Drugs and Biologicals Products

20.3 - Drugs and Biologicals Products (Rev. 13599, Issued: 01-30-26 , Effective: 05-01-26, Implementation: 05-01-26 ) Except as noted below, all drugs and biological products used for the treatment of ESRD are included in the ESRD PPS and are not separately paid as of January 1, 2011, as payments for these items were incorporated into the base rate. The drugs and biological products include, but are not limited to: • Renal dialysis drugs and biological products included under the composite rate as of December 31, 2010 (discussed below); • Former separately billable Part B injectable drugs and biological products used for the treatment of ESRD; • Oral or other forms of drugs and biological products with an injectable functional equivalent used for the treatment of ESRD formerly billed under Part D; and • Oral or other forms of drugs and biological products used for the treatment of ESRD without an injectable functional equivalent (effective January 1, 2025.) See §60.D of this chapter for details on drug eligibility under the outlier payment policy. Drugs and biological products furnished to ESRD beneficiaries that are not used for the treatment of ESRD may be paid separately. When drugs or biological products are furnished to an ESRD beneficiary and are not a renal dialysis service, the ESRD facility or other provider can append the claim line with the AY modifier to receive separate payment. For more information regarding the AY modifier refer to Pub. 100- 04, Medicare Claims Processing Manual, chapter 8, §60.2.1.1. Drugs and biological products identified for consolidated billing are always considered to be renal dialysis services when furnished by the ESRD facility or physician receiving the Monthly Capitation Payment (MCP) (discussed in §40.E of this chapter), and therefore no separate payment is made to ESRD facilities with or without the AY modifier. With regard to other providers and suppliers, when these products are furnished to ESRD beneficiaries they are usually not separately payable. That is, other providers and suppliers furnishing drugs and biological products subject to the ESRD PPS consolidated billing could only receive separate payment under another payment system in certain circumstances: For example, if the drug or biological product was furnished for other labeled indications or the ESRD beneficiary received emergency dialysis in a hospital. Information regarding consolidated billing requirements for drugs and biological products can be found in §20.3.F of this chapter and in Pub. 100-04, Medicare Claims Processing Manual, chapter 8, §60.2.1.1. The list of drugs and biological products used for the ESRD PPS consolidated billing may be viewed at http://www.cms.gov/Medicare/Medicare-Fee-for-Service- Payment/ESRDpayment/Consolidated_Billing.html. This list is used to enforce consolidated billing edits, which ensure that payment is not made outside of the ESRD PPS for these renal dialysis drugs and biological products. This is not an all-inclusive list, and any drug or biological product that falls within an ESRD PPS functional category is also included under the ESRD PPS (see §20.3.A below). Providers and suppliers other than ESRD facilities furnishing those drugs and biological products for the treatment of ESRD must look to the ESRD facility for payment. NOTE: Effective January 1, 2012, and January 1, 2013, ESRD facilities and other providers may receive separate payment for vancomycin and daptomycin, respectively, by placing the AY modifier on the claim, when the drug is furnished for reasons other than the treatment of ESRD. The ESRD facility must indicate the appropriate ICD diagnosis code for which the vancomycin or daptomycin is indicated. See Pub.100-04, Medicare Claims Processing Manual, chapter 8, §60.2.1.1 for additional information. A. ESRD PPS Functional Categories The ESRD PPS functional category is a distinct grouping of drugs or biological products, as determined by CMS, whose end action effect is the treatment or management of a condition or conditions associated with ESRD. The Drug Designation Process is dependent on the ESRD PPS functional categories, as discussed in section 20.3.1. Drugs and biological products included in the ESRD PPS base rate that are “always” considered to be renal dialysis services are those used for access management, anemia management, bone and mineral metabolism management, and cellular management. ESRD facilities are responsible for furnishing these drugs directly or under arrangement. This includes any drug or biological product that is furnished by the ESRD facility either in the facility or taken by the patient at home. Erythropoiesis stimulating agents (ESAs), such