Tuesday, December 8, 2015


J7799 NOC drugs, other than inhalation, administered through DME

Coverage Article: Compounded Drugs Used in an Implantable Infusion Pump

Compounded drugs are drugs not reconstituted as labeled in order to create a combination of drugs or vary the concentration/volume. As such, compounded medications do not have a National Drug Code (NDC) number, an average sales price (ASP) or an average wholesale price (AWP).

The new compounded drug code, Q9977 - Compounded Drug, Not Otherwise Classified, is not a replacement for existing codes. It is intended to distinguish compounded drugs (which may include biologicals) from other “not otherwise classified” codes such as J3490, J3590, J7799, J9999 and existing specific codes for compounded nebulized drugs.

Compounded drugs are contractor priced.

The use of compounded drugs has been especially prevalent in the filling of implantable infusion pumps. The following methods are appropriate when billing for drugs used in implantable infusion pumps:

1. When submitting a claim for compounded drug(s) for a single agent or a combination of agents, providers must use NOC HCPCS code J7799KD. Even though the compound is similar to or includes a drug with a specific HCPCS code (e.g. HCPCS code J2275 for preservative free morphine), providers must use HCPCS code J7799KD (unclassified drug) for reimbursement of the compounded drug. The KD modifier must be appended to indicate the drug will be administered through a DME.
2. When a non-compounded drug is used (a true ‘off –the –shelf’ product without compounding), the specific HCPCS code for the drug may be used (see examples below). Payment for these drugs is reimbursed differently and is not subject to the fee schedule below.

Note: Any drug, compounded or non-compounded, that is administered through an infusion pump must be reported with the KD modifier.

Medicare will consider implantable infusion pumps and associated services (such as the drugs discussed here) medically reasonable and necessary for the conditions listed in the Medicare National Coverage Determination Manual Pub.100-03, Chapter 1, Section, 280.14.

This article does not define the medical necessity for use of these drugs but directs the proper billing. Refer to the applicable Local Coverage Determination (LCD), Implantable Infusion Pump, for coverage indications and medical necessity information.

Please Note: HCPCS code J7799 has a status indicator of N in Part A, bundled no separate payment.

The billing guidance in this Article is specific to Part B.

Coding Guidelines:

1. When billing for compounded drugs, report HCPCS code J7799 with the KD modifier on a single claim line.

2. Place quantity = ‘1’ on the line billed for J7799KD.

3. Enter the name and total dose (in mg or mcg) of each drug of the refill in Box 19 of the CMS 1500 or the appropriate comment loop of electronic claims (see examples below).

4. Covered compounded single or combination drugs should be billed on a single detail line with the exceptions noted below in the examples.

5. The ICD-9-CM code used on each detailed line must represent the condition treated by the drug(s) billed on that detail line.

6. Drug doses used in narrative description must be in mgs or mcgs only. Do not report ugs.
Billing examples of drugs for implanted infusion pumps:

Non-compounded Baclofen
Non-compounded Baclofen (J0475KD) is routinely used as a single drug therapy for spasticity. It is not routinely used with other intrathecal combinations for pain management. Medicare does not provide reimbursement for non-compounded baclofen combined with any other intrathecal drugs.
As baclofen is indicated for use in the treatment of spasticity, refer to the list of covered diagnoses in the associated LCD, Implantable Infusion Pumps.

Compounded Baclofen

Baclofen (J7799KD) and pain management drugs do not have the same coverage requirements. Baclofen is indicated for use in the treatment of spasticity. The list of covered diagnoses is part of the associated LCD as noted above. Pain management drugs and baclofen may have different diagnoses based on the LCD coverage.

The compounded Baclofen is reported on a separate line item from the pain management drug in the compounded mixture. Report separately, as indicated in the examples below.

Example of compounded mixture: Morphine 20mg/ Bupivacaine 6mg/ Baclofen 4000mcg:
Report Baclofen 4000mcg (J7799KD) on one claim line, and report Morphine20mg/Bupivacaine 6 mg (J7799KD) on a second claim line.

If compounded Baclofen (J7799KD), when used as part of compounded drug combination in an implantable infusion pump, is not listed on a separate claim line and the claim does not meet the diagnosis requirements per the LCD; the total compounded drug line will be denied.

Compounded drug reporting
Do not list the drug separately from the dosage, such as morphine bupivacaine baclofen sufentanil 20mg 6mg 4mcg 5mcg. This format will be denied.
List each drug with the applicable dosing amount, for example morphine 20mg, bupivacaine 6 mg, baclofen 4 mcg, sufentanil 5 mcg.
Novitas Solutions will reimburse compounded drugs for use in implanted infusion pumps by multiplying the price per mcg or mg in the table below by the total number of mcg or mg of each drug used to refill the pump:

MEDICATION PRICE per mg or mcg

Morphine Sulfate $0.050/mg
Hydromorphone $0.130/mg
Bupivacaine         $0.040/mg
Tetracaine          $0.04/mg
Fentanyl PF          $0.0072/mcg
Droperidol          $0.0013/mcg
Ketamine           $0.0048/mcg
Baclofen                  $0.003/mcg
Clonidine                 $0.001/mg
Sufentanil                  $0.090/mcg
Prialt*                 $7.900/mcg

*Prialt is a drug only available from its pharmaceutical manufacturer. If given as a single drug as an ‘off-the-shelf’ product, use HCPCS code J2278KD. If mixed with other drugs in the pump, consider the mixture a compounded drug and use the HCPCS code J7799KD. Wastage of portion of a vial that is not used is reported by appending the JW modifier. Prialt is the only drug from the list above where the JW modifier would be applicable.


Effective for dates of service on or after August 1, 2011, all BCBSRI participating providers, except home infusion and specialty pharmacy, are required to file drug claims with the correct HCPCS code for the drug. Pricing will be determined solely based on the HCPCS code filed. Home infusion providers and specialty pharmacy should continue to file as they do today.

If there is no valid HCPCS code, the appropriate not otherwise classified (unlisted) drug code (J3490, J3530, J3535, J3590, J7199, J7599, J7699, J7799, J8498, J8499, J8999, J9999, Q0181, Q4082) should be submitted with the 11-digit NDC number. Unlisted codes should only be used when there is not a valid HCPCS code for the drug. NDC codes will not be considered for payment except when submitted with an unlisted HCPCS code.

Units for the HCPCS codes must be billed using the units of the total dosage administered to the patient.

For dates of service on or after August 1, 2011:

1. Drug claims filed with a HCPCS code alone, will process and price as they currently do. Pricing will be based on the HCPCS codes.

2. Drug claims filed with a NDC code alone will be denied back to the provider as a filing error. 
3. Drug claims filed with both a valid HCPCS code (not unlisted - J3490, J3530, J3535, J3590, J7199, J7599, J7699, J7799, J8498, J8499, J8999, J9999,
Q0181, Q4082) AND an NDC code will be priced using the HCPCS code.

4. Drug claims for drugs without a more specific HCPCS code filed with an unlisted HCPCS code and an NDC will price using the NDC. This is the only instance where NDC units should be used. These scenarios are limited and should only be filed when the NDC has no corresponding HCPCS code. Note: Claims filed under this scenario are subject to audit and subsequent recovery of payment if it is determined that the unlisted HCPCS code was used inappropriately.

5. Claims filed with an unlisted HCPCS codes and no NDC code will be denied back to the provider as a filing er

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