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Coverage Policy Number:
IP0251
Drug and Biologic Coverage Policy
Effective Date .......................................... 11/1/2023
Next Review Date… ................................... 11/1/2024
Coverage Policy Number ............................... IP0251
Compounded Medications
Table of Contents
Overview .............................................................. 1
Medical Necessity Criteria ................................... 2
Reauthorization Criteria ....................................... 2
Authorization Duration ......................................... 2
Conditions Not Covered ....................................... 2
Coding / Billing Information .................................. 5
Background .......................................................... 6
References .......................................................... 8
Related Coverage Resources
INSTRUCTIONS FOR USE
The following Coverage Policy applies to health benefit plans administered by Cigna Companies. Certain Cigna Companies and/or lines of
business only provide utilization review services to clients and do not make coverage determinations. References to standard benefit plan
language and coverage determinations do not apply to those clients. Coverage Policies are intended to provide guidance in interpreting
certain standard benefit plans administered by Cigna Companies. Please note, the terms of a customer’s particular benefit plan document
[Group Service Agreement, Evidence of Coverage, Certificate of Coverage, Summary Plan Description (SPD) or similar plan document] may
differ significantly from the standard benefit plans upon which these Coverage Policies are based. For example, a customer’s benefit plan
document may contain a specific exclusion related to a topic addressed in a Coverage Policy. In the event of a conflict, a customer’s benefit
plan document always supersedes the information in the Coverage Policies. In the absence of a controlling federal or state coverage
mandate, benefits are ultimately determined by the terms of the applicable benefit plan document. Coverage determinations in each specific
instance require consideration of 1) the terms of the applicable benefit plan document in effect on the date of service; 2) any applicable
laws/regulations; 3) any relevant collateral source materials including Coverage Policies and; 4) the specific facts of the particular situation.
Coverage Policies relate exclusively to the administration of health benefit plans. Coverage Policies are not recommendations for treatment
and should never be used as treatment guidelines. In certain markets, delegated vendor guidelines may be used to support medical
necessity and other coverage determinations.
Overview
This policy supports medical necessity review for Compounded Medications, including the following:
• Compounded naltrexone implants
• Non-FDA approved hormone pellets
o Compounded testosterone pellets
o Compounded estrogen and estrogen derivative pellets (for example, estradiol, estriol, estrone)
o Compounded progesterone and progesterone derivative pellets (for example, progestin)
Bulk chemicals used in compounded products do not meet the definition of a Prescription Drug in Cigna
standard benefit plans. All benefit plan exclusions also apply. Please refer to the applicable benefit plan
document to determine benefit availability and the terms and conditions of coverage.
Mixing, diluting, or repackaging an FDA approved pharmaceutical product as described in the label is
considered an approved manipulation of the product and is not subject to this coverage policy.
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Coverage Policy Number:
IP0251
Medical Necessity Criteria
Compounded Medications are considered medically necessary when ALL the following criteria are
met:
1. There is documentation the individual has had an inadequate response, contraindication, or is intolerant
to ALL FDA-approved commercially available pharmaceutical alternatives that require a prescription, and
approved for the same route of administration.
2. The compound must contain at least one FDA-approved prescription ingredient that is not otherwise
excluded in the plan benefit language.
3. Compounded drug products that are commercially available in the marketplace or that are essentially
copies of commercially available FDA-approved drug products must be a distinguishable variation that is
medically necessary for a particular patient.
4. The compound does not contain ingredients that have been removed from the market for safety or
efficacy reasons (refer to FDA Exemption List).
5. The compound contains only human, pharmaceutical grade ingredients.
6. Components of compound formula are safe and effective for the prescribed purpose as evidenced by
EITHER of the following (A or B):
A. Support from results of at least two different controlled clinical studies published in peer-
reviewed English language, biomedical journals or appropriate compendia, American Hospital
Formulary Service (AHFS)
B. The prescription ingredient’s FDA-approved indication
When coverage is available and medically necessary, the dosage, frequency, duration of therapy, and site of
care should be reasonable, clinically appropriate, and supported by evidence-based literature and adjusted
based upon severity, alternative available treatments, and previous response to therapy.
Reauthorization Criteria
Compounded Medications are considered medically necessary for continued use when initial criteria are met.
Authorization Duration
Initial approval duration is up to 12 months.
Reauthorization approval duration is up to 12 months.
Conditions Not Covered
Any other use is considered not medically necessary.
