherapy and Nonchemotherapy

Audit Findings – OIG

The number of units billed with drug and biological charges is incorrectly coded, according to recent OIG audit results. Examples of HCPCS codes for pharmaceuticals and biologicals, as well as code definitions and unit information, are provided below to help with correct billing.

  • Example 1: The drug descriptor in the HCPCS is 10 mg. The patient is given 700 mg of medication; the billing unit is 70.
  • Example 2: The drug descriptor in the HCPCS is 5 mcg. The patient receives 5 mcgs of medication; 1 unit is billed.
  • Example 3: The medication description for HCPC is 25 mg. The patient is given 250 mg of medication; the number of units billed is ten.

The following were some of the other findings: Providers are reporting an inaccurate combination of units of service and HCPCS codes. For example, a provider treating prostate cancer billed 12 units of service for leuprolide acetate injections (HCPCS J1950, 3.75 milligrams per unit—-total 45 mg), which is indicated for the treatment of endometriosis, uterine leiomyoma, and malignant neoplasms of the breast; however, the provider should have billed 6 units of service for leuprolide acetate injections (HCPCS J9217

Lack of Supporting Documentation – There was no documentation given to show that a patient received the invoiced drug service.

HCPCS Codes That Aren’t Correct – Providers are using HCPCS codes that aren’t correct. For example, a practitioner billed Medicare for 200 units of bevacizumab (HCPCS code J9035), whereas the medicine actually delivered was azacitidine (HCPCS code J9025).

Non-covered Outpatient Drug Use – Providers bill Medicare for non-covered outpatient drug use. For example, a provider billed for a medicine (plerixafor) given during a tandem bone-marrow transplant to a beneficiary with multiple myeloma, despite the fact that Medicare does not consider the treatment (tandem bone marrow transplant) to be reasonable and necessary. Drugs administered for services that are not deemed reasonable and essential are not covered by Medicare.

For accurate claim processing, proper coding and billing of claims are required. Underpayments or overpayments due to incorrect billing and paperwork may result in recoupment and/or investigation.

Biosimilars Coverage

The usage of biosimilars for FDA-approved medications has risen in recent years. Unless an article to the contrary is published, Noridian will accept a biosimilar drug based on the same criteria as the drug to which it is a biosimilar. Any FDA restrictions that do not apply to the original medicine apply to these biosimilars as well.

Compounded Drugs Billing

When the usage of compounded pharmaceuticals manufactured by a pharmacist in conformity with the Federal Food, Drug, and Cosmetic Act and the FDA Modernization Act of 1997 meets all other criteria for services incident to a physician’s service, they may be reimbursed by Medicare. There is no National Drug Code for compounded medications (NDC).

When two or more pre-packaged medications are mixed in the same syringe according to label directions, it is not considered a compounded drug.

Compounded medications are utilized to fulfill a patient’s unique requirements. The following are just a few examples of when a compounded medicine might be used:

  • Patient is allergic to an inactive component in a commercially available medicine, thus a molecule is created without it.
  • When made according to label instructions, the appropriate dosage strength is not available. (For medications that require reconstitution, this refers to the time after the drug has been reconstituted according to the label instructions.) Compounding may be required for a medicine used in an infusion pump or reservoir, for example.

Specific HCPCS J-codes cannot be utilized because compounded drugs do not have an NDC. Instead, bill J3490 (unclassified pharmaceuticals), J3590 (unclassified biologics), J7999 (compound drug, not oral), or J9999 (Not Otherwise Classified (NOC), antineoplastic medication).

The information must be entered into item 19 of the CMS-1500 paper claim form or the electronic equivalent when invoicing for a compounded medicine. Providers should state whether or not the drug is compounded, as well as the drug name and total dosage for each drug.

Outpatient Drugs Administration Orders

Outpatient drug coverage necessitates paperwork proving that the physician’s services were properly authenticated or planned. While a formal physician order is not required, the physician must clearly establish his or her purpose to perform the service or test in the medical record. Orders are a kind of communication that requests the completion of services and can be signed by:

  • Nurse Practitioners (NP) and Physician Assistants (PA) are examples of non-physician practitioners (NPP) (PA)

A Doctor of Pharmacy (Pharm D) is not a CMS-approved provider and hence cannot write Medicare instructions. Pharm Ds may perform duties within the scope of their state licensure, however they are not considered authorized CMS billing providers. As a result, any orders written or transcribed by a Pharm D must be cosigned by one of the above-mentioned recognized providers.

It is critical for providers to present all relevant paperwork to establish the medical necessity of services rendered and to validate services as billed.

For further information on signature requirements, visit the Medicare Documentation Guidelines webpage.

Radium 223 (Xofigo) Invoice Required

For payment of Radium 223 by Noridian, the invoice price must be submitted (Xofigo). When invoicing from the Medicare Physician Fee Schedule (MPFS) on a CMS-1500 Claim Form or electronic equivalent, this radiopharmaceutical should be coded with A9606. Enter the number of units indicating the dose administered in microcuries in the Quantity Billed column (one unit equals one microcurie).

In Item 19 of the CMS-1500 Claim Form or the electronic equivalent, providers must indicate the name of the radiopharmaceutical as well as the invoice price for one microcurie. Claims that lack these information will be rejected as ineligible.

The invoice price is the amount paid for the drug by the physician’s office, as shown on the invoice for the exact drug used for this patient.

Fees for radiopharmaceuticals billed through the MPFS are calculated using the methodology employed by the contractor prior to November 2003 (for contractor instructions, see CMS Internet Only Manual (IOM), Publication 100-04, Chapter 17, Section 20.1.3). Noridian employs invoice pricing for this radiopharmaceutical based on that instruction. Contractors who utilize different pricing methodologies may use the CMS’s Average Wholesale Price (AWP).

Unclassified Drug Billing When Submitting EMC

When submitting an unclassified medicine EMC (Electronic Media Claim), simply include the required information in loop 2400/SV101-7 for faster and cleaner claim processing.

Unfortunately, entering data in both the SV101-7 and Loop 2300 NTE segments, as well as supplying extra data, slows down processing and can lead to inaccurate dose calculations or denials.


  • Chapter 17, Section 20.1.3, and Section 70 of CMS IOM Publication 100-04, Medicare Claims Processing Manual
  • Chapter 15, Section 50, CMS IOM Publication 100-02, Medicare Benefit Policy Manual
  • Chapter 1, Part 4, Section 280.14, CMS IOM Publication 100-03, Medicare National Coverage Determination (NCD) Manual

Which medication would not be covered under Medicare Part D?

Drugs to cure physical wasting caused by AIDS, cancer, or other disorders may be covered.

  • Note: Psoriasis, acne, rosacea, and vitiligo medications are not considered cosmetic pharmaceuticals and may be covered under Part D.
  • Prescription
  • A prescription is a written order from a competent health care provider for a health care service or medicine.”>

Is OptumRx part of UnitedHealthcare?

UnitedHealth Group has two subsidiaries: OptumRx and BriovaRx. The dimensional U logo and UnitedHealthcare are trademarks of UnitedHealth Group Incorporated. The proprietors of all other trademarks are solely responsible for them. Coverage under a UnitedHealthcare health plan supplied by or via a UnitedHealthcare company.