Compounded medications are covered under Medicare Part D. However, there are some restrictions that pharmacists need to be familiar with when billing a Part D plan for a compounded prescription drug.
The Centers for Medicare & Medicaid Services (CMS), the agency that runs Medicare, prohibits a pharmacist for billing a compounded product using a catch-all NDC code such as 99999999999 or 99999999992. So, in 2006, a pharmacist will typically need to bill the Part D plan for the most expensive component mixed in the compound, provided that medication is covered on the plan's formulary. Labor costs associated with mixing a compound are included in dispensing fees.
It is important to note that a pharmacist cannot bill a prescription drug plan (PDP) for an over-the-counter ingredient or a non-covered prescription drug product. However, the costs of those compounded products can be charged to the Medicare patient.
The above Medicare Rx Byte was excerpted from Medicare 2006: A Pharmacist's Reference Guide. Stay tuned to our Web site for more information on this upcoming publication.