Compounded Hormone pellets are not FDA-approved and are considered experimental, investigational
or unproven for ANY use (this list may not be all inclusive):
1. Compounded testosterone pellets
2. Compounded estrogen and estrogen derivative pellets (for example, estradiol, estriol, estrone)
3. Compounded progesterone and progesterone derivative pellets (for example, progestin)
Compounded naltrexone implants are not FDA-approved and are considered experimental,
investigational, for unproven or ANY use.
The following medications are considered experimental, investigational, or unproven in any
compounded formulation for topical use because their use in compounds is not approved by the FDA
(this list may not be all inclusive):
Amantadine
Ketorolac
Amitriptyline
Levocetirizine
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Coverage Policy Number:
IP0251
Apomorphine
Mefenamic acid
Baclofen
Meloxicam
Carbamazepine
Methadone
Clomipramine
Mometasone furoate (including nasal irrigation
solutions)
Cyclobenzaprine
Morphine
Dexamethasone
Nabumetone
Duloxetine
Naltrexone
Diclofenac
Orphenadrine
Flurbiprofen
Oxycodone
Fluticasone propionate (including nasal irrigation
solutions)
Oxytocin
Fluoxetine
Papaverine
Gabapentin
Pentoxifylline
Human chorionic gonadotropin
Piroxicam
Hyaluronic acid
Promethazine
Hydrocodone
Sumatriptan
Hydromorphone
Tamoxifen
Ketamine
Tizanidine
Ketoprofen
Tramadol
APPENDIX
FDA EXEMPTION LIST
Per Code of Federal Regulations Title 21, Volume 4, Section 216.24, the following drug products were
withdrawn or removed from the market because such drug products or components of such drug
products have been found to be unsafe or not effective. The following drug products may not be
compounded under the exemptions provided by section 503A(a) or section 503B(a) of the Federal Food,
Drug, and Cosmetic Act:
Comments
All drug products containing adenosine phosphate
All drug products containing adrenal cortex
All drug products containing alatrofloxacin mesylate
All drug products containing aminopyrine
All drug products containing astemizole
All drug products containing azaribine
All drug products containing benoxaprofen
All drug products containing bithionol
All drug products containing bromfenac sodium (except ophthalmic
solutions)
All drug products containing bromocriptine mesylate for prevention of
physiological lactation
All parenteral drug products containing butamben
All drug products containing camphorated oil
All oral gel drug products containing carbetapentane citrate
All drug products containing iodinated casein
All drug products containing cerivastatin sodium
All oral drug products containing chloramphenicol
All tinctures of chlorhexidine gluconate formulated for use as a patient
preoperative skin preparation.
All drug products containing chlormadinone acetate
All drug products containing chloroform
All drug products containing cisapride
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Coverage Policy Number:
IP0251
Comments
All drug products containing cobalt salts (except radioactive forms of
cobalt and its salts and cobalamin and its derivatives).
All drug products containing dexfenfluramine hydrochloride
All drug products containing diamthazole dihydrochloride
All drug products containing dibromsalan
All oral and parenteral drug products containing 25 milligrams or more
of diethylstilbestrol per unit dose.
All drug products containing dihydrostreptomycin sulfate.
All drug products containing dipyrone
All drug products containing encainide hydrochloride
All parenteral dosage form drug products containing esmolol
hydrochloride that supply 250 milligrams/milliliter of concentrated
esmolol per 10-milliliter ampule
All drug products containing etretinate
All drug products containing fenfluramine hydrochloride
All drug products containing flosequinan
All drug products containing gatifloxacin (except ophthalmic solutions)
All intravenous drug products containing gelatin
All drug products containing iodinated glycerol
All drug products containing chorionic gonadotropins (of animal origin)
All drug products containing grepafloxacin
All drug products containing mepazine hydrochloride or mepazine
acetate
All drug products containing metabromsalan
All parenteral drug products containing methamphetamine
hydrochloride
All drug products containing methapyrilene
All drug products containing methopholine
All drug products containing methoxyflurane
All drug products containing mibefradil dihydrochloride
All drug products containing nitrofurazone (except topical drug
products formulated for dermatalogic application).
