At this time, many payers use both the 11-digit National Drug Code (NDC) and the associated Healthcare Common Procedure Coding System (HCPCS) code for claims adjudication that include billing for physician-administered drugs. In accordance with the Deficit Reduction Act (DRA) of 2005 and its subsequent implementing regulation, as found in 42 Code of Federal Regulations (CFR) 447 Section 520, State Medicaid Agencies must include information on individual NDCs directly related to physician-administered drugs when sending their billing to drug manufacturers to claim drug rebates under the Title XIX program.
Through ongoing discussions with Title XIX Medicaid agencies, The Centers for Medicare and Medicaid Services (CMS) has determined that physician offices, outpatient hospital departments, and outpatient clinics do not always include a one-to-one reporting of an NDC for each Part B drug HCPCS (J3140) code reported on incoming Medicare claims. This trend was found mostly on multi-line claims.
Key Points
Billing of NDCs on Health Insurance Portability and Accountability Act (HIPAA) 837 Institutional Claims Sent to Medicare
When physician billing offices, hospital outpatient departments, and outpatient clinic billing offices determine their patients are dually entitled to Medicare and Medicaid have received physician-administered drugs as part of a medical encounter, they should bill the physician-administered drugs on the resulting claims to Medicare as follows:
- For each line level reporting of a Part B physician-administered drug, continue to report the associated HCPCS (e.g., J3140) in 2400 SV202-2, with SV202-1=HC; and
- For each Part B drug HCPCS reported in 2400 SV202-2, complete the required associated 2410 LIN and CPT04 segments as follows: o Include the NDC in 2410 LIN03, with LIN02=N4;
- Include the quantity/unit count in 2410 CPT04; and
- Input the needed information in 2410 CPT05 and CPT05-1.
Billing NDCs on Incoming CMS-1500 or UB04 Hard Copy Claims to Medicare
Most physicians and providers may realize Medicare transforms incoming CMS-1500 or UB04 hard copy claims into their electronic equivalent HIPAA 837 professional and institutional formats as part of the Medicare claims crossover process. CMS previously issued guidance to physicians and providers about the reporting of NDCs and associated information on hard copy CMS-1500 and UB04 claim formats during 2008. These directions, which remain unchanged, may be reviewed here.
Billing of NDCs via Direct Data Entry (DDE) Claims Screen
Outpatient hospital departments and outpatient clinics that bill via DDE and are experiencing non-acceptance and/or denial of Medicare crossover claims by State Medicaid Agencies due to missing NDCs should contact their designated MAC or FI for assistance.