Subject:
Compounded Medications and Compounding Kits
Description:
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IMPORTANT NOTE:
The purpose of this policy is to provide general information applicable to the administration of health benefits that Horizon Blue Cross Blue Shield of New Jersey and Horizon Healthcare of New Jersey, Inc. (collectively “Horizon BCBSNJ”) insures or administers. If the member’s contract benefits differ from the medical policy, the contract prevails. Although a service, supply or procedure may be medically necessary, it may be subject to limitations and/or exclusions under a member’s benefit plan. If a service, supply or procedure is not covered and the member proceeds to obtain the service, supply or procedure, the member may be responsible for the cost. Decisions regarding treatment and treatment plans are the responsibility of the physician. This policy is not intended to direct the course of clinical care a physician provides to a member, and it does not replace a physician’s independent professional clinical judgment or duty to exercise special knowledge and skill in the treatment of Horizon BCBSNJ members. Horizon BCBSNJ is not responsible for, does not provide, and does not hold itself out as a provider of medical care. The physician remains responsible for the quality and type of health care services provided to a Horizon BCBSNJ member.
Horizon BCBSNJ medical policies do not constitute medical advice, authorization, certification, approval, explanation of benefits, offer of coverage, contract or guarantee of payment.
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Drug compounding is defined as the process by which a pharmacist or doctor combines, mixes, or alters ingredients to create a medication tailored to an individual patient’s needs. The FDA recognizes pharmacists or physicians to engage in traditional extemporaneous drug compounding of reasonable quantities of drugs in response and receipt of a valid prescription. Drug compounding may be required:
- To fit the medical needs of a patient because a medication is not commercially available in the strength required
- For children and other patients that cannot or have trouble swallowing and require an alternative dosage form (i.e., liquid, suppository)
- For those patients who have sensitivity to dyes, preservatives, or fillers in commercial products and require allergy-free medications.
Policy:
(NOTE: For Medicare Advantage, please refer to the Medicare Coverage Section below for coverage guidance)
I. Compounded medications and compounding kits are considered medically necessary when all of the following criteria are met:
1. There is no FDA approved, commercially available product that is identical to the compounded product
2. Every ingredient in the compound is being used for its FDA approved indication OR compendia recognized off-label indication
[INFORMATION NOTE: Off-labeled indication and associated compendia should be based on Horizon BCBSNJ Medical Policy on 'Off-Label Use of Prescription Drugs' (Policy #008) in the Drugs Section.]
3. Every ingredient in the compound is being used for an FDA approved route of administration
4. The medication is being compounded to meet a specific patient need for which an FDA approved product is not available
II. When compounded medications and compounding kits are considered medically necessary, therapy will be approved for 3 months if the requested dose and all ingredients do not exceed the FDA recommended maximum daily dose.
III. Continuation of compounded medications and compounding kits will be approved every 3 months if member demonstrates improvement in disease state
IV. All other uses of compounded medications and compounding kits, including but not limited to the following, are considered investigational.
1. Any ingredient that is NOT FDA approved.
2. Any ingredient in the compound used for an indication that is not the FDA labeled indication or compendia recognized off-label indication.
3. Any ingredient in the compound used for an indication that is not the FDA approve route of administration.
4. Any ingredient exceeding the FDA recommended maximum daily dose.
V. Use of compounded medications and compounding kits for the purpose of convenience is considered not medically necessary.
Medicare Coverage
Medicare Advantage will follow the Horizon Policy. There is no National Coverage Determination (NCD). Local Coverage Article: Approved Drugs and Biologicals; Includes Cancer Chemotherapeutic Agents A53049 states that Compounded drugs that are self-administered are not covered by Medicare. Also see Local Coverage Article: Compounded Drugs Used in an Implantable Infusion Pump A54100.
Local Coverage Article: Approved Drugs and Biologicals; Includes Cancer Chemotherapeutic Agents (A53049). Available to be accessed at Novitas Solutions, Inc., Medical Policy Search page: https://www.novitas-solutions.com/webcenter/portal/MedicareJL/pagebyid?contentId=00024370
Local Coverage Article: Compounded Drugs Used in an Implantable Infusion Pump (A54100). Available at: https://www.cms.gov/medicare-coverage-database/details/article-details.aspx?articleId=54100&ver=33&Date=01%2f28%2f2016&DocID=A54100&bc=hAAAAAgAAAAAAA%3d%3d&.
