1. Department of Medical Assistance Services
New National Drug Code (NDC) Billing Requirement for Pharmacy Claims Submissions (UB04/837I)
Keith Hayashi, R.Ph.
Department of Medical Assistance Services
June 3, 2008

2. Presentation Outline
Overview
Schedule
Implementation

3. Overview
Section 6002 of the 2005 Deficit Reduction Act (DRA) requires states to collect and submit utilization and coding information for single and multi-source physician-administered drugs.

4. Physician-Administered Drugs in Physician Settings
Trained hospitals & health systems
Submitted invoices to manufacturers for rebates on Crossover single source, physician-administered drugs using HCPCS codes (J-codes) in August 2006.
Retrospectively invoiced manufacturers back to June 2003 for rebates on past Crossover claims for physician-administered drugs (DMAS continues to invoice manufacturers).
Began collecting rebates on all multi-source, physician-administered drugs submitted on the CMS 1500 and the ACS X12 837P effective July 1, 2007.
The quantity of each NDC and units of Measure was required effective January 1, 2008.

5. Physician-Administered Drugs in Outpatient Hospital Settings
January 1, 2008: Mandate was to become effective
December 12, 2007: DMAS sent letter to CMS requesting an 18-month extension
Cited the burden placed on hospitals & health systems in terms of costs, systems & vendor issues
Virginia Hospital and Healthcare Association reviewed draft letter
CMS granted a 6-month extension
(July 1, 2008)

6. Timeline (Continued)
April 2008: DMAS requested another extension--until January 1, 2009
May 2008: CMS denied request
July 1, 2008: IMPLEMENTATION DATE

7. Implementation Bottom Line
Effective July 1, 2008, DMAS will require hospital providers who bill drug products administered in an outpatient hospital setting to include National Drug Code (NDC) information for the drug dispensed on all electronic (ASC X12N Health Care Claim: Institutional 837I) and paper claim (Universal Billing (UB) form) submissions.

8. DMAS Actions to Date Formed workgroup with hospitals
VHHA participation
Distributed a Medicaid Memo on April 2, 2008

9. Valid NDCs
Correctly formatted number using the format (e.g., )
11 digit code unique to the manufacturer of the specific drug or product administered to the recipient
If compound medication with more than 1 NDC in the medication dispensed, each NDC must be submitted as a separate claim line to include both prescription and over-the-counter ingredients.
Each claim line submitted with pharmacy revenue codes & will require the NDC information.
Outpatient hospital claims submitted without a valid NDC will have the revenue code line reduced to a non-covered service line.

10. Paper Claim Form (UB04)

11. Locator 42 (Revenue Code)
Enter Revenue Code
42. REV CD
0250
0362

12. Locator 43 (Description)
Enter the NDC qualifier of N4
The 11-digit NDC number
The unit of measurement
Metric decimal quantity or unit
Do not enter a space or hyphen between the qualifier & NDC, nor within the NDC nor between the Unit of Measurement qualifier nor the unit quantity.

13. Locator 43 (continued)
If same RX is dispensed in different package sizes, each package size MUST be listed separately using the revenue code, N4 qualifier and all required information on separate lines.
Different package sizes of the same drug will NOT be viewed as a duplicate claim by the system.

14. Example of Locator 43 (Description)
Reminder- No spaces or hyphens

15. Locator 44 (HCPCS/Rate/HIPPS Code)
Enter the HCPCS code, if available.
Invalid HCPCS codes will result in the claim being denied.
44. HCPCS/RATES/HIPPS Code
J1234
S0077

16. Locator 46 (Serv Units)
Enter the HCPCS units when a HCPCS code is in Locator 44.
Locator 46. Serv Units- This is currently being done, there is no change

17. Converting NDCs from 10-Digits to 11-digits
10-Digit Format on Package
10-Digit Format Example
11-Digit Format
11-Digit Format Example
Actual 10-Digit NDC Example
11-Digit Conversion Example
4-4-2
5-4-2
Zyrexa® 10 mg Vial
5-3-2
Xolair® 150 mg Vial
5-4-1
Synagis® 50 mg Vial

18. Submitting NDC-Related Data Via the 837 Institutional Claim Format (ASC X12 837I V4010 A1)

19. Procedure Code & Units
Defined in the 2400 loop, segment SV2, composite data element SV202.
No NDCs should be sent in this segment.
SV202 must contain the HCPCS code, if one exists.
SV204 defines the Unit Base of Measurement Code. Units must be defined as Unit, Days, or International Unit.
SV205 defines the quantity based on the Basis of Measurement in SV204.

20. Drug Identification NDC should be sent in the 2410 loop LIN segment.
2410 loop can be repeated 25 times within a service line.
DMAS will capture only the 1st occurrence of the LIN segment for each revenue line.
When billing for a compound Rx, then each applicable NDC must be sent as a separate revenue line

21. Loop 2410 (Continued) LIN: identifies the NDC
LIN02 must contain the qualifier N4
LIN03 must contain the NDC in the format
CTP: identifies drug pricing
CTP03:drug unit price- DMAS will not be validating nor using, providers can default a value since the segment is required.
CTP04: NDC quantity
CTP05: composite unit of measure
CTP05-1: unit or basis for measurement code
For complete information please refer to the 837I Guide

22. Systems Testing Systems Testing-Paper Claims:
Bonnie Winn ( ) or
Electronic Claims Testing:
EDI Technical Help Desk
( )

23. Additional Resources
837I Companion Guide
DMAS Provider Helpline
(804) (Richmond)
(800)
This presentation and Medicaid Memo (April 2, 2008) are available on DMAS’s website

24. Questions

25. THANK YOU!