as epoetin alfa (EPOGEN®) and darbepoetin alfa (ARANESP®), when furnished by an ESRD facility, are always considered to be renal dialysis services and included in the ESRD PPS. Prior to January 1, 2020, monthly dosages of these ESAs were subject to Medicare’s ESA claims monitoring policy as discussed in Pub.100-04, Medicare Claims Processing Manual, chapter 8, §60.4.1. Prior to January 1, 2020, edits were applied prior to pricing so that ESAs were not overvalued in determining eligibility for outlier payments. Effective January 1, 2020, the ESA monitoring policy is no longer applicable under the ESRD PPS. Functional Categories Included in the ESRD PPS Base Rate, Always Considered to be Renal Dialysis Services, and Not Separately Payable for ESRD Facilities ESRD PPS Functional Category Description and Examples Access Management Drugs/biological products used to ensure access by removing clots from grafts, reverse anticoagulation if too much medication is given, and provide anesthetic for access placement. Anemia Management Drugs/biological products used to stimulate red blood cell production and/or treat or prevent anemia. Examples of drugs/biological products in this category include ESAs and iron. Bone and Mineral Metabolism Drugs/biological products used to prevent/treat bone disease secondary to dialysis. Examples of drugs/biological products in this category include phosphate binders and calcimimetics. Cellular Management Drugs/biological products used for deficiencies of naturally occurring substances needed for cellular management. This category includes levocarnitine. Drugs and biological products included in the ESRD PPS base rate that may be used for both the treatment of ESRD and for reasons other than the treatment of ESRD are those used as antiemetics, anti-infectives, antipruritics, anxiolytics, excess fluid management, fluid and electrolyte management (including volume expanders), and pain management. ESRD facilities are responsible for furnishing these drugs directly or under arrangement when they are prescribed for the treatment of ESRD. This includes any drug or biological product that is furnished in the ESRD facility or taken by the patient outside of the ESRD facility. ESRD facilities are responsible for furnishing antibiotics for access site infections directly or under arrangement. When antibiotics are used at home by a patient to treat an infection of the catheter site or peritonitis associated with peritoneal dialysis, the antibiotics are included in the ESRD PPS and may not be paid separately. This includes antibiotics that may be added to a patient’s dialysate solution for the purposes of vascular access-related and peritonitis infections. Any other drugs or biological products (other than those categories described above and below), when used for the treatment of ESRD, are also included in the ESRD PPS. For example, • Patient A experiences nausea or pain during a hemodialysis treatment and requires medications. Any medication furnished during the dialysis treatment or after the treatment is considered a renal dialysis service and may not be billed separately. • Patient B experiences anxiety with dialysis treatments and is prescribed anti-anxiety medication during and between the dialysis treatments. Any medication furnished in preparation for the dialysis treatment, during the dialysis treatment or after the dialysis treatment, is considered a renal dialysis service and may not be billed separately. • Any drug or biological product added to patient dialysate solutions. Functional Categories Included in the ESRD PPS Base Rate but May be Used for Dialysis and Non- Dialysis Purposes ESRD PPS Functional Category Description and Examples Antiemetic Drugs/biological products used to prevent or treat nausea and vomiting secondary to dialysis. Excludes antiemetics used in conjunction with chemotherapy, as these are covered under a separate benefit category. Anti-infectives Drugs/biological products used to treat infections. May include antibacterial and antifungal drugs. Antipruritic Drugs/biological products in this category are included for their action to treat itching secondary to dialysis but may have multiple clinical indications. Anxiolytic Drugs/biological products in this category are included for the treatment of restless leg syndrome secondary to dialysis but may have multiple clinical indications. Excess Fluid Management Drug/biological products/fluids used to treat fluid excess or fluid overload. Fluid and Electrolyte Management Including Volume Expanders Intravenous drugs/biological products/fluids used to treat fluid and electrolyte needs. Pain Management Drugs/biological products used to treat vascular access site pain and to treat