Arkansas Administrative Code › Agency 016 - DEPARTMENT OF HUMAN SERVICES › Division 06 - Medical Services › Rule 016.06.07-057 - Official Notice DMS-2007-A-5, DMS-2007-0-6, DMS-2007-HH-2, DMS-2007-CA-4, DMS-2007-Z-3, DMS-2007-X-3, DMS-2007-II-7, DMS-2007-I-2, DMS-2007-L-7, DMS-2007-KK-6, DMS-2007-Q-3, DMS-2007-R-7, DMS-2007-EE-3, DMS-2007-S-1, DMS-2007-Y-2, DMS-2007-OO-6, DMS-2007-T-1 - Implementation of the Federal Deficit Reduction Act of 2005, Requiring National Drug Codes (NDC) When Billing Drug Procedure Codes

Current through Register Vol. 49, No. 6, June, 2024
I.
Background
The Federal Deficit Reduction Act of 2005 mandates that
				Arkansas Medicaid require the submission of National Drug Codes (NDCs) on
				claims submitted with Health Care Financing Administration Common Procedure
				Code System, Level II/Current Procedural Terminology,
				4th edition (HCPCS/CPT) codes for
drugs
administered. The purpose of this requirement is to assure that the
				State Medicaid Agencies obtain a rebate from those manufacturers who have
				signed a rebate agreement with the Centers for Medicare and Medicaid Services
				(CMS).
Effective for claims with dates of service on or after
				January 1, 2008, Arkansas Medicaid will implement billing protocol per the
				Federal Deficit Reduction Act of 2005. This official notice will explain
				changes in policy and billing protocol for providers that submit claims for
				drug HCPCS/CPT codes.
A.
Covered Labelers
Arkansas Medicaid, by statute, will only pay for a drug
				procedure billed with an NDC when the pharmaceutical labeler of that drug is a
				covered labeler with Centers for Medicare & Medicaid Services (CMS). A
				"covered labeler" is a pharmaceutical manufacturer that has entered into a
				federal rebate agreement with CMS to provide each State a rebate for products
				reimbursed by Medicaid Programs. A covered labeler is identified by the first 5
				digits of the NDC. To assure a product is payable for administration to a
				Medicaid beneficiary, compare the labeler code (the first 5 digits of the NDC)
				to the list of covered labelers which is maintained on the Arkansas Medicaid
				website.
A complete listing of
"Covered Labelers"
is
				located on the Arkansas Medicaid Web page at www.medicaid.state.ar.us, click on
				Provider Services, select Prescription Drug information, and then select
				Covered Labelers. See Diagram 1 for an example of this screen. The effective
				date is when a manufacturer entered into a rebate agreement with CMS. The
Labeler termination date
indicates that the manufacturer no
				longer participates in the federal rebate program and therefore the products
				cannot be reimbursed by Arkansas Medicaid on or after the
termination
				date
.
Diagram 1
LABELER hCODE
LABELER NAME
EFFECTIVE DATE
TERMINATION DATE J
00002
ELI LILLY AND COMPANY
1/1/1991
00003
E.R. SQUIBB & SONS, INC
1/1/1991
00004
HOFFMANN-LA ROCHE
1/1/1991
00005
LEDERLE LABORATORIES
1/1/1991
00006
MERCK & CO., INC.
1/1/1991
00007
GLAXO SMITH KLINE
1/1/1991
00008
WYETH LABORATORIES
1/1/1991
00009
PFIZER, INC.
1/1/1991
00011
BECTON DICKINSON MICROBIOLOGY SYSTEMS
10/1/1991
7/1/1998
00013
PFIZER, INC.
1/1/1991
In order for a claim with drug HCPCS/CPT codes to be eligible
				for payment, the detail date of service must be prior to the
NDC
				termination date
. The NDC termination date represents the shelf-life
				expiration date of the last batch produced, as supplied on the Centers for
				Medicare and Medicaid Services (CMS) quarterly update. The date is supplied to
				CMS by the drug manufacturer/distributor.
Arkansas Medicaid will deny claim details with drug HCPCS/CPT
				codes with a detail date of service equal to or greater than the NDC
				termination date.
When completing a Medicaid claim for administering a drug,
				indicate the HIPAA standard 11-digit NDC with no dashes or spaces. The 11-digit
				NDC is comprised of three segments or codes: a 5-digit labeler code, a 4-digit
				product code and a 2-digit package code. The 10-digit NDC assigned by the FDA
				printed on the drug package must be changed to the 11-digit format by inserting
				a leading zero in one of the three segments. Below are examples of the FDA
				assigned NDC on a package changed to the appropriate 11-digit HIPAA standard
				format. Diagram 2 displays the labeler code as five digits with leading zeros;
				the product code as four digits with leading zeros; the package code as two
				digits without leading zeros, using the " 5-4-2 " format.
Diagram 2
00123
0456
78
LABELER
CODE (5 digits)
PRODUCT
CODE (4 digits)
PACKAGE
CODE (2 digits)
NDCs submitted in any configuration other than the 11
				digit format will be rejected/denied.
NDCs billed to Medicaid for
				payment must use the 11 digit format without dashes or spaces between the
				numbers.
See Diagram 3 for sample NDCs as they might appear on drug
				packaging and the corresponding format which should be used for billing
				Arkansas Medicaid:
Diagram 3
10-digit FDA NDC on PACKAGE
Required 11-digit NDC ( 5-4-2 ) Billing
						  Format
12345 6789 1
123456789
0
1
1111-2222-33
0
1111222233
01111 456 71
01111
0
45671
B.
Drug Procedure Code (HCPCS/CPT) to NDC Relationship and Billing
			 Principles
HCPCS/CPT codes and any modifiers will continue to be billed
				per the policy for each procedure code. However, the NDC and NDC quantity of
				the administered drug is now also required for correct billing of drug HCPC/CPT
				codes. To maintain the integrity of the drug rebate program, it is important
				that the specific NDC from the package used at the time of the procedure be
				recorded for billing. HCPCS/CPT codes submitted using invalid NDCs or NDCs that
				were unavailable on the date of service will be rejected/denied. We encourage
				you to enlist the cooperation of all staff members involved in drug
				administration to assure collection or notation of the NDC from the actual
				package used. It is not recommended that billing of NDCs be based on a
				reference list, as NDCs vary from one labeler to another, from one package size
				to another, and from one time period to another.
Exception: There is no requirement for an NDC when
				billing for vaccines.