CurrentHumanaPolicy CP2021004

Physician Administered Drugs (PAD) reimbursement for Kentucky PAD list codes without fee schedule rates

Defines Humana's Kentucky Medicaid payment approach for physician-administered drug codes on the Kentucky PAD list that lack rates on the Kentucky Medicaid fee schedule; applies to professional services and providers submitting claims in Kentucky Medicaid.

Policy Summary

PayerHumana

PolicyPhysician Administered Drugs (PAD) reimbursement for KY PAD list codes without fee schedule rates

Policy CodePolicy CP2021004

Change TypeNo material change

Effective DateApr 1, 2021

Next Review Date

Key ActionWhen a PAD code lacks a Kentucky Medicaid fee schedule rate, submit the charge with the valid corresponding NDC and expect reimbursement based on place of service (POS 11: ASP + 6%; POS 12/22: AWP - 15%).

SourceLink

POLICY UPDATE CHANGES

No material clinical or coverage changes in this revision.

ASP+6%POS 11 reimbursement

AWP-15%POS 12 reimbursement

AWP-15%POS 22 reimbursement

NDC requiredNDC requirement

Professional onlyService scope

Reimbursement Criteria

Reimbursement criteria for PAD codes without fee schedule rates

Reimbursement rules when no Kentucky Medicaid fee schedule rate exists for a PAD code:

Applies to professional services only (policy applies to professional services).

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

Place of service reimbursement methods

If PAD charge is reported with place of service (POS) code 11 (office), reimbursed at Medicare's average sales price (ASP) plus 6%.
If PAD charge is reported with POS code 12 (home), reimbursed at manufacturer's average wholesale price (AWP) minus 15%.

Policy Summary

PayerHumana

PolicyPhysician Administered Drugs (PAD) reimbursement for KY PAD list codes without fee schedule rates

Policy CodePolicy CP2021004

Change TypeNo material change

Effective DateApr 1, 2021

Next Review Date

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.

Submission and Billing Instructions

Billing Rule

Submit NDC and use POS-based fallback reimbursement methods when no KY fee schedule rate exists

When a reimbursement rate for a PAD List code is not listed on the Kentucky Medicaid fee schedule, Humana permits specific fallback reimbursement methods based on the place of service and requires providers to submit the charge with the valid corresponding NDC for all drug and biological codes.

If charge reported with POS 11 (office): reimbursed at Medicare ASP + 6%.
If charge reported with POS 12 (home): reimbursed at manufacturer's AWP - 15%.
If charge reported with POS 22 (on-campus outpatient hospital): reimbursed at manufacturer's AWP - 15%.
Provider must submit charge with a valid corresponding NDC for all drug and biological codes.
Claims remain subject to other plan requirements (medical necessity, reasonableness, referral/authorization) and may be subject to Humana Healthy Horizons out-of-network payment rules when applicable.

Terms and Place-of-Service Definitions

Physician Administered Drug (PAD) — definition and scope

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

Typical settingAdministered in a physician's office or other outpatient clinical setting.

ExclusionsVaccines are excluded from this PAD definition.

Place of Service (POS) 11 — Office

POS code11

NameOffice

DescriptionLocation, other than a hospital, skilled nursing facility (SNF), military treatment facility, community health center, State or local public health clinic, or intermediate care facility (ICF), where the health professional routinely provides health examinations, diagnosis, and treatment of illness or injury on an ambulatory basis.

Place of Service (POS) 12 — Home

POS code12

NameHome

DescriptionLocation, other than a hospital or other facility, where the patient receives care in a private residence.

Place of Service (POS) 22 — On Campus-Outpatient Hospital

POS code22

NameOn Campus-Outpatient Hospital

DescriptionA portion of a hospital's main campus which provides diagnostic, therapeutic (both surgical and nonsurgical), and rehabilitation services to sick or injured persons who do not require hospitalization or institutionalization. (Description change effective January 1, 2016)

OpenPayer

Physician Administered Drugs (PAD) reimbursement for Kentucky PAD list codes without fee schedule rates

Reimbursement Criteria

Codes and Coding Requirements

Submission and Billing Instructions

Terms and Place-of-Service Definitions