CurrentNeighborhood Health Plan of Rhode IslandPolicy N/A

NDC reporting and reimbursement requirements for drug claims

Defines requirements for reporting National Drug Codes (NDCs) on claims, related documentation, and reimbursement rules for providers billing Medicaid (excluding EFP), Integrity, and Commercial lines.

Policy Summary

PayerNeighborhood Health Plan of Rhode Island

PolicyNDC reporting and reimbursement requirements for drug claims

Policy CodePolicy N/A

Change TypeNo material change

Effective DateN/A

Next Review DateN/A

Key ActionVerify member eligibility, coverage, and authorization prior to rendering services and contact Provider Services at 1-800-963-1001 for questions.

SourceLink

POLICY UPDATE CHANGES

No material clinical or coverage changes in this revision.

CMS-1500 / 837P/837Lclaim submission formats requiring NDC

11-digit (5-4-2)NDC format

F2, GR, ME, ML, UNaccepted NDC unit qualifiers

Invalid/missing NDCrejection reasons listed

Discarded multi-use vialnon-reimbursable items

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NDC Reporting and Reimbursement Criteria

NDC reporting and reimbursement criteria

Applies to services for Neighborhood members under specified plans and lines of business; services must be medically necessary and meet supporting policy and coverage rules.

Services billed to Neighborhood must be medically necessary to qualify for reimbursement.

Providers must verify member eligibility, coverage, and authorization prior to rendering services; contact Provider Services at 1-800-963-1001 for questions.

Neighborhood may apply National Coverage Determinations (NCD), Local Coverage Determinations (LCD), EOHHS recommendations, Interqual, and Clinical Medical Policies (CMP) when determining medical necessity.

For Medicaid members (excluding Extended Family Planning), certain physician-administered drugs require submission of the actual 11-digit NDC on claims to support federal rebate collection and related requirements.

On paper CMS-1500 claims: enter NDC qualifier 'N4' and the 11-digit NDC in box 24A; enter the HCPCS code in 24D; include the two-letter unit qualifier and quantity without spaces or hyphens.

On electronic claims (837P/837L): report the NDC in the LIN segment with N4 qualifier using the 11-digit format; use the CTP segment for unit and quantity information; repeat loops to report multiple components as needed (2410 Loop may be repeated for multiple NDCs/components).

When billing multi-ingredient or multi-component drugs, repeat the HCPCS code on separate lines for each unique NDC and use required modifiers (e.g., KP/KQ) as instructed; convert HCPCS units to NDC units when calculating quantities.

Claims may be rejected for any of the following

Invalid or missing NDC code.
Invalid NDC code measurement or missing NDC quantity.
NDC not appropriate for the billed J-code.

Claims will deny for invalid or missing HCPCS codes.

Neighborhood will not reimburse discarded drugs from multi-use vials.

Providers should be prepared to provide medical records and documentation to support billed services and medical necessity; claims are subject to audit per CMS documentation standards.

Codes, Formats, and Reporting Iterations

HCPCS codes requiring NDCHCPCSCovered

HCPCS J-codes and other injectable/infused drug codes

Certain HCPCS codes require submission of the actual 11-digit NDC associated with the drug administered; see payer website for full list.

NDC (11-digit 5-4-2)NDC

NDC (11-digit 5-4-2)

Use the actual NDC from the drug container; include leading zeros to reach 11 digits; do not use hyphens or spaces.

Reporting iterations — HCPCS/NDC

Repeat HCPCS for each NDCWhen a procedure/drug contains more than one ingredient, repeat the HCPCS code on separate lines for each unique NDC; use KP modifier for the first drug and KQ for the second or subsequent drug formulation.

2410 Loop iterations (EDI)Repeat the 2410 Loop up to 999 iterations to report each NDC and its associated information for as many drug components as necessary.

Multiple packages of same NDCIf dosage requires more than one package of the same NDC, repeat the HCPCS code on separate lines and list the corresponding NDC codes.

Paper claim instructionOn paper claims, list each unique NDC on its own line paired with the repeated HCPCS code as described above.

Provider Billing and Documentation Actions

Prior Authorization

Pre-billing verification

Verify member eligibility, coverage, and authorization criteria prior to rendering services. Contact Provider Services at 1-800-963-1001 for questions related to this policy.

Responsibility applies to Participating and Non-participating providers for listed Neighborhood plans.
Confirm prior authorizations and coverage limits before delivering services.

Documentation Required

Documentation request

Be prepared to provide medical records upon request; documentation must support the billed service(s) and the medical necessity of those services following CMS standards.

Neighborhood reserves the right to request medical records for any service billed.
Ensure medical record entries substantiate both the service provided and its medical necessity.

Key Definitions

National Drug Code (NDC) definition

DefinitionThe National Drug Code (NDC) is an 11-digit number in a 5-4-2 format that identifies the drug labeler, product, and package size; leading zeros must be used when the package displays fewer than 11 digits.

Format detailFirst 5 digits = labeler code (manufacturer, assigned by FDA); next 4 digits = product code (assigned by manufacturer); last 2 digits = package size (assigned by manufacturer).

Where foundThe NDC is found on the drug container (vial, bottle, tube) and the exact NDC from the administered container must be billed; billing a different manufacturer's NDC is considered fraudulent.

Medicaid Rebate Program

Program originThe Medicaid Rebate Program was created by the Omnibus Budget Reconciliation Act of 1990 (OBRA 1990) and added Section 1927 to the Social Security Act, effective January 1, 1991.

Manufacturer agreement