On December 15, 2011, the Centers for Medicare and Medicaid Services (CMS) issued news for Medicare Part B Providers to reflect Change Request (CR) 7397 – which clarifies policy with respect to restrictions on pharmacy billing for drugs provided “incident to” a physician service.


  • Pharmacies, Suppliers and Providers may not bill Medicare Part B for drugs dispensed directly to a beneficiary for administration “incident to” a physician service, such as refilling an implanted drug pump. These claims must be denied. (See Medicare Claims Processing Manual, Publication 100-04, Chapter 17, section 50.B and Medicare Benefit Policy Manual, Publication 100-02, Chapter 15, sections 50.3.)


  • Pharmacies may not bill Medicare Part B for drugs furnished to a physician for administration to a Medicare beneficiary. When these drugs are administered in the physician’s office to a beneficiary, the only way these drugs can be billed to Medicare is if the physician purchases the drugs from the pharmacy. In this case, the drugs are being administered “incident to” a physician’s service and pharmacies may not bill Medicare Part B under the “incident to” provision. (See Medicare Benefit Policy Manual, Publication 100-02, Chapter 15, sections 50.3 and 60.1.)


Anticipating these changes, many practices across the country have taken steps toward developing efficient reimbursement policies and procedures. Due to the various, albeit subtle, differences seen across regional carriers, this development has been more difficult for some than for others.

Hartley Medical understands many of the challenges involved with reimbursement. As one of the nation’s leading compounding pharmacies, let us be a resource to you and your staff. We offer reimbursement guidance, and can refer you to a reimbursement specialist within your specific region.

So, if your sterile compounding pharmacy is billing Medicare, and you are looking to submit your own billing as a proactive solution to this issue, please contact us. We are happy to help make this transition as smooth as possible.

For more information, call 888.671.2888, or e-mail questions@hartleymedical.com. Or visit Hartley Medical’s Knowledge Center by clicking here.

To read the CMS’s full Change Request, click here. For more information on reimbursement for intrathecal medications, visit our blog entry entitled, “Difficult Reimbursement Conditions.”