As a result of the Affordable Health Care Act, there is a new requirement that impacts how you bill your claims. Effective 1/1/11, the National Drug Code is required to be billed on claim forms for drugs administered by physicians, outpatient hospitals, and dialysis centers.

At this time, the Maryland Department of Health (formerly DHMH) and MedStar Family Choice will not require the National Drug Code to be submitted on pharmacy claims in a nursing home or home health setting.

The National Drug Code codes must be reported when MedStar Family Choice is the secondary or tertiary payor as well.

When to report the National Drug Code on the CMS1500 and UB04 claim forms

  1. Physician-administered drugs: When billing for drugs using the J-code HCPCS, the claims must include the J-code HCPCS, a valid 11-digit National Drug Code, as well as the quantity administered using the correct unit of measure. This does not include physician administered drugs for inpatient services, immunizations and radiopharmaceuticals.

  2. Outpatient hospital claims: For bill types 131 and 135, when billing for revenue codes 0250, 0251, 0252, 0257, 0258, 0259, and 0637, claims must include the J-code HCPCS, a valid 11-digit National Drug Code, as well as the quantity administered using the correct unit of measure.

    Hospitals that have been designated as 340B entities and provide Maryland Medicaid reduced drug costs as provided under the 340B program are not required to submit National Drug Code coding on outpatient hospital claims. Currently, the following hospitals meet this exception:

    • Johns Hopkins University Hospital

    • Johns Hopkins Bayview Hospital

    • Mercy Hospital

    • Maryland General Hospital

    • University of Maryland Medical Center

    • Bon Secours Hospital

    • James L. Kernan Hospital

    • Sinia Hospital

    • Washington Adventist Hospital

    • Shady Grove Adventist Hospital

    • Holy Cross Hospital

    • MedStar Union Memorial Hospital (Acute Center)

    • MedStar Union Memorial Hospital (Renal Dialysis)

    • MedStar Harbor Hospital

    • MedStar Washington Hospital Center (Acute)

    • Providence Hospital

    • St. Mary's Hospital

    • Western Maryland Health System

       

    The following FQHC providers are also exempt from billing National Drug Codes:

    • Baltimore Medical Systems

    • Chase Brexton

    • Choptank

    • Community Clinic

    • Family Health Centers of Baltimore

    • Greater Baden

    • Healthcare for the Homeless

    • Hyndman

    • Mary's Center for Maternal and Child Care

    • Mountain Laurel

    • Owensville

    • Park West

    • Peoples

    • Preston Taylor

    • Three Lower Counties

    • Total Healthcare

    • Tristate

    • Walnut Street

    • West Cecil Health Center

  3. Dialysis claims: For bill types 0721, when billing for revenue codes 0250, claims must include a valid 11-digit National Drug Code, as well as the quantity administered using the correct unit of measure.

How to report the National Drug Code: Professional claims

The National Drug Code number reported must be the actual National Drug Code number on the package or container from which the medication was administered.

837P (electronic submission)
For electronic claims that are submitted using the 837P, the NDC codes must be included in Loop 2410 data element LIN03 of the LIN segment. The quantity must be in Loop 2410 CTP04 and the unit of measure (UOM) code in Loop 2410 CTP05-01. The unit price must be populated in Loop 2410 CTP03 but can be entered with a value of zero.

CMS1500 (paper submission)

  1. For paper claims, the National Drug Code, unit of measure, and quantity must be entered in the shaded area of box 24A. The National Drug Code number submitted must be the actual National Drug Code number on the package or container from which the medication was administered.

  2. Begin by entering the qualifier N4 immediately followed by the 11-digit National Drug Code number. National Drug Codes must be in the 5-4-2 format required by HIPAA guidelines, do not report hyphens. It may be necessary to pad NDC numbers with zeroes in order to report eleven digits.

  3. Next enter the two-digit unit of measurement qualifier immediately followed by the numeric quantity administered to the patient. The Unit Quantity with a floating decimal for fractional units is limited to three (3) digits to the right of the decimal point.

