Federal rules require state Medicaid agencies to collect rebates on physician-administered drugs. To identify the correct manufacturer states must collect
- The 11- digit National Drug Code (NDC) on drugs administered
- Other NDC information as part of an outpatient visit (i.e. NDC units and descriptors)
This information is not found on Healthcare Common Procedure Coding System (HCPCS) codes that are generally used for billing by physicians.
NDC reporting requirements
States must collect NDCs on outpatient claims for drugs administered during the course of a patient's outpatient clinic visit. You need to submit claims with the exact NDC that appears on the product administered . Since there are often several NDCs linked to a single HCPCS code, the use of NDC numbers is critical to correctly identify the drug and manufacturer.
You need to submit NDC (NDC, NDC units, and appropriate descriptors) when billing for certain claims paid by a HCPCS Level ll code for physician-administered drugs. This requirement is in addition to the HCPCS used for billing the claim.
The claim can be denied if the NDC information is not included on the following types of claims:
- Professional claims
- Chronic disease and rehabilitation hospital claims
- Medicare crossover claims in the categories above
- Drugs purchased through the 340B program in the categories above. Note: Providers must also add "Modifier UD" with the HCPCS code to indicate that the drug was purchased through the 340B program.
You do not need to submit NDC information for
- Contrast media
- Vaccines or immunizations
- Claims that are paid as a part of a bundled rate
- For example, claims paid through the bundled hospital adjudicated payment per episode of care (APEC) or global payment rate for renal dialysis clinics.
- Drugs administered by dentists
The NDC is on the medication's container (i.e. vial, bottle, or tube). Submit the NDC in its 5-4-2 digit format: XXXXX-XXXX-XX.
The first five digits
- Are assigned by the Food and Drug Administration
- Identify the manufacturer of the drug
The remaining digits
- Are specific to the drug itself
- Identify the specific product and package size
Some packages may display fewer than 11 digits. In this case, put zeros in in the proper position in front of the existing numbers when billing.
XXXX-XXXX-XX is 0XXXX-XXXX-XX
XXXXX-XXX-XX is XXXXX-0XXX-XX
XXXXX-XXXX-X is XXXXX-XXXX-0X
Please note: For ease of reading, this page shows NDCs with hyphens between the segments. When submitting NDCs you must submit them as numbers without hyphens or spaces.
NDC units are different from HCPCS code units. Use the HCPCS code and service units as you have in the past. This is the basis for your reimbursement. NDC units are based on 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 3 0.5-ml vials are dispensed, the correct NDC unit is 1.5 ml.
Calculating units of vial medications
If you the clinician administered a vial of medication to a patient, use the following as a billing guideline:
- If a drug comes in a vial in powder form and you must reconstitute it before administration, then bill each vial (unit/each) used (UN).
- If a drug comes in a vial as a liquid, bill in milliliters (ML).
- Grams (GR) are usually used when you administer an ointment, cream, inhaler, or bulk powder. This is primarily for retail pharmacy settings and not for physician-administered drug billings.
- International units (F2) are mainly used when billing for antihemophilic factors (factor VIII).