pain medication overdose. B. Injectable Drugs and Biological Products All injectable drugs or biological products used for the treatment of ESRD are included in the ESRD PPS and are not separately paid. This includes renal dialysis drugs and biological products that, prior to the implementation of the ESRD PPS, were separately billable under Part B. Injectable drugs and biological products that may be used for both the treatment of ESRD and for treatment of non-ESRD conditions continue to be paid separately when used for non-ESRD conditions and reported on the claim with an AY modifier. See §20.4.C of this chapter for more information on the AY modifier. NOTE: ESRD patients should not be sent to other settings for the purpose of receiving separate payment for renal dialysis injectable drugs and biological products or for the purpose of avoiding financial responsibility for renal dialysis items and services. ESRD facilities must report the appropriate Healthcare Common Procedure Coding System (HCPCS) codes used for supplies utilized during the administration and furnishing of renal dialysis drugs and biological products, including drugs and biological products furnished in the beneficiary’s home. These supplies include: • A4657: Injection administration-supply charge (includes the cost of alcohol swab, syringe, and gloves) and • A4913: IV administration-supply charge (includes the cost of IV solution administration set, alcohol swab, syringe, and gloves). A4913 should only be used when an IV solution set is required for a drug to be given. See Pub. 100-04, Medicare Claims Processing Manual, chapter 8, §60.2.1 for billing procedures. These supplies are eligible for payment as outlier services in accordance with §60.D of this chapter. C. Oral or Other Forms of Injectable Drugs and Biological Products The ESRD PPS includes certain drugs and biological products that were previously paid under Part D. Oral or other forms of injectable renal dialysis drugs and biological products—for example, Vitamin D analogs, Levocarnitine, antibiotics or any other oral or other form of injectable drug or biological product furnished as renal dialysis services—are also included in the ESRD PPS and may not be separately paid. NOTE: Beginning January 1, 2019, oral levocarnitine is no longer considered a renal dialysis service, since the oral form is not indicated for dialysis related carnitine deficiency. The ESRD facility should report any drug or biological product furnished on the ESRD claim with the line item date of service and the quantity of the drug or biological product furnished at the time of the visit. For claims processing instructions see Pub. 100-04, Medicare Claims Processing Manual, chapter 8, §60.2.1.2. For oral or other forms of renal dialysis drugs that are filled at the pharmacy for home use, ESRD facilities should report one line-item per prescription, but only for the quantity of the drug expected to be taken during the claim billing period. For example: A prescription for oral vitamin D was ordered for one pill, to be taken 3 times daily, for a period of 45 days. The patient began taking the medication on April 15, 2011. On the April claim, the ESRD facility would report the appropriate National Drug Code (NDC) code for the drug with the quantity 45 (15 days x 3 pills per day). The remaining pills, which would be taken in May, would appear on the May claim for a quantity of 90 (30 days x 3 pills per day). Prescriptions for a 3-month supply of the drug would never be reported on a single claim. Only the amount expected to be taken during the claim billing period would be reported on that claim. Oral and other forms of injectable renal dialysis drugs are eligible for consideration as outlier services. See the CMS website at http://www.cms.gov/Medicare/Medicare-Fee-for-Service- Payment/ESRDpayment/Outlier_Services.html for a list of these drugs. CMS prices these drugs using the best available data from Part D, which is generally national average drug prices based on the Medicare Prescription Drug Plan Finder. Payment also includes a mean dispensing fee that is applied to each NDC included on the monthly claim, in accordance with Pub. 100-04, Medicare Claims Processing Manual, chapter 8, §60.2.1.2. NOTE: Oral antibiotics are not listed as outlier services due to the administrative burden of maintaining an accurate and timely list of all antibiotics covered under Part D. D. Oral-Only Renal Dialysis Service Drugs and Biological Products Oral-only forms of renal dialysis drugs and biological products with no injectable functional equivalent or other form of administration other than an oral form are included in the ESRD PPS as Part B renal dialysis services effective January 