CurrentHumanaPolicy CP2O21004

Physician Administered Drugs (PAD) reimbursement for Kentucky Medicaid

Governs how Humana establishes reimbursement rates for physician‑administered drug codes on the Kentucky Medicaid PAD list that lack rates on the Kentucky Medicaid fee schedule; affects providers submitting claims for Humana Healthy Horizons in Kentucky members.

Policy Summary

PayerHumana

PolicyPhysician Administered Drugs (PAD) reimbursement for Kentucky Medicaid

Policy CodePolicy CP2O21004

Change TypeNo material change

Effective Date04/2021

Next Review Date

Key ActionProviders must submit a charge with the valid, corresponding National Drug Code (NDC) for all drug and biological codes.

SourceLink

POLICY UPDATE CHANGES

No material clinical or coverage changes in this revision.

ASP + 6%POS 11 office-administered PADs

AWP - 15%POS 22 on-campus outpatient hospital PADs

AWP - 15%POS 12 home-administered PADs

NDC requiredNDC submission

KentuckyJurisdiction

Reimbursement criteria for PAD codes without fee schedule rates

When a reimbursement rate for a code on the Kentucky PAD List is not listed on the Kentucky Medicaid fee schedule, Humana reimburses as follows based on place of service:

ALL of the following

POS 11
- Charge reported with place of service (POS) code 11: Reimbursed at Medicare's average sales price (ASP) plus 6%.
POS 22
- Charge reported with place of service (POS) code 22: Reimbursed at manufacturer's average wholesale price (AWP) minus 15%.
POS 12

Policy Summary

PayerHumana

PolicyPhysician Administered Drugs (PAD) reimbursement for Kentucky Medicaid

Policy CodePolicy CP2O21004

Change TypeNo material change

Effective Date04/2021

Next Review Date

Key ActionProviders must submit a charge with the valid, corresponding National Drug Code (NDC) for all drug and biological codes.

SourceLink

On This Page

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.

Charge reported with place of service (POS) code 12: Reimbursed at manufacturer's average wholesale price (AWP) minus 15%.

Provider must submit a charge with the valid, corresponding National Drug Code (NDC) for all drug and biological codes as outlined in Kentucky DMS guidance; claims remain subject to medical necessity, reasonableness, and applicable referral/authorization requirements.

See policy for potential additional payment rules (for example, out-of-network payment policy may apply).

Kentucky PAD List codes and reimbursement formulas

Kentucky PAD List codes without fee schedule ratesmixed

PAD codes on Kentucky DMS PAD List

Physician Administered Drug codes that may lack fee schedule rates

Reimbursement formula by place of service — PAD codes without fee schedule rates

POS 11 reimbursementMedicare ASP + 6%

POS 22 reimbursementManufacturer AWP - 15%

POS 12 reimbursementManufacturer AWP - 15%

Billing and submission requirements for providers

Documentation Required

Submit valid NDC with drug/biologic claims

Providers must submit a charge with the valid, corresponding National Drug Code (NDC) for all drug and biological codes as outlined in Kentucky DMS guidance.

Requirement applies to all drug and biological codes billed to Humana for Kentucky Medicaid members.
Claims remain subject to other plan requirements such as medical necessity, reasonableness, and applicable referral/authorization rules.

Key terms and place-of-service codes

Physician Administered Drug (PAD) — definition

DefinitionPhysician Administered Drug (PAD): drugs other than vaccines covered under section 1927(k)(2) of the Social Security Act, typically administered by a medical professional in a physician's office or other outpatient clinical setting.

Covered contextApplies to PAD codes on the Kentucky PAD List when a fee schedule rate is not listed; claims remain subject to medical necessity and other plan requirements.

NDC requirement (related)Providers must submit a charge with the valid, corresponding National Drug Code (NDC) for all drug and biological codes as outlined in Kentucky DMS guidance.

POS 11 — definition (office)

POS code11 — Office location where the health professional routinely provides ambulatory care (not a hospital, SNF, military treatment facility, community health center, State/local public health clinic, or ICF).

Typical servicesHealth examinations, diagnosis, and treatment of illness or injury on an ambulatory basis.

RelevanceUsed to determine reimbursement method for PADs (Medicare ASP + 6% when no fee schedule rate exists).

POS 12 — definition (home)

POS code12 — Home location (private residence) where the patient receives care, other than a hospital or other facility.

SettingCare provided in the patient's private residence.

RelevanceUsed to determine reimbursement method for PADs (Manufacturer AWP - 15% when no fee schedule rate exists).

POS 22 — definition (on-campus outpatient hospital)

POS code22 — On-campus outpatient hospital: a portion of a hospital's main campus providing diagnostic, therapeutic, and rehabilitation services to persons who do not require hospitalization.

ScopeIncludes surgical and nonsurgical outpatient services on the hospital main campus.

RelevanceUsed to determine reimbursement method for PADs (Manufacturer AWP - 15% when no fee schedule rate exists).