This information is provided for administrative, clinical, and billing staff working in our office or clinic.

The Deficit Reduction Act of 2005 (DRA) requires states to collect rebates for physician-administered drugs. As a result, states must collect the 11-digit NDC on all outpatient claims for drugs administered during the course of a patient's clinic visit. Providers are required to submit their claims with the exact NDC that appears on the product administered. The NDC is found on the medication's packaging and must be submitted in the 5-4-2 digit format (i.e., xxxxx-xxxx-xx). MassHealth's coverage and pricing procedures have not changed for medications administered in the clinical setting.

Please see the following section for answers to the most common questions. If you have further questions or concerns about this information, please contact MassHealth Customer Service at 1-800-841-2900, or e-mail your inquiry to providersupport@mahealth.net.

NDC and HCPCS Frequently Asked Questions

  1. Why do I have to bill with national drug codes (NDCs) in addition to Healthcare Common Procedure Coding System (HCPCS) codes?
  2. What is the Drug Rebate Program?
  3. What is an NDC?
  4. Do I need to include units for both the HCPCS code and the NDC?
  5. Are the HCPCS code units different from the NDC units?
  6. If the physician administered a vial of medication to a patient, do I bill the NDC units in grams, milliliters, or units?
  7. Where do I find information on how to add the NDC information to claims?
  8. If I am not sure which NDC was used, can I pick another NDC under the J Code and bill with it?
  9. Do drugs that are billed through a hospital outpatient department require NDC information?
  10. Do radiopharmaceuticals or contrast media require NDC information?
  11. Do vaccines/immunizations require NDC information?
  12. Are Medicare claims included in the NDC requirement?
  13. Do dentists need to bill with both HCPCS codes and NDC numbers?
  14. Do I bill the HCPCS code and NDC of a drug if I did not provide the drug, but just administered it?
  15. How should I bill for a drug when only a partial vial was administered?
  16. My clinic participates in the 340B program. Do I need to submit NDC codes for drug claims?
  17. I have heard that only single-source drugs and 20 multiple source drugs will require rebates. Can I just submit NDCs for just those drugs?
  18. Which drug claims from renal dialysis clinics require NDC information?


1. Why do I have to bill with national drug codes (NDCs) in addition to Healthcare Common Procedure Coding System (HCPCS) codes?

The Deficit Reduction Act of 2005 (DRA) includes provisions about the state collection of data for the purpose of collecting Medicaid drug rebates from drug manufacturers for physician-administered drugs. Since there are often several NDCs linked to a single HCPCS code, the Centers for Medicare & Medicaid Services (CMS) deems that the use of NDC numbers is critical to correctly identify the drug and manufacturer in order to invoice and collect the rebates.

2. What is the Drug Rebate Program?

The Medicaid Drug Rebate Program was created by the Omnibus Budget Reconciliation Act of 1990 (OBRA '90) and became effective January 1, 1991. The law requires drug manufacturers to enter into an agreement with CMS to provide rebates for their drug products that are paid for by Medicaid. Outpatient Medicaid pharmacy providers have billed with NDCs and requested rebates since 1991. The DRA expanded the rebate requirement to physician-administered drugs.

3. What is an NDC?

The NDC is a universal number that identifies a drug. The NDC number consists of 11 digits in a 5-4-2 format. The first five digits identify the manufacturer of the drug and are assigned by the Food and Drug Administration. The remaining digits are assigned by the manufacturer and identify the specific product and package size.

Some packages will display fewer than 11 digits, but leading zeroes can be assumed and need to be used when billing. For example:

XXXX-XXXX-XX = 0XXXX-XXXX-XX
XXXXX-XXX-XX = XXXXX- 0XXX-XX
XXXXX-XXXX-X = XXXXX-XXXX- 0X

The NDC is found on the drug container (i.e., vial, bottle, or tube).

Please Note: The NDC submitted to MassHealth must be the actual NDC number on the package or container from which the medication was administered (with any necessary leading zeros applied). Do not bill for one manufacturer's product and dispense another.

4. Do I need to include units for both the HCPCS code and the NDC?

Yes. However, the state's federally mandated rebate program is based on the NDC and the related units. Please refer to the applicable billing and companion guides for specifics as they relate to your practice.

5. Are the HCPCS code units different from the NDC units?

Yes. Use the HCPCS code and service units as you have in the past. This is the basis for your reimbursement. NDC units are based upon the numeric quantity administered to the patient and the unit of measurement. The unit of measurement (UOM) codes are

F2 = International Unit

GR = Gram

ME = Milligram

ML = Milliliter

UN = Unit (each)

The actual metric decimal quantity administered and the units of measurement are required for billing. If reporting a fraction, use a decimal point. Example: If three 0.5-ml vials are dispensed, the correct NDC unit is 1.5 ml.

6. If the physician administered a vial of medication to a patient, do I bill the NDC units in grams, milliliters, or units?

Use the following as a guideline.

  • If a drug comes in a vial in powder form and has to be reconstituted before administration, then bill each vial (unit/each) used (UN).
  • If a drug comes in a vial in a liquid form, bill in milliliters (ML).
  • Grams (GR) are usually used when an ointment, cream, inhaler, or bulk powder are dispensed. This unit of measure is primarily used in the retail pharmacy setting and not for physician-administered drug billing.
  • International units are mainly used when billing for Factor VIII-Antihemophilic Factors (F2).

