CurrentNeighborhood Health Plan of Rhode IslandPolicy N/A

Reimbursement for Medically Administered Medications

Governs reimbursement, billing, authorization, and documentation requirements for medically administered medications across Medicaid, MINTEGRITY, and Commercial lines.

Policy Summary

PayerNeighborhood Health Plan of Rhode Island

PolicyReimbursement for Medically Administered Medications

Policy CodePolicy N/A

Change TypeClarification (wastage language added)

Effective DateNov 1, 2019

Next Review Date

Key ActionObtain authorization for medications designated 'Covered with Authorization' and for unclassified codes over $50, submitting NDC, NDC units, and supporting clinical documentation.

SourceLink

POLICY UPDATE CHANGES

Added language clarifying wastage (compensation for discarded single-use vial amounts) during the 09/05/2023 policy review.

All linesApplies to

$50Auth threshold

HCPCS + NDCClaim requirements

JW/JZModifiers

UD340B requirement

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Coverage categories and requirements

Medications are categorized for coverage as follows and reimbursement depends on category, clinical criteria, and required documentation:

Options for coverage of medically administered medications (determined by Neighborhood P&T): Covered without Authorization; Covered without Authorization, following medical policy; Covered with Authorization; Drug Exclusions/Investigational/Experimental Services; Not covered; Medications medically administered under Medicare Part B may follow Medicare requirements.

ALL of the following

Provider must submit an accurate HCPCS code for claims billed as 'Covered without Authorization'.

ALL of the following

Coverage requires consistency with the referenced medical policy applicable to the medication.

ALL of the following

Must meet clinical medical policy criteria or medical necessity; some drugs require authorization for specific diagnoses as referenced in the Medical Pharmacy Benefit Searchable HCPCS Listing.
Authorization requests for unclassified codes over the threshold must include NDC, NDC units, and supporting clinical documentation when applicable.

ALL of the following

Examples include cosmetic treatments, treatment of sexual/erectile dysfunction, items or devices lacking FDA approval, services delivered in connection with non-covered items, and treatments that are investigational or part of certain clinical trial arms.
If the P&T Committee has not reviewed a new-to-market medication, it is not a covered benefit unless approved by the Chief Medical Officer (CMO) or representative.

ALL of the following

All claims must be submitted with both the appropriate HCPCS code and NDC; for Medicaid members, only valid NDCs included in the Medicaid Prescription Rebate program are eligible for payment consideration.
Medically administered medications must be billed with the correct HCPCS code; failure to submit accurate HCPCS codes or required clinical documentation may result in nonpayment.

ALL of the following

Unclassified HCPCS codes with a reimbursement amount over $50 require authorization prior to payment.
If a medically administered drug has its own HCPCS code, the plan will not reimburse claims billed with an unclassified code for that drug.

ALL of the following

Medical benefit claims submitted by 340B Covered Entities for drugs/biologics purchased through the 340B Pricing Program must include the UD HCPCS modifier on the initial claim submission.
Providers must use JW to identify discarded amounts from single-use vials and JZ when no discard; multi-dose vial waste is not compensated.

ALL of the following

When a provider must discard the remainder of a single-use vial or single-use package after administering a dose, Neighborhood compensates for both the administered dose and the discarded amount (submit JW modifier for discarded amounts).
Pharmaceutical waste and unused portions withdrawn from multi-dose vials are not compensated.

Required coding elements and thresholds

Required coding elementsmixedCovered

HCPCS	Medically administered medications must be billed with the correct HCPCS code; unclassified HCPCS codes over $50 require authorization.
NDC	All claims must be submitted with both the appropriate HCPCS code and NDC; only valid NDCs included in the Medicaid Prescription Rebate program are eligible for Medicaid payment consideration.
Modifiers JW/JZ/UD	JW for discarded amounts from single-use vials, JZ when no discard; UD modifier required for initial claim submissions by 340B Covered Entities for drugs or biologics purchased through the 340B Pricing Program.

Unclassified code authorization threshold

Authorization thresholdAll unclassified codes over $50 require prior authorization for reimbursement.

Authorization evidence requiredAuthorization requests for unclassified codes must include NDC, NDC units, and supporting clinical documentation.

Payment considerationUnclassified codes will be considered for payment only when authorization is obtained and documentation demonstrates medical necessity.

Authorization, billing and provider responsibilities

Prior Authorization

Prior Authorization Required

Providers must obtain prior authorization for medically administered medications designated as Covered with Authorization and for any reimbursement request billed with an unclassified code (e.g., HCPCS unclassified codes) when the claim line exceeds $50. Authorization requests for unclassified codes must include the NDC, NDC units, and supporting clinical documentation demonstrating medical necessity. Failure to submit accurate HCPCS/NDC information or required clinical documentation may result in denial or nonpayment.

Authorization required for medications designated Covered with Authorization
Unclassified HCPCS codes > $50 require authorization
Authorization requests for unclassified codes must include: NDC, NDC units, and supporting clinical documentation
Submit accurate HCPCS code and NDC on all claim submissions to avoid nonpayment

Note

Medicare-aligned and New-to-Market Medication Requirements

Neighborhood follows Medicare Part B alignment for medically administered drugs where applicable. Medications that are new to market and have not yet been reviewed by the Pharmacy & Therapeutics (P&T) Committee are not covered benefits by default unless a request is submitted to and approved by the Chief Medical Officer (CMO) or their designee. For drugs purchased through the 340B Pricing Program, medical benefit claims submitted by 340B Covered Entities must include the appropriate HCPCS UD modifier on the initial claim. All claims must be submitted with both the appropriate HCPCS code and the NDC in accordance with Neighborhood's NDC requirements policy.

Key definitions

Unclassified code — definition and operational note

DefinitionAn unclassified code provides a means of reporting procedures or services that do not have an established CPT/HCPCS code that adequately describes the service performed.

Descriptor limitationUnclassified codes do not include descriptor language that specifies components of a particular service; one unclassified code can represent numerous procedures or services.

Operational noteIf a medically administered medication has its own HCPCS code, the plan will not reimburse claims billed with an unclassified code for that drug.

Coverage interactionMedications covered under the pharmacy benefit that do not have a specified HCPCS code are not covered under the medical benefit using an unclassified code.

JW/JZ modifiers — wastage and modifier guidance

JW modifier