1, 2025. NOTE: As discussed in the CY 2011 ESRD PPS final rule (75 FR 49038 through 49044), the incorporation of oral-only drugs and biological products was originally delayed until January 1, 2014. As a result of legislation, implementation of renal dialysis oral-only drugs and biological products was delayed until January 1, 2025. E. Drugs and Biological Products Furnished for Reasons Other than for the Treatment of ESRD Drugs and biological products furnished by an ESRD facility that are not used for the treatment of ESRD may be billed separately when coded with the AY modifier. The AY modifier serves as an attestation that the item or service is deemed reasonable and necessary for the dialysis patient but is not being used for the treatment of ESRD. Drugs and biological products furnished by the ESRD facility that are considered to always be renal dialysis services are not paid separately with or without the AY modifier. See Pub. 100-04, Medicare Claims Processing Manual, chapter 8, §60.2.1.1 for more information. NOTE: The ESRD PPS base rate accounts for all ESRD facility staff time during a dialysis session. Therefore, staff time used to furnish drugs and biological products for reasons other than for the treatment of ESRD is included in the ESRD PPS and is not billed separately. F. Drugs and Biological Products Under the Composite Rate Prior to the implementation of the ESRD PPS, certain drugs used in furnishing outpatient maintenance dialysis treatments were considered composite rate drugs and not billed separately. Payments for these drugs are included in the ESRD PPS. Historically, drugs that were used as a substitute for any of these drugs, or were used to accomplish the same effect, were also covered under the composite rate. The following list is comprised of drugs and biological products under the composite rate. Staff time and supplies used to furnish these drugs were covered under the composite rate, are currently included under the ESRD PPS, and are not billed separately. • Heparin • Mannitol* • Glucose • Antiarrhythmics • Saline** • Antihypertensives • Protamine • Pressor Drugs • Antihistamines • Local Anesthetics • Heparin Antidotes • Dextrose • Apresoline (hydralazine) • Benadryl • Inderal • Dopamine • Hydralazine • Levophed • Insulin • Lanoxin • Verapamil • Lidocaine • Solu-cortef • Antibiotics*** *Albumin may be reasonable and medically necessary for the treatment of certain medical complications in renal dialysis patients. If albumin is used for fluid management as a volume expander, then payment for it is included in the ESRD facility’s ESRD PPS payment for maintenance dialysis. **Used in delivery of other drugs, such as Albumin. ***Antibiotics - Effective January 1, 2012, antibiotics (when used at home by a patient to treat an infection of the catheter site or peritonitis associated with peritoneal dialysis) are no longer considered composite rate drugs. Under the ESRD PPS, all antibiotics used to treat vascular access-related and peritonitis infections, including those furnished in the home, are included in the ESRD PPS and are not eligible for separate payment, although they may be eligible for outlier payments. For more information regarding the outlier policy see §60.D of this chapter. Thrombolytic drugs (such as heparin) furnished by ESRD facilities to Medicare ESRD beneficiaries for access management purposes are recognized as composite rate drugs under the ESRD PPS. Effective January 1, 2012, thrombolytics are not eligible for outlier payments. Effective January 1, 2013, payment for thrombolytic drugs is included in the ESRD PPS and may not be separately paid when furnished to an ESRD Medicare beneficiary. Refer to 42 CFR §413.237 (a)(1)(i) for more information. Composite rate drugs are eligible for bad debt payments and, effective January 1, 2025, eligible for outlier payments. For more information regarding the bad debt policy, see §80 of this chapter. H. Drug Overfill and Discarded Drug Policy Medicare does not pay for additional medications in drug containers provided at no cost to the ESRD facility. ESRD facilities may not receive additional payment under the ESRD PPS when they furnish drug overfill medications to Medicare beneficiaries. Drug overfill amounts are not eligible for outlier payments. In addition, beginning January 1, 2025, ESRD facilities must report and document any discarded amount of a renal dialysis drug or biological product from a single-dose container or single-use package that is paid for under the ESRD PPS using the JW or JZ modifier in accordance with 42 CFR § 413.198(b)(5)(ii), (ii), and (6). For additional information about the use of the JW and JZ modifiers, please see Pub. 100-04, Chapter 17, § 40.