AHA Coding Clinic® for HCPCS - 2004 Quarter 4
New drugs, biologicals and radiopharmaceuticals before creation of HCPCS
Effective January 1, 2004, Section 621(a)(1) of the Medicare Modernization Act (MMA) requires CMS to pay 95 percent of Average Wholesale Price (AWP) for an outpatient drug or biological for which a HCPCS code has not been created. As an interim approach, CMS published Transmittal 188, issued on May 28, 2004, instructing hospitals to bill for a drug or biological that is newly approved by the FDA by reporting the National Drug Code (NDC) for the product along with a new HCPCS code, C9399 , Unclassified drug or biological. The Outpatient Code Editor (OCE) suspends the claim for manual pricing...
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Article Overview
This article covers CMS guidance and rulemaking related to billing and payment for newly approved outpatient drugs, biologicals, and radiopharmaceuticals when no permanent HCPCS code has yet been created. It is relevant to hospital outpatient billing, reimbursement, and claims processing staff who need to understand the general CMS approach, the role of FDA approval timing, and how CMS framed its transitional methodology for these products.
Why This Topic Matters
Hospitals and billing teams need to know how CMS handled payment for newly approved products during the period before product-specific HCPCS codes were assigned. The article helps readers understand the broader claims-processing and payment context that affected outpatient reimbursement workflows.
Article Sections
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CMS payment policy for newly approved outpatient products
Introduces the Medicare modernization context and the basic CMS payment framework for outpatient drugs and biologicals before a permanent HCPCS code exists.
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Interim billing approach and claim processing
Describes CMS’s interim methodology for reporting newly approved products and the role of outpatient claim processing and manual pricing.
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Transition to permanent coding
Explains the shift away from the interim approach once a product-specific HCPCS code and payment status are established.
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Proposed expansion to radiopharmaceuticals
Summarizes CMS’s proposed extension of the same general methodology to additional outpatient product categories and the public comment process.
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Public comments and CMS response
Reviews stakeholder feedback on billing workflow, system handling, and claim processing, along with CMS’s response to those comments.
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Final rule language and implementation perspective
Covers CMS’s final-rule discussion, its stated rationale for the methodology, and broader guidance on monitoring newly approved products.
What You Will Learn
- How CMS addressed outpatient reimbursement for newly approved products before permanent coding was available.
- How the article frames the transition from interim billing practices to product-specific HCPCS coding.
- What kinds of operational and claims-processing concerns were raised during CMS’s rulemaking process.
- How CMS described the responsibilities of hospitals in monitoring and reporting newly approved products.
Who Should Read This
- Hospital outpatient billing staff
- Coding professionals
- Revenue cycle teams
- Reimbursement specialists
- Compliance staff
- Claims processing personnel
Codes Discussed
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