Local Coverage Article: External Infusion Pumps - Policy Article (A52507). Available at: https://www.cms.gov/medicare-coverage-database/details/article-details.aspx?articleId=52507&ver=24&LCDId=33794&ContrId=389&ContrVer=1&CntrctrSelected=389*1&Cntrctr=389&s=38&DocType=All&bc=AggAAAQAIAAAAA%3d%3d&
Medicaid Coverage
For Horizon NJ Health members, please follow this link for the corresponding HNJH drug policy https://services3.horizon-bcbsnj.com/ddn/NJhealthWeb.nsf
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Horizon BCBSNJ Medical Policy Development Process:
This Horizon BCBSNJ Medical Policy (the “Medical Policy”) has been developed by Horizon BCBSNJ’s Medical Policy Committee (the “Committee”) consistent with generally accepted standards of medical practice, and reflects Horizon BCBSNJ’s view of the subject health care services, supplies or procedures, and in what circumstances they are deemed to be medically necessary or experimental/ investigational in nature. This Medical Policy also considers whether and to what degree the subject health care services, supplies or procedures are clinically appropriate, in terms of type, frequency, extent, site and duration and if they are considered effective for the illnesses, injuries or diseases discussed. Where relevant, this Medical Policy considers whether the subject health care services, supplies or procedures are being requested primarily for the convenience of the covered person or the health care provider. It may also consider whether the services, supplies or procedures are more costly than an alternative service or sequence of services, supplies or procedures that are at least as likely to produce equivalent therapeutic or diagnostic results as to the diagnosis or treatment of the relevant illness, injury or disease. In reaching its conclusion regarding what it considers to be the generally accepted standards of medical practice, the Committee reviews and considers the following: all credible scientific evidence published in peer-reviewed medical literature generally recognized by the relevant medical community, physician and health care provider specialty society recommendations, the views of physicians and health care providers practicing in relevant clinical areas (including, but not limited to, the prevailing opinion within the appropriate specialty) and any other relevant factor as determined by applicable State and Federal laws and regulations.
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Index:
Compounded Medications
Compounding Medications
Compounding Kits
References:
1. Federal Food and Drug Administration. Compliance Policy Guide Section 460.200 Pharmacy Compounding. May 2002. http://www.fda.gov/ora/compliance_ref/cpg/cpgdrg/cpg460-200.html.
2. Off-Label Use of Prescription Drugs, Horizon BCBSNJ Uniform Evidence Based Medical Policy Manual. Policy #008 in the Drugs Section.
3. Federal Food and Drug Administration. FDA Implementation of the Compounding Quality Act. February 8 2016. Accessed from: http://www.fda.gov/Drugs/GuidanceComplianceRegulatoryInformation/PharmacyCompounding/ucm375804.htm#Traditional
Codes:
(The list of codes is not intended to be all-inclusive and is included below for informational purposes only. Inclusion or exclusion of a procedure, diagnosis, drug or device code(s) does not constitute or imply authorization, certification, approval, offer of coverage or guarantee of payment.)
CPT*
HCPCS
J7999
* CPT only copyright 2020 American Medical Association. All rights reserved. CPT is a registered trademark of the American Medical Association.
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Medical policies can be highly technical and are designed for use by the Horizon BCBSNJ professional staff in making coverage determinations. Members referring to this policy should discuss it with their treating physician, and should refer to their specific benefit plan for the terms, conditions, limitations and exclusions of their coverage.
The Horizon BCBSNJ Medical Policy Manual is proprietary. It is to be used only as authorized by Horizon BCBSNJ and its affiliates. The contents of this Medical Policy are not to be copied, reproduced or circulated to other parties without the express written consent of Horizon BCBSNJ. The contents of this Medical Policy may be updated or changed without notice, unless otherwise required by law and/or regulation. However, benefit determinations are made in the context of medical policies existing at the time of the decision and are not subject to later revision as the result of a change in medical policy
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