HIPAA: HIPAA Implementation Update - Compound Drugs Claim Submission Guidelines
Effective for dates of service on or after September 22, 2003, Pharmacy providers may submit claims for compound drugs (for both traditional pharmacy compounded items, such as creams and ointments, and for home infusion compounds) using one of the following new methods:
- The real-time Point of Service (POS) network using the National Council for Prescription Drug Programs (NCPDP), Version 5.1 standard, and the pharmacy computer's software
- The Real-Time Internet Pharmacy (RTIP) application, using the pharmacy computer and Internet browser
- The new paper Compound Pharmacy Claim Form (30-4)
Some of the changes associated with the new billing methods for compounds are as follows:
- Medi-Cal requires that all of the compound drug ingredients be listed on the claim. Providers will be given a "process for approved ingredients" option when submitting compound pharmacy claims. This will allow a claim to be processed when there are non-Medi-Cal covered or unapproved ingredients listed on the compound claim. Any non-covered or unapproved ingredient will be ignored and reimbursed at zero. For example, if a compound contains an inexpensive ingredient that requires prior authorization, a provider may opt to have the claim processed for approved ingredients only, rather than submit a Treatment Authorization Request (TAR), which might delay reimbursement.
- The quantity indicated for each ingredient must be documented as the total quantity dispensed regardless of the number of containers. For example, if the quantity of an ingredient in each container is 0.3 Gm and 5 containers are dispensed, the quantity entered on the claim form should be 1.5 Gm (0.3 Gm x 5 = 1.5 Gm). This is a major change from the previous rules, but is required by the NCPDP 5.1 standard.
- Ingredients that do not have an associated National Drug Code (NDC) must be billed using the new paper Compound Pharmacy Claim Form (30-4) and include an attached invoice reflecting pricing information for the ingredients.
- For dates of service on or after October 1, 2003, medical supplies and the empty containers used to prepare the compounds cannot be billed on the new form and will not be reimbursed as ingredients using either the current or new compound billing method. The Department of Health Care Services (DHS) is currently assessing the best way to reimburse providers for supplies and containers. DHS will notify providers of the new reimbursement procedures prior to October 1.
The new paper Compound Pharmacy Claim Form (30-4) and specific billing instructions will be released in an upcoming Medi-Cal Update. Processing of compounds using the current method will be discontinued in the near future.
If providers are already approved for Telecommunications Standard NCPDP 5.1 claim submission, no additional testing is required to submit compound claims online. If providers are not approved for NCPDP 5.1 claim submission, they must complete the current NCPDP 5.1 certification process prior to submitting compound claims online. Draft specifications for the NCPDP 5.1 standard are on the HIPAA ASC X12N and NCPDP Technical Specifications Web page.
RTIP claim transactions require a completed Medi-Cal Point of Service (POS) Network/Internet Agreement. Providers can contact the POS/Internet Help Desk at 1-800-427-1295 to request an agreement. Completed agreements should be sent to:
Attn: POS/Internet Help Desk
EDS
3215 Prospect Park Drive
Rancho Cordova, CA 95670-6017
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