National Drug Code (NDC) Requirements for Physician-Administered Drugs

During a recent review of our claims processing, we noticed that some claims are being submitted without the required national drug code. This is a reminder to make sure you send correctly-coded claims. Claims submitted with incorrect codes will be denied.

The Deficit Reduction Act (DRA) of 2005 requires physicians, nurse practitioners, licensed midwives, and other health care professionals who administer drugs in ambulatory care settings, as described below, to report the national drug codes on their Medicaid claims. Payment will continue to be based on Healthcare Common Procedure Coding System (HCPCS) reporting information.

Requirements

Claims submitted on the 837 format require all of the following information. Those with a missing element will be denied:

• 11-digit national drug code
• National drug code dispensing quantity
• National drug code unit of measure
• Current Procedural Terminology (CPT) code
• HCPCS code and units

National drug codes should be collected and reported where HCPCS (J0000-J9999) or Berenson-Eggers type of service (BETOS) (01E/O1D) codes are billed for these categories of service:

• 01 – Physician Services
• 03 – Podiatry
• 04 – Psychology
• 06 – Rehabilitation Therapy
• 07 – Nursing
• 41 – Nurse Practitioner/Midwives
• 75 – Clinical Social Worker
• 85 – Freestanding Clinic
• 87 – Hospital Operating (OP)/Emergency Room (ER)

National drug codes should be included on Medicaid claims for drugs administered in one of the following places of service. These are considered ambulatory care settings:

• Office (POS 11)
• Nursing Home Care (POS 12)
• Freestanding Outpatient Center (POS 19)
• Urgent Care Center (20)
• Outpatient Clinic (POS 22)
• Emergency Room (POS 23)
• Ambulatory Surgery Center (POS 24)
• Military Treatment Center (POS 26)
• Freestanding Health Care Clinic (POS 49)
• Health Center (POS 50)

Facility claims must include one of the appropriate bill type codes below, in addition to place of service:

Drug encounters with a “UD” procedure code modifier (340B purchased drug) are exempt from national drug code reporting requirements.

Requirement for the plans below
If the claim is missing the national drug code or it’s incorrect, it’ll be denied.

• Medicaid
• Health and Recovery Plan (HARP)
• Fully Integrated Duals Advantage (FIDA) GuildNet Administrative Services Only
• Medicare Advantage Plan - GuildNet Gold Administrative Services Only (GHI)
• Child Health Plus

Requirement for the plans below

If the claim is missing the national drug code, it can be processed. If the claim has an incorrect national drug code, it’ll be denied.

• Health Insurance Exchange (HIX) Individual On-Exchange
• Essential Plans

Additional resources

• cms.gov/Regulations-and-Guidance/Guidance/Transmittals/downloads/R1401CP.pdf
• Medicaid Update - December 2007 - Volume 23 - Number 12