All drug products containing nomifensine maleate
All drug products containing novobiocin sodium
All intravenous drug products containing greater than a 16 milligram
single dose of ondansetron hydrochloride
All drug products containing oxyphenisatin
All drug products containing oxyphenisatin acetate
All drug products containing pemoline
All drug products containing pergolide mesylate
All drug products containing phenacetin
All drug products containing phenformin hydrochloride
All drug products containing phenylpropanolamine
All drug products containing pipamazine
sodium chloride, sodium
bicarbonate, potassium
All drug products containing polyethylene glycol 3350, sodium chloride,
sodium bicarbonate, and potassium chloride for oral solution, and 10
milligrams or more of bisacodyl delayed-release tablets.
All drug products containing potassium arsenite
All solid oral dosage form drug products containing potassium chloride
that supply 100 milligrams or more of potassium per dosage unit
(except for controlled-release dosage forms and those products
formulated for preparation of solution prior to ingestion)
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Coverage Policy Number:
IP0251
Comments
All intravenous drug products containing povidone
All drug products containing propoxyphene
All drug products containing rapacuronium bromide
All oral dosage form drug products containing more than 1 milligram of
reserpine
All drug products containing rofecoxib
All drug products containing sibutramine hydrochloride
All drug products containing sparteine sulfate
All drug products containing sulfadimethoxine
All drug products containing sulfathiazole (except those formulated for
vaginal use)
All drug products containing suprofen (except ophthalmic solutions)
All drug products containing sweet spirits of nitre
All drug products containing tegaserod maleate
All drug products containing temafloxacin
All drug products containing terfenadine
All drug products containing 3,3',4',5-tetrachlorosalicylanilide
All liquid oral drug products formulated for pediatric use containing
tetracycline in a concentration greater than 25 milligrams/milliliter.
All drug products containing ticrynafen
All drug products containing tribromsalan
All aerosol drug products intended for inhalation containing
trichloroethane
All drug products containing troglitazone
All drug products containing trovafloxacin mesylate
All drug products containing urethane
All drug products containing valdecoxib
All aerosol drug products containing vinyl chloride
All aerosol drug products containing zirconium
All drug products containing zomepirac sodium
*current as of April 6, 2020
Coding / Billing Information
Considered Medically Necessary when criteria in the applicable policy statements listed above are met:
Note: Compounded products are typically covered under pharmacy benefit plans. Certain prescription drugs
require an authorization for coverage to ensure that appropriate treatment regimens are followed. Medical drug
coding and diagnosis codes, however, are generally not required for pharmacy claims submissions. The
following drugs require medical drug coding and are listed as follows:
Note:
1) This list of codes may not be all-inclusive.
2) Deleted codes and codes which are not effective at the time the service is rendered may not be eligible
for reimbursement.
Considered Experimental/Investigational/Unproven when used to report subcutaneous implantation of
compounded hormone pellets:
CPT
®
*
Codes
Description
11980
Subcutaneous hormone pellet implantation (implantation of estradiol and/or testosterone pellets
beneath the skin)
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Considered Experimental/Investigational/Unproven when used to report subcutaneous implantation of
Naltrexone pellets:
CPT
®
*
Codes
Description
17999
Unlisted procedure, skin, mucous membrane and subcutaneous tissue
Considered Experimental/Investigational/Unproven when used to report compounded testosterone
pellets, estrogen/estrogen derivative pellets, or progesterone/progestin pellets or Naltrexone pellets:
HCPCS
Codes
Description
J3490
Unclassified drugs
J3590
Unclassified biologics
J7999
Compounded drug, not otherwise classified
*Current Procedural Terminology (CPT®) ©2021 American Medical Association: Chicago, IL.
Background
Overview
A federal legend drug is one which has been approved by the FDA and requires a prescription by a licensed
physician or other licensed health care provider.
The FDA defines traditional compounding as a practice in which a licensed pharmacist, a licensed physician, or,
in the case of an outsourcing facility, a person under the supervision of a licensed pharmacist, combines, mixes,
or alters ingredients of a drug to create a medication tailored to the needs of an individual patient. Combining
two drugs is considered compounding.
Occasionally patients need an alternative to an FDA-approved medication, for example inability to swallow a
solid dosage form, or allergy or sensitivity to certain excipients or dyes. Compounded drugs are not FDA-
approved. This means that FDA does not verify the safety, or effectiveness of compounded drugs. Consumers
and health professionals rely on the drug approval process to ensure that drugs are safe and effective and made
in accordance with Federal quality standards. Compounded drugs also lack an FDA finding of manufacturing
quality before such drugs are marketed. There can be health risks associated with compounded drugs that do
not meet federal quality standards. Compounded drugs made using poor quality practices may be sub- or
super-potent, contaminated, or otherwise adulterated. Additional health risks include the possibility that patients
will use ineffective compounded drugs instead of FDA-approved drugs that have been shown to be safe and
effective.
