Claims for Bulk Powder Compound Drugs to be Denied, Effective Feb. 1, 2015

October 30, 2014

Effective Feb. 1, 2015, Blue Cross and Blue Shield of Texas (BCBSTX) will implement changes to their current claims system edits that will enhance BCBSTX’s ability to identify compound drugs formulated using bulk powders. Please be advised that, for dates of service on or after Feb. 1, 2015, claims submitted to BCBSTX for compounded drug products using bulk powders will be denied, in accordance with our Medical Policy. As of this effective date, independently contracted BCBSTX providers will receive a message on their Electronic Payment Summary (EPS) or Provider Claim Summary (PCS), as follows:

“Services for Bulk Powder or Compound Drugs are considered experimental, investigational, or unproven and not covered under the member's benefit plan. This is a contracted provider; the member is not responsible for payment of these charges.”

BCBSTX periodically conducts claim reviews to help ensure that we are paying only for services that are included in our members’ and groups’ benefit packages, as well as within our corporate guidelines and Medical Policies. Additionally, an increasing number of claims for compounded drug products have been identified that do not meet our exception criteria for coverage under BCBSTX Medical Policy.

To locate Medical Policies, click on the Standards & Requirements tab, then Medical Policy Section, select “Active and Pending Medical Policies.” After reading the Medical Policies Disclaimer, click on “I agree” enter in the search box Compounded Drug Products to review in its entirety.


  • Compounded medications formulated from bulk powder compounds are not covered prescription drugs because they are not drug products approved under Section 505, 505(j), or 507 of the Federal Food Drug and Cosmetic Act. Compounds that utilize non-bulk, FDA-approved products may be considered for coverage (for example, tablets or capsules). Compounded medications using FDA-approved medications are considered “traditional” compounds when used for FDA-approved
  • indications.
  • Physicians should ask their wholesalers whether products being used are considered a bulk chemical powder before submitting claims.


Compound drugs formulated using commercially available FDA-approved compound drugs will continue to be covered.

For additional information, such as limited exceptions, please refer to the article in our October 2014 Blue Review titled, “Compound Medications May Warrant Dose of Caution.” Also refer to the BCBSTX Compounded Drug Products Medical Policy (RX501.063), which is available in the Standards and Requirements/Medical Policy section.