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October 18, 2007
Revised November 29, 2007 |
| As stated in Provider Update HPA-07-02R, the federal Deficit Reduction Act of 2005 (DRA) requires states to collect rebates for covered outpatient drugs administered by “physicians.” In order to comply, states must gather utilization data including the National Drug Code (NDC), quantity, and unit of measure from claims submitted for physician-administered drugs. This update provides further clarification. |
| Effective for dates of service on and after January 1, 2008, include the correct NDC information on all claims, including Medicare and other third party claims, when billing non-vaccine drugs using HCPCS codes. |
| The following information consolidates NDC resource information you need to bill MHCP. |
| • MHCP will implement these guidelines on January 1, 2008 (not July 1, 2007, as previously reported) |
| • MHCP identified certain HCPCS codes requiring NDC reporting in the HCPCS codes requiring NDC document which represents rebatable single and multiple source drugs. MHCP expanded the CMS list of Top 20 multiple source drugs to include all rebatable multiple source drugs |
| • Use rebating manufacturers as established by the Omnibus Budget Reconciliation Act of 1990 (OBRA’90) for physician-administered drugs. Refer to the Medicaid Rebating Manufacturers List |
| • Report the NDC valid only for the: |
| • Report NDCs for physician-administered drugs: |
| • On professional and outpatient institutional (e.g., outpatient, Ambulatory Surgical Center) claims |
| • Participants in the 340B Drug Pricing Program are included in the NDC reporting requirements |
| Use the following guidelines for reporting NDCs: |
| • Enter NDC, quantity, and unit of measure on all claims to MHCP, including claims for which MHCP is the payer of last resort such as Medicare crossovers and other coordination of benefit claims. Follow Medicare and other third party billing requirements for primary payment in addition to the requirements noted in this Provider Update |
| • Enter the actual NDC number as it appears on the package or container from which it was administered |
| • Report the actual metric decimal quantity administered to the patient |
| Report the NDC, unit of measure, and quantity in: |
| • Batch: LIN and CTP segments of Loop 2410 of electronic transactions 837P and 837I |
| • Interactive: Drug Pricing segment on the Services tab (837P or 837I) |
| • Do not enter a space between the qualifier and the NDC or qualifier and quantity |
| • Do not enter hyphens or spaces within the NDC |
| In the shaded area of 24A, enter the NDC qualifier N4, followed by the 11-digit NDC, three blank spaces, and the unit of measure qualifier followed by the metric decimal quantity |
| Enter the appropriate 025X or 063X revenue code category in FL 42. Enter the NDC qualifier N4, followed by the 11-digit NDC, and the unit of measure followed by the metric decimal quantity in FL43. If you use revenue code 025X and do not report a HCPCS code, do not report an NDC |
| MHCP applies the following edits to claims for physician-administered drugs: |
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| Drug is less than effective (DESI) |
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| Claim Adjustment Reason Code A1 Claim/service denied |
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Remittance Advice Remark Code
M119 Missing/incomplete/invalid/deactivated/withdrawn National Drug Code (NDC)
N378 Missing/incomplete/invalid prescription quantity
N59 Alert: Please refer to your provider manual for additional program and provider information |
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| Who is included in “physician”-administered? |
| "Physician" also includes APRNs, NPs, PAs, CNMs, CNSs, RNs, and all others providers identified by Medicare as "non-physician practitioners" whose scope of practice includes the administration of drugs. |
| Is a hospital outpatient department or emergency room required to report NDCs? |
| Yes. CMS published clarification at 42 CFR 447 (Final Rule dated July 17, 2007) in which they clarified conditions relating to physician-administered drugs and based their “interpretation on the statute language that does not differentiate between providers in requiring that States collect information sufficient to bill for rebates for covered outpatient drugs under section 1927(k)(3) of the Act.” “Drugs administered incident to an emergency room service that are billed separately as covered outpatient drugs, as defined by 1927 (k)(2) of the Act, are covered under the Medicaid Drug Rebate Program.” |
| Why do I need to report HCPCS units and a different quantity for the NDC? |
| HCPCS codes define the unit increments for billing. NDC quantity is based on NCPDP Standard billing units per NDC. NCPDP standards are used to report drug utilization data to manufacturers. Utilization data required for rebate reporting includes NDC, NDC quantity, and unit of measure. |
| How do I know the correct NDC unit of measure to report? |
| Unit of measure refers to the NCPDP standard billing units. Four valid values may be used to report unit of measure: |
| • UN (Unit), use to report products dispensed as discreet units or pre-filled syringes identified as "each" |
| • F2 (International Unit) |
| • GR (Gram), use to report a product supplied as powder to be reconstituted for injection |
| • ML (Milliliter), use to report a product supplied as a liquid |
| Convert the dosage represented by the HCPCS units into NDC quantity based on the NDC unit of measure. Refer to Medicare’s SADMERC NDC to HCPCS Crosswalks, "Billing Units" (W) column for assistance. |
| Use the SADMERC document for guidance only. Do not use it as a substitute for recording the actual NDC of the drug administered. The crosswalk is updated monthly and does not necessarily represent all drugs available at the time of administration. Relatively new drugs may not be displayed. The SADMERC list contains those drugs approved by the FDA, listed in a public source of reference, and covered by Medicare. |
Verify drug coverage using NDC via the Interactive Voice Response (IVR) system at: (651) 282-2599 or
1-800-657-3985. A voice prompt will guide you through the process of accessing drug coverage information. |
| What if I need more than one package size for the dose to be administered? |
| For injections that involve multiple NDCs, bill the initial line with the HCPCS code, units, NDC, unit of measure and quantity with modifier KP (first drug of a multiple drug unit dose formulation). Bill the second, and any subsequent, line item(s) with the same HCPCS code and modifier KQ (second or subsequent drug of a multiple drug unit dose formulation). |
| 150 mg of Synagis® may be supplied as a 100 mg vial plus a 50 mg vial. The two vials have separate NDCs but would be billed under one HCPCS code (90378). The HCPCS units, NDC quantity, and submitted charges must be prorated between the lines. |
| How do I report compound drugs? |
| Compound drugs are the result of combining two or more active ingredients to create a new drug product. Report the NDC of the package for the active ingredient that represents the greatest proportion of the dose and the total quantity on one line. Report only one NDC per HCPCS code line billed. |
| Do I report the discarded or wasted portion of administered drugs separately? |
| No, the submitted line should include the amount discarded with the amount administered. Like Medicare, MHCP encourages scheduling patients to make the most efficient use of the drugs administered. However, when you must discard the remainder of a single use vial/package, MHCP covers the amount administered and the amount discarded, up to the total amount indicated for the HCPCS code. |
| When dose is 300 mg and a shelf life prevents use of the remaining product. Charge and units reported include the discarded portion. |
Will my outpatient claim deny if the drug line item information is incomplete? |
| No, MHCP will not deny the entire claim, but will adjust the erroneous line item to $0.00. Replace the claim if you intend to recoup the drug expense. |
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