Examples:

  1. A patient received 4 mg Zofran IV in the physician's office. The NDC you used was 00173-0442-02, which is Zofran 2 mg/ml in solution form. There are 2 ml per vial. You would bill J2405 (ondansetron hydrochloride, per 1 mg) with 4 HCPCS units, and since this drug comes in a liquid form, you would bill the NDC units as 2 mls (ML2).
  2. A patient received 1 gr of Rocephin IM in the physician's office. The NDC of the product used was 00004-1963-02, which is Rocephin 500 mg vial in a powder form that you needed to reconstitute before the injection. You would bill J0696 (ceftriaxone sodium, per 250 mg) with 4 HCPCS units. And since this drug comes in powder form, you would bill the NDC units as 2 units (also called 2 each) (UN2).

Please Note: NDCs listed above have hyphens between the segments for easier visualization. When submitting NDCs on claims, submit as a number with no hyphens or spaces between segments. Be sure to include any leading zeros to maintain the 5-4-2 configuration.

7. Where do I find information on how to add the NDC information to claims?

Please refer to the applicable billing and companion guides for specifics as they relate to your practice.

 

8. If I am not sure which NDC was used, can I pick another NDC under the J Code and bill with it?

No. The NDC submitted to MassHealth must be the actual NDC number on the package or container from which the medication was administered.

9. Do drugs that are billed through a hospital outpatient department require NDC information?

It depends.

This requirement to include an NDC does not apply to hospital claims that are paid as part of a bundled rate, such as the claims paid through the bundled hospital payment amount per episode (PAPE), or the global payment rate for renal dialysis clinics. The requirement applies to professional claims, including Medicare crossover claims.

Effective September 15, 2008, MassHealth requires that institutional claims (for a drug identified on the claim with a Level II HCPCS code as part of an outpatient hospital service) must be billed with an NDC, NDC units, and appropriate descriptors. This requirement includes claims from acute hospitals from other states, and chronic disease and rehabilitation hospitals.

10. Do radiopharmaceuticals or contrast media require NDC information?

Not at this time. 

11. Do vaccines/immunizations require NDC information?
 

No. Vaccines do not require NDC information.
 

12. Are Medicare claims included in the NDC requirement?
 

Yes. Providers are required to submit NDC information, including the NDC, NDC units, and unit descriptor on claims billed to Medicare for dually eligible members (Medicare and MassHealth), when billing for Level II HCPCS for physician-administered drugs.  The NDC information will be included on Medicare crossover claims transmitted to MassHealth from the coordination of benefits contractor (COBC).

13. Do dentists need to bill with both HCPCS codes and NDC numbers?
 

No. The use of NDCs with HCPCS codes is not applicable to dentists.

14. Should I bill the HCPCS code and NDC of a drug if I did not provide the drug, but just administered it?
 

No. For example, if a patient brings an allergy extract from his allergist to have the family physician administer it, the family physician may not bill for the drug. The family physician should bill for only the administration of the drug. The allergist should bill for the drug component.

15. How should I bill for a drug when only a partial vial was administered?
 

Bill using the HCPCS code with the corresponding units administered. When calculating the NDC units, the HCPCS code units should be converted to the NDC units, using the proper decimal units.

For example:

If the previously mentioned patient (see Question 6) received only 2 mg of Zofran and you used the same NDC, which is Zofran 2 mg/ml in a 2-ml vial, the billing would look like this:

HCPCS J2405 (ondansetron hydrochloride, per 1 mg) 2 units

NDC 00173044202 ML1

16. My clinic participates in the 340B program. Do I need to submit NDC codes for drug claims?

Yes. Effective January 1, 2012, MassHealth expanded the requirement to include NDC information from providers participating in the 340B program when they submit claims for all drugs administered in an office or clinic setting. Providers must also add “Modifier UD” with the HCPCS code to indicate that the drug was purchased through the 340B program.

Please refer to the applicable billing and companion guides for specifics as they relate to your practice.


17. I have heard that only single-source drugs and 20 multiple source drugs will require rebates. Can I submit NDCs for just those drugs?
 

No. At this time, states are mandated to submit rebates on 20 drugs, but they are encouraged to expand their rebate program beyond that and MassHealth intends to do so.

The "mandatory 20" will change yearly to simplify billing for providers and processing for MassHealth claims. All physician-administered medications will require submission of NDCs.

Please Note: Some products not traditionally considered drugs are included in those mandated for rebate (for example, J7050 Infusion, normal saline, 250 cc), so don't overlook these products when submitting NDCs.

 


18. Which drug claims from renal dialysis clinics require NDC information?
 

If the renal dialysis clinic billed for a drug using a Level II HCPCS, the NDC information is required, starting January 1, 2008. If the drug is covered as part of a global payment, the NDC information is not required.

On January 1, 2011, Medicare implemented global payment for renal dialysis clinics. As a result, NDC information is not needed for Medicare claims for dually eligible members (Medicare and MassHealth) on subsequent dates.

On December 1, 2011, MassHealth implemented global payments for renal dialysis clinics. As a result, NDC information is not needed for MassHealth claims on subsequent dates.

 

 

This information is provided by MassHealth.