The Pharmaceutical Compounding Quality and Accountability Act of 2013 establishes a clear boundary between
traditional compounders and compounding manufacturers which make sterile products without or in advance of a
prescription and sell those products across state lines. This act grants certain exemptions to traditional
compounders, and compounding manufacturers that meet certain requirements, while giving the FDA more
regulatory power over compounding manufacturers.
Professional Societies/Organizations
Compounded Hormone Products
American College of Obstetricians and Gynecologists
The American College of Obstetricians and Gynecologists’ Committee on Gynecologic Practice and the Practice
Committee of the American Society for Reproductive Medicine published the following recommendations.
Clinical evidence is lacking to support superiority claims of compounded bioidentical hormones over conventional
menopausal hormone therapy. Customized compounded hormones pose additional risks. These preparations
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have variable purity and potency and lack efficacy and safety data. Because of variable bioavailability and
bioactivity, both underdosing and overdosing are possible. Conventional hormone therapy is preferred over
compounded hormone therapy given the available data. Despite claims to the contrary, evidence is inadequate
to support increased efficacy or safety for individualized hormone therapy regimens based on salivary, serum, or
urinary testing. (ACOG, 2016)
North American Menopause Society
In their Menopause Position Statement, The North American Menopause Society (NAMS) cites the health risks
associated with use of custom compounded bio-identical hormone therapy. NAMS states that in the majority of
individuals, an FDA approved hormone replacement is sufficient and avoids the risks associated with
compounded preparations. The organization further states it only recommends compounded estrogen
replacement therapy in order to avoid allergic reactions to ingredients in FDA approved products. (NAMS, 2013)
The Endocrine Society
The Endocrine Society has commented that no published studies in peer-reviewed literature demonstrate
compounded bio-identical hormone products are more safe or efficacious than FDA approved products. The
organization also calls attention to the lack of quality control and safety and efficacy data for compounded
preparations. The Society recommends treatment with FDA approved products and does not recommend use of
compounded hormone formulations. (Stuenkel, 2015; Santen, 2010)
Compounded Naltrexone Products
American Society of Addiction Medicine and Substance Abuse and Mental Health Services
Administration
Guidelines published by American Society of Addiction Medicine and Substance Abuse and Mental Health
Services Administration do not address naltrexone implants. (Kampman, 2015)
World Federation of Societies of Biological Psychiatry
The World Federation of Societies of Biological Psychiatry (WFSBP) guidelines for the biological treatment of
substance use and related disorders, do not recommend naltrexone implants stating, although promising,
concerns of safety require further need of evaluation. (Soyka, 2011)
Compendia and Other Published Clinical Studies
Compounded Implantable Hormones
Hormone therapy (HT) or hormone replacement therapy (HRT) includes the use of estrogen and/or progestin for
vasomotor symptoms and/or vulvular and vaginal atrophy associated with menopause. Progestin products are
also used in combination with estrogen to prevent endometrial hyperplasia in nonhysterectomized
postmenopausal women. There are no FDA approved implantable estrogen and/or progesterone hormone
pellets. Testosterone products are not FDA approved for use in women and are not recommended for hormone
replacement therapy. (Goodman, 2011 and NAMS, 2013, 2017)
The term “bio-identical” has no defined meaning in any medical or conventional dictionary, and FDA does not
recognize the term. Some compounders market compounded bioidentical hormone replacement therapy (BHRT)
products as superior to FDA-approved drugs by making assertions that they are more natural or safer or better
for patients than FDA-approved drug products. However, compounded BHRT products are not FDA-approved,
which means these products have not undergone an FDA assessment of quality, safety, effectiveness and
bioavailability (the extent and rate at which the drug enters the body). The FDA announced that the National
Academies of Science, Engineering & Medicine (NASEM) will conduct research to help inform the public and the
agency’s policies regarding compounded drugs. NASEM will provide a report evaluating the available scientific
evidence relating to the safety and effectiveness of BHRT products. (FDA, 2018)
Compounded Naltrexone Implants
A systematic review and meta-analysis of naltrexone implants to treat opioid addiction states there is sparse
evidence for the safety and efficacy of naltrexone implants and what available evidence exists is of moderate to
very low quality. The authors conclude that naltrexone implants should only be used in a clinical trial setting, until
more data becomes available supporting the safety and efficacy of this delivery system. (Larney, 2014)
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References
1. American College of Obstetricians and Gynecologists (ACOG). Committee on Gynecologic Practice and the
American Society for Reproductive Medicine Practice Committee. Available at
https://www.acog.org/clinical/clinical-guidance/committee-opinion/articles/2012/08/compounded-bioidentical-
menopausal-hormone-therapy?utm_source=redirect&utm_medium=web&utm_campaign=otn. Accessed
August 8, 2022.
