Knowing your Medicare ABC&Ds

April 3, 2006

Among the sources of confusion accompanying the implementation of Medicare Part D is the distinction between drugs covered under Part B and Part D. CMS officials held a teleconference late in January to listen to provider concerns, answer questions, and correct misinterpretation.

Part B provides Supplementary Medical Insurance to Part A beneficiaries who enroll voluntarily and pay the monthly premium. In addition to physician and other outpatient services, Part B covers certain categories of drugs, including:

Confusion arises because some drugs can be paid by either Part B or Part D, depending upon the circumstances under which they are prescribed, dispensed, or administered. For example, total parenteral nutrition (TPN) solutions and their components are covered under Part B for a patient with permanent dysfunction of the gastrointestinal tract. But if the dysfunction is not permanent, a TPN solution is treated as a Part D drug. Medications like albuterol or insulin are payable under Part B when administered using DME such as a nebulizer or infusion pump; the drugs are covered by Part D if administered through a metered dose inhaler or a syringe.

In general, drugs dispensed by a physician, DME supplier, or hospital outpatient department will be covered by Part B. There are, however, exceptions. Part B does not cover patients in long-term care facilities; these patients are expected to receive coverage under Part D for all medically necessary drugs. Immunosuppressive agents are covered under Part B when an organ transplant is covered by Medicare, but the same drugs are to be billed to Part D for transplants that are not received under Medicare coverage. Vitamins and minerals added to TPN solutions are covered under Part B but cannot be billed with TPN solutions under Part D because vitamins and minerals are among those items specifically excluded from coverage by statute.

CMS expects the Part D plans to make a determination of coverage under Part B or D on a case-by-case basis. A prescription drug plan should not require that a Part B denial accompany claims for Part D coverage. Medicare Advantage plans that tell providers to process Part B drugs such as human growth factor under Part D are also mistaken in their interpretation of the coverage distinction.