Section 418.101009. Reimbursement for custom compounded topical medication.

(1) Six months after the effective date of this rule, a custom compound topical medication, as defined in R418.10108, shall be reimbursed only when the compound meets all of the following standards:

(a)   There is no readily available commercially manufactured equivalent product.

(b)   No other FDA approved alternative drug is appropriate for the patient.

(c)   The active ingredients of the compound each have an NDC number and are components of drugs approved by the United States Food and Drug Administration (FDA).

(d)  The drug has not been withdrawn or removed from the market for safety reasons.

(e)    The prescriber is able to demonstrate to the payer that the compound medication is clinically appropriate for the intended use.

(2)    Topical compound drugs or medications shall be billed using the specific amount of each component drug and its original manufacturers’ NDC number included in the compound. Reimbursement shall be based on a maximum reimbursement of the AWP minus 10% based upon the original manufacturer’s NDC number, as published by Red Book or Medi-Span, and pro-rated for each component amount used. Components without NDC numbers shall not be reimbursed. A single dispensing fee for a compound prescription shall be $12.50 for a non-sterile compound. The dispensing fee for a compound prescription shall be billed with code WC 700-C. The provider shall dispense a 30-day supply per prescription.

(3)    Reimbursement for a custom compounded drug is limited to a maximum of $600.00. Any charges exceeding this amount must be accompanied by the original component manufacturers’ invoice pro-rated for each component amount used, for review by the carrier.

History: 2014 AACS.