CurrentPremera BluecrossPolicy cmi_171641

National Drug Code (NDC) Billing Guidelines - Outpatient Facility Claims

Governs submission and billing requirements for National Drug Code (NDC) numbers, units and HCPCS drug procedure codes on outpatient/facility claims for Premera and affiliated lines of business; affects outpatient facility providers billing drugs, radiopharmaceuticals, supplies or devices with assigned NDCs.

Policy Summary

PayerPremera Bluecross

PolicyNational Drug Code (NDC) Billing Guidelines - Outpatient Facility Claims

Policy CodePolicy cmi_171641

Change TypeOperational clarificationsstate-specific billing mandates

Effective Date

Next Review Date

Key ActionInclude an active 11-digit NDC, NDC unit/basis of measure, and NDC units on the same claim line with the appropriate HCPCS drug procedure code for outpatient facility claims.

SourceLink

POLICY UPDATE CHANGES

Added instructions on billing for single-use vial/package drug wastage by billing administered and wasted portions on separate lines with modifier JW for wasted portion and JZ for no wastage.

Added Codes/Coding Guidelines section listing WA mandates (SB 6127 and SB 6228) with billing instructions effective January 1, 2025.

Clarified requirement that any drug, radiopharmaceutical, supply, or device with an assigned NDC must be submitted with that NDC number along with appropriate units, basis of measurement and an appropriate HCPCS code.

11-digitNDC billing format required (5-4-2 digits)

Field 43-47UB-04 fields required when billing NDC on paper claim

Loop 2410

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Coverage Determination

Coverage determination

Coverage is determined by member eligibility, benefit limits, application of medical policy and claims adjudication edits. Reimbursement is restricted to the provider's scope of practice and applicable fee schedule.

Coverage, payment, and reimbursement decisions are subject to member eligibility, benefit limits, and the Plan's Medical Policy; final payment is subject to claims adjudication edits and applicable provider fee schedules and scope of practice.

When a drug, radiopharmaceutical, supply or device has an assigned NDC and is administered or supplied in an outpatient facility and billed on an electronic (ANSI 837I) or paper (UB-04/CMS-1450) facility claim, an active/valid 11-digit NDC number, the NDC unit/basis of measure, NDC units, and an appropriate HCPCS drug procedure code must be submitted on the same claim line.

NDC / Coding Requirements

NDC qualifiers and unitsmixed

N4	Product or Service ID Qualifier required for NDC in ANSI 837I
UN	Unit - preferred NDC unit/basis of measurement value
ML	Milliliter - preferred NDC unit/basis of measurement value
GR	Gram - preferred NDC unit/basis of measurement value
F2	International Unit - preferred NDC unit/basis of measurement value

NDC unit quantity field limits (UB-04)

UB-04 field and valueWhen populating the UB-04 paper claim, the NDC unit quantity (Field 43 final digits) is limited to a maximum of 7 digits before the decimal and up to 3 digits after the decimal; enter whole numbers without a decimal or zero-filling and leave remaining positions blank.

Related UB-04 fieldsField 42 = Revenue code; Field 43 = Description (contains NDC qualifier, 11-digit NDC, unit qualifier, and unit quantity); Field 44 = HCPCS/RATE/HIPPS code; Field 45 = Service date; Field 46 = Service units for HCPCS; Field 47 = Total charges.

NDC unit definitionUnit quantity in Field 43 is the NDC drug unit quantity (not the HCPCS drug procedure code units).

Provider Submission & Billing Actions

Billing Rule

Billing for wasted/non-administered drugs

For single-use vials/packages only: when any portion of a single-use vial is discarded (wasted) or no wastage occurs, submit claim lines as specified below. Multi-use vials are not eligible for reimbursement for discarded/wasted amounts.

To report wasted (discarded) drug from a single-use vial: submit two separate claim lines — one for the administered portion and one for the wasted portion. The wasted portion must be appended with modifier JW to the HCPCS drug procedure code.
Claim line #1 (administered portion): include appropriate Revenue Code (UB-04 Field 42), the active/valid NDC number (Field 43), the HCPCS drug procedure code (Field 44) with NO JW/JZ modifier, and the units administered (Field 46).
Claim line #2 (wasted portion): include appropriate Revenue Code (Field 42), the SAME NDC number (Field 43), the SAME HCPCS drug procedure code (Field 44) appended with modifier JW, and the units wasted (Field 46).
If the entire single-use vial was administered with NO wastage, submit a single claim line with Revenue Code (Field 42), the NDC number (Field 43), the HCPCS drug procedure code (Field 44) appended with modifier JZ, and the administered units (Field 46).

