New National Drug Code (NDC) Billing Requirement for Pharmacy Claims Submissions (UB04/837I)

1. 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 5-4-3 format (e.g., 99999888877) • 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 0250-0259 & 0630-0639 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

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.

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

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 5-4-2 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 (804-786-2621) or bonnie.winn@dmas.virginia.gov • Electronic Claims Testing: • EDI Technical Help Desk (800-924-6741)

23. Additional Resources • 837I Companion Guidehttps://virginia.fhsc.com/hipaa/CompanionGuides.asp • DMAS Provider Helpline (804) 786-6273 (Richmond) (800) 552-8627 • This presentation and Medicaid Memo (April 2, 2008) are available on DMAS’s website www.dmas.virginia.gov

24. Questions

25. THANK YOU!