CurrentEmblemHealthPolicy RPC20230040

Drugs and Biologicals Payment Policy (Commercial, Medicare and Medicaid)

Defines EmblemHealth reimbursement and billing rules for drugs and biologicals (commercial, Medicare and Medicaid), aligning with CMS on which items are routine (bundled) versus separately reimbursed and describing billing requirements for hospital outpatient and facility claims.

Policy Summary

PayerEmblemHealth

PolicyDrugs and Biologicals Payment Policy (Commercial, Medicare and Medicaid)

Policy CodePolicy RPC20230040

Change TypeRevisions and template transfer

Effective DateMar 1, 2024

Next Review Date

Key ActionWhen billing hospital claims under revenue code 0636, include the appropriate HCPCS code (and required claim elements such as NDC, quantity, and administration date) even if the item is packaged or billed for an inpatient facility.

SourceLink

POLICY UPDATE CHANGES

Updated Reimbursement section to clarify that hospital claims for drugs and biologicals must be billed with the appropriate HCPCS codes when billed under revenue code 0636, including inpatient facility claims when separately payable.

Transferred policy content to individual company-branded template.

Initial policy created (New Policy).

Revenue code 0636 requiredHCPCS required on hospital claims billed under revenue code 0636

CMS alignmentPolicy aligns with CMS regarding routine vs separately payable drugs

J3490/J3590 not separately paidNot otherwise classified/unlisted drug codes treated as bundled except specified pass-through drugs

Trek Health ingests and normalizes Transparency in Coverage data and payer policy updates to give provider organizations a clear view of how commercial reimbursement behaves across markets, payers, and services. Our platform transforms raw payer disclosures into structured intelligence that supports contract evaluation, payer negotiations, and service line strategy. By combining market benchmarks with ongoing policy visibility, Trek helps teams identify variability, risk, and opportunity in commercial reimbursement. The result is faster insight, stronger negotiating positions, and more informed financial decisions.

When Drugs and Biologicals Are Separately Reimbursed

When drugs/biologicals are separately reimbursed

EmblemHealth follows CMS designations (pass-through or separately payable). Certain categories and CMS-listed pass-through drugs may be reimbursed separately.

ANY of the following

Drug/biological has CMS status of pass-through or separately reimbursable
Drug is used with an item of durable medical equipment
Drug is an antigen (some antigens)
Injectable osteoporosis drugs
Erythropoiesis-stimulating agents
Blood clotting factors
Injectable and infused drugs
Oral End-Stage Renal Disease (ESRD) drugs
Parenteral and enteral nutrition
Intravenous Immune Globulin (IVIG) provided in the home
Vaccinations
Immunosuppressive drugs following a Medicare paid transplant
Oral cancer drugs
Oral anti-nausea drugs
Self-administered drugs in hospital outpatient setting
Drugs billed using HCPCS C9399 (new FDA-approved drugs without HCPCS) may be separately payable and priced using AWP and/or CMS pricing methodology
Pricing methodology for C9399 is based on submitted NDC and may use Average Wholesale Price (AWP) and/or CMS pricing methodology

Code Groups and Billing Rules

Unclassified / Not Otherwise Classified drug codesHCPCSNot Covered

C9399	Unclassified drug or biological (new drugs approved on/after 2004 without specific HCPCS code) — may be separately payable and priced using AWP/CMS methodology
J3490	Not otherwise classified drug — generally not separately paid (considered inclusive of acquisition and pharmacy overhead) except certain pass-through high-cost prior authorized drugs
J3590	Unlisted biologics — generally not separately paid (considered inclusive of acquisition and pharmacy overhead) except certain pass-through high-cost prior authorized drugs

Billing Rule

Hospital billing for drugs/biologicals

Hospital claims for drugs and biologicals billed under revenue code 0636 must include the appropriate HCPCS drug codes; this requirement applies whether items are separately payable or packaged and includes inpatient facility claims when the drug is separately payable.

HCPCS (appropriate drug codes)
Revenue code 0636

Billing Rule

Use of C9399

HCPCS code C9399 may be used for new FDA‑approved drugs without an assigned HCPCS code; items billed appropriately with C9399 may be separately payable and are priced using Average Wholesale Price (AWP) and/or CMS pricing methodology based on the NDC submitted.

C9399

Policy Context and Scope

This policy outlines EmblemHealth's reimbursement and billing rules for drugs and biologicals across Commercial, Medicare, and Medicaid products, effective 03/01/2024. EmblemHealth aligns with CMS designations regarding which drugs and biologicals are considered routine (bundled) under facility, surgical, and room-and-board charges and which are eligible for separate reimbursement (including CMS pass-through status). The policy clarifies billing expectations, coding edits, and claim documentation requirements and notes that claims processing may be influenced by legislative mandates, provider contracts, member benefit documents, or system constraints.

Per this policy, hospital claims for drugs and biologicals billed under revenue code 0636 must include the appropriate HCPCS codes to support accurate rate setting and claims payment; this requirement applies whether items are separately payable or packaged and specifically includes inpatient facility claims when separately payable. Providers must also report the National Drug Code (NDC), the total quantity administered in the applicable unit of measure, and the administration date on the claim in accordance with CMS billing instructions.

Key Terms

Definitions

Pass-throughCMS-designated temporary status allowing certain high-cost drugs/biologics to be paid separately from bundled facility payments.

C9399HCPCS code for unclassified drug or biological: used for new FDA-approved drugs (on/after Jan 1, 2004) without a specific HCPCS code.

References and Related Policies

References: • CMS Pub 100-04, Medicare Claims Processing Manual, Chapter 17, §90.2 & §90.3 • National Uniform Billing Committee (NUBC) billing guidelines

Scope: This policy applies to EmblemHealth Commercial, Medicare and Medicaid products and aligns with CMS regarding which drugs and biologicals are routine (bundled) versus separately reimbursed. Hospital outpatient and facility billing must follow the CMS and NUBC guidance on reporting HCPCS codes, NDCs, quantities, and administration dates to ensure accurate reimbursement.

Policy Updates

2025-11-26revisedLatest

Transferred policy content to individual company‑branded template; formatting/template change only with no change to policy title or number.

2024-05-01revised

Updated Reimbursement section to clarify that hospital claims for drugs and biologicals billed under revenue code 0636 must include the appropriate HCPCS codes, including inpatient facility claims when separately payable, to support accurate rate setting and claims payment.

2023-10-31added