Key Definitions

National Drug Code (NDC) — 11-digit 5-4-2 format

Format and lengthAn 11-digit National Drug Code (NDC) in 5-4-2 format (NNNNN-NNNN-NN) is required on claims; the appropriate NDC may appear on packaging with fewer than 11 digits or with asterisks (*) for leading zeros which must be replaced with zeros on the submitted claim.

Segment meaningsFirst segment (5 digits) = company/manufacturer identifier (FDA-assigned); Second segment (4 digits) = product, strength, dosage form, formulation (manufacturer-assigned); Third segment (2 digits) = package size/type (manufacturer-assigned).

Where to find NDCThe appropriate NDC number is located on the drug label or outer packaging and must be submitted along with HCPCS and NDC units on the same claim line for outpatient facility claims.

Compound Drug — definition and billing requirements

DefinitionCompound Drug = an administered drug composed of more than one drug ingredient.

Billing Rule

Claim submission formatting

When submitting NDCs on electronic ANSI 837I claims or paper UB-04/CMS-1450 forms, include the active/valid 11-digit NDC (no dashes), the NDC unit/basis of measure, and the NDC units on the same claim line as the appropriate HCPCS drug procedure code. Failure to include the NDC in the required format and with the HCPCS code may result in denial.

Electronic (ANSI 837I): Loop 2410 — LIN02: product/service ID qualifier = N4; LIN03: enter 11-digit NDC (no dashes, zero-fill any missing leading digits); CPT04: NDC unit count (quantity billed); CPT05: unit/basis of measurement (e.g., UN, ML, GR, F2).
Paper (UB-04/CMS-1450): submit each drug on an individual line with appropriate Revenue Code (Field 42) and include: Field 43 — active/valid 11-digit NDC (left justified) with NDC qualifier (first 2 positions, e.g., N4), unit of measurement qualifier (e.g., F2, GR, ML, UN), and NDC unit quantity (max 7 digits before decimal, 3 after); Field 44 — HCPCS drug procedure code (J/C/Q/S series); Field 45 — date of service; Field 46 — HCPCS drug procedure code units; Field 47 — charge for drug supplied/administered.
When billing compound drugs, bill each specific drug in the compound on a separate line with its own HCPCS code, product ID qualifier, NDC number, unit/basis of measurement, and NDC units.
If an NDC on the package is fewer than 11 digits or contains asterisks for leading zeros, zero-fill to create the required 11-digit number on the submitted claim.

Note

State-specific billing mandates (WA)

Washington state-specific statutory billing requirements take effect for specified drugs on and after January 1, 2025. Follow the billing instructions below when applicable.

WA SB 6127 (HIV PEP drugs supplied in the Emergency Room, effective 01/01/2025): bill on a separate line with Revenue Code 0253 (Take Home Drugs); include an appropriate diagnosis code indicating possible HIV exposure; include the HCPCS drug procedure code (or an unlisted HCPCS specific to an oral drug) and a valid/active NDC for the drug.
WA SB 6228 (opioid overdose reversal medications and long-acting injectable buprenorphine dispensed/distributed at certain outpatient facilities, effective 01/01/2025): bill each drug on a separate line with Revenue Code 0636 (Drugs requiring detailed coding) or Revenue Code 0253 (Take Home Drugs); include an appropriate substance-use-related diagnosis (F10-F16, F18-F19); include the HCPCS drug procedure code and a valid/active NDC; report appropriate units administered.

Denial Risk

Denial risk & compliance note

Failure to comply with NDC and claim formatting requirements may result in denials, increased auditing, contractual penalties, and/or termination of written arrangements with the plan.

Ensure NDCs are submitted in the required 11-digit format with correct unit/basis and units on the same line as the HCPCS code; missing or incorrect NDC data will result in denial of reimbursement.
Adhere to the electronic ANSI 837I element mappings and UB-04 field requirements to avoid reject/denial: populate LIN02/LIN03 and CPT04/CPT05 on electronic claims and Fields 42–47 as specified on UB-04.
For Washington-specific mandates (WA SB 6127 and WA SB 6228) implement the separate-line revenue code and diagnosis requirements for dates of service on/after 01/01/2025 to ensure compliance and reimbursement.