Medicare AdvantageCoverageMedium impact
Compounded Medications (Revised)
Humana·Pharmacy·Medicare Advantage
Effective date
Jan 1, 2021
We identified it
Jun 25, 2026
Summary
Humana Medicare Advantage has updated its compounded medications policy (effective 1/1/2021, revised 7/23/2025) to clarify coverage criteria for compounded drugs that reject with error codes 307 or 524. Coverage requires: (1) rejection with specific error codes, (2) medication meets Part D drug definition with compendia support, and (3) compounded in a compendia-supported dosage form. Billing teams must screen compounded medication claims against the exclusion list and route non-compliant claims for clinical pharmacy review.
Action Required
Effective immediately: (1) Billing team must identify all compounded medication claims that generate error code 307 (non-specific NDC compounds excluded) or error code 524 (NonFormulary Drug) in the pharmacy billing system. (2) Before processing payment or issuing denial, verify the compounded medication meets ALL three criteria: rejects with 307/524, contains at least one Part D drug ingredient with compendia support, and uses a compendia-supported dosage form. (3) Cross-reference compounded ingredient lists against the exclusion list (amantadine hcl, baclofen, budesonide ER, clompiramine hcl, cyclobenzaprine hcl, diclofenac ER, duloxetine hcl, gabapentin, hydrocortisone butyrate solution, ibuprofen, ketoprofen, lamotrigine, meloxicam, orphenadrine ER, piroxicam, tizanidine hcl, topiramate, tramadol hcl in topical forms) and in dosage forms Blank, 2-ointment, 3-cream, 13-lotion, 14-shampoo; these automatically reject as 307 unless approved. (4) For compounds not on the automatic rejection list that still reject with 307 or 524, route to Humana Clinical Pharmacy Review for compendia support verification before denying. (5) Pharmacy staff: do not apply balance billing to beneficiaries for non-Part D ingredients. (6) Update billing software routing rules to flag compounded medications for automated compendia validation or manual review queue. Failure to verify Part D eligibility and compendia support before denial will result in improper claim denials and potential appeals.