Hospitals to receive 95% of AWP on uncoded Rx

The CMS has advised Medicare contractors about how to pay for drugs approved by the Food and Drug Administration that have yet to be assigned a billing code. The instructions carry out a provision in last year's Medicare reform law that authorizes payments for approved drugs and biologicals retroactive to Jan. 1, 2004. The CMS' instructions create a new code hospitals can use to receive payment for FDA-approved drugs that are not yet billable under a designated code. "We are closing the gap between FDA approval and Medicare payment for new drugs," CMS Administrator Mark McClellan said in a news release. Hospitals will be paid 95% of the average wholesale price for drugs in the new category. -- by Jeff Tieman