MedicaidBilling CodesMedium impact
Compound Drug Billing
Illinois Medicaid - HFS·IL · Pharmacy·Provider Notice
Effective date
Aug 10, 2011
We identified it
Jun 21, 2026
Summary
Illinois Medicaid has issued a notice prohibiting pharmacies from inappropriately billing non-compound drugs as compound drugs. Only pharmaceutical products that result from combining, mixing, or altering two or more ingredients (excluding flavorings) to create customized medications can be billed as compound drugs.
Action Required
Immediately: Billing team must review all compound drug billing to ensure compliance with Illinois Medicaid definition. Only bill as compound drugs when two or more ingredients are actually combined, mixed, or altered prior to dispensing. Stop billing separate drug/diluent combinations or multiple strengths of same drug as compound unless mixed before dispensing. Non-compliant billing may result in audit findings.