National Drug Codes -NDC’s

As if getting paid for your services wasn’t hard enough, how does a provider receive reimbursement for the drugs administered in the office?

NDC’s are the National Drug Code’s given by the FDA to identify each drug manufactured for humans. Any drug that is considered an over the counter drug, or OTC, is given this code that is broken down into 3 numerical groupings. The first, being the labeler (manufacturer), the second is the product code that details product strength, dosage and formula and the third segment, identifies the package size.

Example:

 

 

 

 

This 10- or 11-digit number has become a requirement with insurance payers on claims submitted for processing starting back in 2007 with the intent of tracking and properly reimbursing for drugs that have been administered. The NDC’s must be billed with what is called a qualifier of N4 which is the identifier to the payers that this is the NDC code for the drug(s) utilized.

The tricky part? Since most NDC codes are 10 digits, payers have made a confusing resolution of adding zeroes to the NDC numbers either at the beginning, middle, or end of the FDA given NDC number. Due to the lack of reasoning of where to place the zero for all payers, a “crosswalk” has been created for reference.

The link to locate a valid crosswalk can be found at the Medicare DMC website, https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Part-B-Drugs/McrPartBDrugAvgSalesPrice and will list as shown below:

It is recommended that your staff utilize this crosswalk to locate the correct NDC to add to the medical records and claim for processing.

TIP: If unable to locate the code(s) within the most current crosswalk, review previously dated crosswalks to locate the code(s) needed.
Perform the following steps: Locate the code being billed, locate the NDC of the drug used on the patient (be sure it matches the NDC on the package of the drug used) and enter that code in the shaded portion of box 24 A. Alleviate any hyphens in the NDC number on the claim. Procedure code J3301 example:

View full size image here. 

If you staff includes the following information within the claim anytime a drug charge is billed, whether electronic or paper, providers will avoid denials, delayed payments or lost revenue:

  • N4 Qualifier
  • NDC 11 Digit code
  • Units Number
  • Type of measurement (UN, ML, GR)

Example of a correctly billed drug code with the NDC and qualifier in the shaded box of the claim:

Remember, claims lacking this information can hold up all other charges on that same claim. Be prepared with your codes, make sure they are entered into your system and on those claims for reimbursement!

Good Luck and hope this helps tackle the NDC puzzle game!

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