Infusion Drugs Billing

The Medicare Modernization Act of 2003 (MMA; Section 303(c)) made changes in the payment methodology for Part B covered drugs that are not paid on a cost or prospective payment basis. Starting January 1, 2005, many of the drugs and biologicals not paid on a cost or prospective payment basis are paid based on the Average Sales Price (ASP) methodology. In general, the payment allowance limits for Medicare Part B drugs and biologicals that are not paid on a cost or prospective payment basis are 106 percent of the ASP.

The payment methodology for drugs furnished "incident to" a physician's services includes those given per intravenous infusion and those used to fill or refill an implantable pump or reservoir. The payment is determined under the ASP methodology, as described above, unless the drug is a compounded drug; then pricing is performed by the local Medicare contractor. Noridian reimburses compounded drugs for use in implanted infusion pumps by multiplying the price per mcg or mg by the total number of mcg or mg of each drug used to refill the pump. For additional information on this subject, see related, "Compounded Drugs Billing."

To bill for infusion drugs/biologicals provided incident to a physician's service, the appropriate HCPCS code is billed with the quantity given according the definition of the code. For drugs that do not have an assigned code, bill the appropriate unlisted code with a quantity of one (1), and enter the required information the name of the drug and the dose of the drug in Item 19 on the CMS-1500 paper claim form or loop 2400/SV101-7 for electronic claims. If characters extend beyond SV101-7, continue entering in Loop 2300 NTE Segment.

If required information is missing, the code will be denied or deemed unprocessable.


One of the exceptions to the ASP methodology is for infusion drugs furnished through a covered item of durable medical equipment. These drugs are paid at 95 percent (95%) of the Average Wholesale Price (AWP) as found in the published compendia as of October 1, 2003, unless the drug is compounded or the drug is furnished incident to a professional service. The first listing thereafter will be used for drugs not listed at that time.


Last Updated Nov 02 , 2022