As promised in its final rule for Outpatient PPS for CY '03 (published in the November 1, 2002 Federal Register), CMS has published further guidance in Transmittal A-02-129, dated January 3, 2003, on its new coverage policy for certain self-administered drugs furnished in the hospital outpatient department ("HOPD"). Heretofore, a simple rule was in force: self-administered drugs were not covered. Consequently, the beneficiary was liable out-of-pocket for those expenses. The preamble to the November 1 final rule, however, indicated that there may be times when a self-administered drug might be considered a "supply" instead (and hence, a covered item). The drug would not be separately billable to the program, because it would be "packaged" into the APC. The hospital, however, could not now bill the beneficiary because it is a covered item. The preamble attempted to draw a distinction between whether or not a drug is "integral to a procedure or treatment and is required to be provided to a patient in order for a hospital to perform the procedure." To do so, it gave three examples of drugs that do not meet the test and no examples of those that do. A drug would be deemed to meet the test if can be characterized as: (1) a drug given to a patient for continued use at home; (2) headache medication given to chemotherapy patients, and (3) daily insulin or hypertension medication to a patient about to undergo surgery. In its recent transmittal, CMS provided examples of what drugs are considered "integral" to a procedure, and therefore packaged, including: (a) sedatives administered to patients while they are in the preoperative area being prepared for a procedure; (b) barium or low osmolar contrast media used during a diagnostic imaging procedure; and (c) antibiotic ointments such as bacitracin, placed on a wound or surgical incision at the completion of a procedure.
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