2. Food and Drug Administration (FDA) Drug Safety Communication: FDA announces new and expanded
compounding research projects. Last updated September 26, 2018. Available at
https://www.fda.gov/drugs/drug-safety-and-availability/fda-announces-new-and-expanded-compounding-
research-projects. Accessed August 8, 2022.
3. Goodman NF, Cobin RH, Ginzburg SB, et al. American Association of Clinical Endocrinologists (AACE)
Medical guidelines for clinical practice for the diagnosis and treatment of menopause. Endocr Pract. 2011;
17(Supp 6):1-25.
4. Kampman K, Jarvis M. American Society of Addiction Medicine (ASAM) National Practice Guideline for the
Use of Medications in the Treatment of Addiction Involving Opioid Use. J Addict Med 2015;9: 1–10.
5. Larney S, Gowing L, Mattick RP, et al. A systematic review and meta-analysis of naltrexone implants for the
treatment of opioid dependence. Drug Alcohol Rev. 2014;33(2):115-128.
6. Santen RJ, Allred DC, Ardoin SP, et al. Postmenopausal Hormone Therapy: An Endocrine Society Scientific
Statement. The Journal of Clinical Endocrinology & Metabolism. 2010; 95(Supp 1):S1-S66.
7. Soyka M, Kranzler HR, et al. The World Federation of Societies of Biological Psychiatry (WFSBP) guidelines
for the biological treatment of substance use and related disorders. Part 2: Opioid dependence. World J Biol
Psychiatry. 2011 Apr;12(3):160-87.
8. Stuenkel C, Davis S, Gompel A, et al. Treatment of Symptoms of the Menopause: An Endocrine Society
Clinical Practice Guideline. J Clin Endocrinol Metab. November 2015; 100(11):3975-4011. Accessed April 8,
2020.
9. The North American Menopause Society (NAMS). Management of Symptomatic Vulvovaginal Atrophy: 2013
Position Statement of The North American Menopause Society. Menopause. 2013;20(9): 888-902.
10. The North American Menopause Society (NAMS). The 2017 hormone therapy position statement of
The North American Menopause Society. Menopause. 2017 Jul;24(7):728-753.
11. The United States Pharmacopeia and National Formulary. Accessed 4/8/2020. Available at
http://www.usp.org/usp-nf
12. U.S. Department of Health and Human Services Food and drug Administration (FDA). Human Drug
Compounding. Accessed 7/2/2021. Available at
https://www.fda.gov/Drugs/GuidanceComplianceRegulatoryInformation/PharmacyCompounding/default.htm
13. U.S. Department of Health and Human Services Food and Drug Administration (FDA). Code of Federal
Regulations Title 21, Volume 4, Section 216.24. October 7, 2016. Accessed August 8, 2022. Available at
https://www.ecfr.gov/cgi-bin/text-
idx?SID=715ff7091a6270261afcbb61293c64c2&mc=true&node=pt21.4.216&rgn=div5#se21.4.216_124.
14. U.S. Department of Health and Human Services Food and Drug Administration (FDA). Compounding
Quality Act, Title 1 of the Drug Quality and Security Act of 2013. January, 2017. Accessed August 8, 2022.
Available at https://www.congress.gov/bill/113th-congress/house-bill/3204.
15. U.S. Department of Health and Human Services Substance Abuse and Mental Health Services
Administration Center for Substance Abuse Treatment, Division of Pharmacologic Therapies. Clinical Use of
Extended-Release Injectable Naltrexone in the Treatment of Opioid Use Disorder- A Brief Guide. Revised
February 2, 2015. Rockville, MD. Available at http://store.samhsa.gov/shin/content/SMA14-4892R/SMA14-
4892R.pdf.
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