Arkansas Administrative Code › Agency 016 - DEPARTMENT OF HUMAN SERVICES › Division 29 - Division of Medical Services › Rule 016.29.22-007 - National Drug Code (NDC) Billing Updates

Current through Register Vol. 49, No. 6, June, 2024
242.400
Drug Procedure Codes and
			 National Drug Codes (NDCs)
			 1-1-23
Effective for claims with dates of service on or after January
				1, 2008, Arkansas Medicaid implemented billing protocol per the Federal Deficit
				Reduction Act of 2005 for drugs. This explains policy and billing protocol for
				providers that submit claims for drug HCPCS/CPT codes with dates of service on
				or after January 1, 2008.
The Federal Deficit Reduction Act of 2005 mandates that
				Arkansas Medicaid require the submission of National Drug Codes (NDCs) on
				claims submitted with Healthcare Common Procedure Coding 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).
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 and 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
				five (5) digits of the NDC. To assure a product is payable for administration
				to a Medicaid beneficiary, compare the labeler code (the first five (5) digits
				of the NDC) to the list of covered labelers which is maintained on the
DHS contracted Pharmacy vendor
website.
A complete listing of
"Covered Labelers"
is
				located on the website. 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
Click here to view
				image
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 (3) 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 (0) in one (1) of the three (3) 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 (5)
				digits with leading zeros; the product code as four (4) digits with leading
				zeros; the package code as two (2) 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
12345678901
1111-2222-33
01111222233
01111 456 71
01111045671
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
				HCPCS/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 (1) labeler to another, from one (1)
				package size to another, and from one (1) time period to another.
Exception: There is no requirement for an NDC when billing for
				vaccines, radio pharmaceuticals, and allergen immunotherapy.
C. Claims Filing
The HCPCS/CPT codes billing units and the NDC quantity do not
				always have a one-to-one relationship.
Example 1: The HCPCS/CPT code may specify up to 75 mg of the
				drug, whereas the NDC quantity is typically billed in units, milliliters or
				grams. If the patient is provided 2 oral tablets, one at 25 mg and one at 50
				mg, the HCPCS/CPT code unit would be 1 (1 total of 75 mg) in the example
				whereas the NDC quantity would be 1 each (1 unit of the 25 mg tablet and 1 unit
				of the 50 mg tablet). See Diagram 4.
Diagram 4
Click here to view
				image
Example 2: If the drug in the example is an injection of 5 ml
				(or cc) of a product that was 50 mg per 10 ml of a 10 ml single-use vial, the
				HCPCS/CPT code unit would be 1 (1 unit of 25 mg) whereas the NDC quantity would
				be 5 (5 ml). In this example, 5 ml or 25 mg would be documented as wasted. See
				Diagram 5. For billing wastage, see bullets D (Electronic Claims Filing) and E
				(Paper Claims Filing) below.
Diagram 5
Click here to view
				image
D.
			 Electronic Claims Filing 837I (Outpatient)
Providers are instructed to bill as follows:
* 1 NDC for a procedure - 1st/only detail shall be billed with
				no modifier
* 2 NDCs for same procedure - 1st detail shall be billed with a
				KP and 2nd gets billed with a KQ modifier
* 3 NDCs for same procedure - 1st detail shall be billed with a
				KP and 2nd & 3rd detail get billed with a KQ modifier
* 4 or more NDCs for same procedure - submit via paper
				claim
* Wastage of each NDC shall be billed on a separate line with a
				JW modifier.
NOTE: The NDCs listed above are not the same (unless with
				a JW modifier). Same NDCs shall be billed on a single line with appropriate
				units.
NOTE: CMS definitions of modifiers:
* KP = First drug of a multiple drug unit dose
				formulation
* KQ = Second or subsequent drug of a multiple drug unit dose
				formulation
* JW = Drug wastage
E. Paper Claims Filing CMS-1450 (UB-04)
Providers are instructed to bill as follows:
* 1 NDC for a procedure - 1st/only detail shall be billed with
				no modifier
* 2 NDCs for same procedure - 1st detail shall be billed with a
				KP and 2nd gets billed with a KQ modifier
* 3 NDCs for same procedure - 1st detail shall be billed with a
				KP and 2nd & 3rd detail get billed with a KQ modifier
* 4 or more NDCs for same procedure - 1st detail shall be
				billed with a KP and 2nd and subsequent details shall be billed with a KQ
				modifier
* Wastage of each NDC shall be billed on a separate line with a
				JW modifier.
Diagram 6
Click here to view
				image
F.
			 Adjustments
Paper adjustments for paid claims filed with NDC numbers will
				not be accepted. Any original claim will have to be voided and a replacement
				claim will need to be filed. Providers have the option of adjusting a paper or
				electronic claim electronically.
G. Record Retention
Each provider must retain all records for five (5) years from
				the date of service or until all audit questions, disputes or review issues,
				appeal hearings, investigations, or administrative/judicial litigation to which
				the records may relate are concluded, whichever period is longer.
At times, a manufacturer may question the invoiced
				amount, which results in a drug rebate dispute. If this occurs, you may be
				contacted requesting a copy of your office records to include documentation
				pertaining to the billed HCPCS/CPT code. Requested records may include NDC
				invoices showing the purchase of drugs and documentation showing what drug
				(name, strength, and amount) was administered and on what date, to the
				beneficiary in question.