  4. A maximum of seven (7) positions to the left of the floating decimal may be reported.

  5. When reporting a whole number, do not key the floating decimal.

  6. When reporting fractional units, you must enter the decimal as part of the entry.

Sample National Drug Code:

Whole Number Unit:
N 4 1 2 3 4 5 6 7 8 9 0 1 U N 1 2 3 4 5 6 7
Fractional Unit:
N 4 1 2 3 4 5 6 7 8 9 0 1 U N 1 2 3 4 . 5 6 7

Below are the measurement qualifiers when reporting National Drug Code units:
Measurement Qualifiers
F2 International Unit
GR Gram
ML Milliliter
UN Units

Reporting multiple National Drug Codes on a professional claim

If submitting via paper and the drug administered is comprised of more than one ingredient, each National Drug Code must be represented in the service lines. The HCPCS code should be repeated as necessary to cover each unique National Drug Code code. Enter a KP modifier for the first drug of a multiple drug formulation and enter a modifier of KQ to represent the second or subsequent drug formulations.

If submitting electronically and the drug administered is comprised of more than one ingredient, the compound drug should be reported by repeating the LIN and CTP segments in the 2410 drug identification loop.

How to report the National Drug Code: Facility claims

  • Outpatient hospital claims: National Drug Code is required on outpatient hospital claims (type of bill 131/135) when reporting revenue codes within series 025X and revenue code 0637.

  • Freestanding dialysis claims: National Drug Code is required when reporting the revenue code 0250 with bill type 0721.

837I (electronic submission)
For electronic claims that are submitted using the 837I, the National Drug Codes must be included in Loop 2410 data element LIN03 of the LIN segment. The quantity must be in Loop 2410 CTP04 and the unit of measure (UOM) code in Loop 2410 CTP05-01. The unit price must be populated in Loop 2410 CTP03 but can be entered with a value of zero.

UB04 (paper submission)
Facility claims that are submitted via paper should be submitted using the following format:

  1. In Field 43 report the National Drug Code qualifier of "N4" in the first two positions, left justified. The National Drug Code number submitted must be the actual National Drug Code number on the package or container from which the medication was administered.

  2. Begin by entering the qualifier N4 immediately followed by the 11-digit National Drug Code number. The National Drug Codes must be in the 5-4-2 format required by HIPAA guidelines, do not enter hyphens. It may be necessary to pad National Drug Code numbers with zeroes in order to report eleven digits.

  3. Next enter the two-digit unit of measurement qualifier immediately followed by the numeric quantity administered to the patient. The Unit Quantity with a floating decimal for fractional units is limited to three (3) digits to the right of the decimal point.

  4. A maximum of seven (7) positions to the left of the floating decimal may be reported.

  5. When reporting a whole number, do not key the floating decimal.

  6. When reporting fractional units, you must enter the decimal as part of the entry.

Sample National Drug Code:
Whole Number Unit:
N 4 1 2 3 4 5 6 7 8 9 0 1 U N 1 2 3 4 5 6 7
Fractional Unit:
N 4 1 2 3 4 5 6 7 8 9 0 1 U N 1 2 3 4 . 5 6 7

Below are the measurement qualifiers when reporting National Drug Code units:
Measurement Qualifiers
F2 International Unit
GR Gram
ML Milliliter
UN Units

Reporting multiple National Drug Codes on a facility claim

You may report multiple line items of revenue codes and associated National Drug Code numbers as follows:

  1. Each line item must reflect the revenue code 0250 with the appropriate HCPCS;

  2. Each line item must reflect a valid National Drug Code per the National Drug Code format; and

  3. Each National Drug Code reported must be unique or the revenue code line item will deny as a duplicate against the revenue code and National
    Drug Code line item that matched it.

If submitting electronically and the drug administered is comprised of more than one ingredient, the compound drug should be reported by repeating the LIN and CTP segments in the 2410 drug identification loop.

Reporting compound drugs on a facility claim

When reporting compound drugs, a maximum of five (5) lines are allowed and should be reported in the following manner:

  1. List the most expensive ingredient first, followed by the rest of the ingredients.

  2. On the first line for the compound drug, report the revenue code (0250), the valid National Drug Code per the National Drug Code format, the appropriate HCPCS for the drug that is administered, the total number of units administered for all drugs in the compound and the total charge for all of the drugs that are in the compound.

  3. For each subsequent line, report only the National Drug Code and the appropriate HCPCS related to the compound drug.

  4. If one line for the compound drug denies, the entire compound drug will deny.

Information current as of: