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How to Submit Claims for Provider Administered Drugs

Health Care Reform legislation initiated changes to utilization reporting requirements for Medicaid Managed Care Organizations. The new reporting requirements impact rebates issued by drug manufacturers to the Texas Health and Human Services Commission (HHSC). To comply with the legislation, providers are required to submit claims for provider administered medications using National Drug Codes (NDCs), Unit of Measurement, and Quantity of Unit. The NDC is a unique 11-digit, 3-segment numeric identifier assigned to each medication listed under Section 510 of the U.S. Federal Food, Drug, and Cosmetic Act.

This is a reminder of how to submit claims for physician administered medications dispensed to Texas Medicaid STAR, CHIP, and STAR Kids members by professional providers in the outpatient setting. In addition to drugs, long acting reversible contraceptives such as intra uterine devices (IUDs), hormone patches, vaginal rings, and sub dermal implants are included as well as intra uterine copper device.

Requirements At-A-Glance

Most NDCs are 11 digits and appear in a 5-4-2 format; do not include the hyphens when billing
11-digit NDCs in the 5-4-2 format must be used when billing claims, which means that NDCs with fewer than 11 digits need to be converted
The qualifier N4 must precede the NDC for both electronic and paper claims
Include the Unit of Measurement: F2 - International unit, GR - Gram, ME - Milligram, ML - Milliliter or UN - Unit
Include the NDC Unit

How to Convert NDCs with Fewer than 11 Digits

NDCs with fewer than 11 digits are missing a digit from one of the 5-4-2 segments. This is easily corrected by inserting a zero for the missing digit. Below are some helpful examples.

Examples of NDCs with fewer than 11-digits and solutions for converting them using zeroes
0002-7597-01 Zyprexa^® 10mg vial Problem: A digit is missing from the first segment. It should have five digits to be in the required 5-4-2 format.	00002759701 Solution: Adding a zero to the first segment converts the NDC into the correct format.
50242-040-62 Xolair^® 150mg vial Problem: A digit is missing from the second segment. It should have four digits to be in the required 5-4-2 format.	50242004062 Solution: Adding a zero to the second segment converts the NDC into the correct format.

How to Convert NDCs with Fewer than 11 Digits (continued)

Examples of NDCs with fewer than 11-digits and solutions for converting them using zeroes
60575-4112-1 Synagis ^® 50mg vial Problem: A digit is missing from the third segment. It should have two digits to be in the required 5-4-2 format.	60575411201 Solution: Adding a zero to the third segment converts the NDC into the correct format.

Tips for Using NDCs When Submitting Paper Claims CMS 1450 (UB-04)

Block	Description	Guidelines
43	Revenue codes and description	Enter N4 and the 11-digit NDC number (the number on the package or container from which the medication was administered). Required: The unit of measurement code and the unit quantity with a floating decimal for fractional units (limited to 3 digits) are also required to be submitted. Do not enter hyphens or spaces within this number. Example: N400409231231GR0.025

CMS-1500

Block	Description	Guidelines
24A	Dates of service	In the shaded area, enter the NDC qualifier of N4 and the 11-digit NDC number (the number on the package or container from which the medication was administered). Do not enter hyphens or spaces within this number. Example: N400409231231
24D	Procedures, services, or supplies	Required: In the shaded area, enter a 1- through 12-digit NDC quantity of unit. A decimal point must be used for fractions of a unit.
24G	Days or units	Required: In the shaded area, enter the NDC unit of measurement code. F2 - International unit, GR - Gram, ME - Milligram, ML - Milliliter or UN - Unit

Tips for Using NDCs When Submitting Electronic Claims

Loop	Segment	Element Name	Information	Sample
2410	LIN02	Product or Service ID Qualifier	Enter product or NDC qualifier N4	LIN*N401234567891~
2410	LIN03	Product or Service ID	Enter the NDC	LINN401234567891*~
2410	CTP04	Quantity	Enter quantity billed	CTP***2UN~
2410	CTP05-1	Unit of Basis for Measurement Code	Enter the NDC unit of measurement code: F2: international unit GR: gram ML: milliliter UN: unit ME: milligram	CTP***2UN~
2410	REF01	Reference ID Qualifier (Used to report Prescription # OR Link Sequence Number when reporting components for a Compound Drug)	VY: Link Sequence Number XZ : Prescription Number	REF01XZ123456~
2410	REF02	Reference Identification	Prescription Number OR Link Sequence Number	REF01XZ123456~

Tips for Multiple NDC Numbers for Single HCPCS Codes

If there is more than one NDC within the Healthcare Common Procedure Coding System (HCPCS) code, submit each applicable NDC as a separate claim line. Each drug code submitted must have a corresponding NDC.

If a drug is comprised of more than one ingredient, such as a compound drug or the same drug in a different strength, each NDC must be entered using the same drug code.

Use one of the following modifiers accepted by standard HCPCS billing when more than one NDC is billed for a service code:

KP — First drug of a multiple drug unit dose formulation
KQ — Second or subsequent drug of a multiple drug unit dose formulation
SH — Second or concurrently administered infusion therapy
SJ — Third or more concurrently administered infusion therapy

For More Information

If you have any questions, please contact the Customer Service at 1-877-560-8055.