Determining Drug Coverage for Original Medicare
                     
Determining Drug Coverage for Original Medicare
Determining Medicare Drug Coverage
While billing for Skilled Nursing Facility (SNF) or for hospital billing, billers always make the mistake of 
considering the wrong Medicare drug coverage. For example, Medicare Part A and Part B generally do not 
cover outpatient prescription drugs, most of which are covered under Part D. In this article, we shared an 
excerpt from a CMS document, which will act as a basic tool to assist you in understanding Medicare drug 
coverage determinations under Part A, Part B and Part D of Medicare, and to clarify coverage for specific Part 
D products/drugs/categories. 
We also shared billing scenarios, which will help you to determine which part of Medicare covers a drug in a 
particular situation, assuming all other requirements are met, e.g., a drug must still be medically necessary to 
be covered. This information is applicable to people in the Original Medicare Plan. People who have a 
Medicare Advantage HMO or PPO Plan with prescription drug coverage get all their Medicare-covered health 
care from the plan, including prescription drugs.
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Determining Drug Coverage for Original Medicare
Part A Hospital Insurance
People with Medicare who are inpatients of hospitals or skilled nursing facilities (SNF) during covered stays may 
receive drugs as part of their treatment. Medicare Part A payments made to hospitals and skilled nursing 
facilities generally cover all drugs provided during a stay. Under the Medicare hospice benefit, people receive 
drugs that are medically necessary for symptom control or pain relief. Part B can pay hospitals and SNFs for most 
categories of Part B-covered drugs if a person does not have Part A coverage, if Part A coverage for the stay has 
run out, or if a stay is not covered.
Part B Medical Insurance 
Medicare Part B covers a limited set of drugs. Medicare Part B covers injectable and infusible drugs that are not 
usually self-administered and that are furnished and administered as part of physician service. If the injection is 
usually self-administered (e.g., Imitrex) or is not furnished and administered as part of a physician’s service, it 
may not be covered by Part B. Medicare Part B also covers a limited number of other types of drugs as shown in 
the attached chart.1 (Regional differences in Part B drug coverage policies can occur in the absence of a national 
coverage decision.
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Determining Drug Coverage for Original Medicare
Part D Prescription Drug Insurance
Part D-covered drugs are defined as: drugs available only by prescription, used and sold in the United States, 
and used for a medically accepted indication; biological products; insulin; and vaccines. The definition also 
includes medical supplies associated with the injection of insulin (syringes, needles, alcohol swabs, and gauze). 
Certain drugs or classes of drugs, or their medical uses, are excluded by law from Part D coverage. While these 
drugs or uses are excluded from basic Part D coverage, drug plans may choose to include them as part of 
supplemental benefits, not covered by Medicare.
Medicare Drug Coverage Scenarios
Here below we shared billing scenarios, which would help you to determine which part of Medicare covers a 
drug in a particular situation (assuming all other requirements are met, e.g., a drug must still be medically 
necessary to be covered): 
• If Medicare is covering beneficiary’s stay in a hospital or skilled nursing facility, their drugs will be paid for
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Determining Drug Coverage for Original Medicare
• under Medicare Part A. Part A will stop paying for the drugs when patients leave the hospital or skilled 
nursing facility or when their benefit runs out, whichever comes first.  
• If a beneficiary is in a Medicare-approved hospice program, Medicare Part A will pay for drugs for symptom 
control or pain relief. However, Medicare is not permitted to pay for prescriptions intended to treat the 
terminal illness. If the beneficiary joins a Medicare prescription drug plan (Part D), drugs unrelated to the 
terminal illness would be covered by that plan. For instance, if they need medicine to treat an infection 
unrelated to the terminal illness, it would be covered by the beneficiary’s Medicare prescription drug plan 
(Part D). 
• If the drugs are currently covered by Part B, they will continue to be covered by Part B. Beneficiary might 
join a Medicare drug plan (Part D) to help pay for other drugs that which beneficiary might be taking that 
are not currently covered by Part B. 
• If a beneficiary is living in a long-term care facility, any medications they receive under the DME benefit 
such
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Determining Drug Coverage for Original Medicare
• such as nebulizer drugs for lung disease will no longer be covered since that benefit by law is only for 
services delivered in the home. If they have Medicare prescription drug coverage (Part D), their plan may 
cover those prescriptions. For this purpose, long-term care facilities include skilled nursing facilities (after 
Part A coverage is exhausted or for stays not covered by Medicare), nursing homes that give skilled care, 
and institutions that give skilled care.
MBC is a leading revenue cycle company providing complete medical billing services. We shared applicable 
billing information on drug coverage for original Medicare for provider education purposes. To know more 
about ‘Medicare Drug Coverage Under Part A, Part B, and Part D’ you can refer to the CMS document. For any 
assistance required for Medicare billing, contact us at [email protected]/ 888-357-3226
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