NDC Reporting Guidelines
An NDC is required for pharmaceuticals that are dispensed from a pharmacy and physician-administered drugs in an office/clinic (i.e. FQHC/RHCs, dialysis facilities) or outpatient facility/hospital setting.
* Provider must submit the 11-digit National Drug Code (NDC), found on the vial of medication, associated with the administered drug.
* NDC codes should be reported according to the format set out by the National Drug Code Directory.
* NDC codes contain 3 segments each with a set number of characters.
* NDC codes MUST be billed with the N4 qualifier before the 11 digit NDC code, when billing on a paper claim
* N4 qualifier also applies to EDI claims. Include on EDI claim, open the loop for NDC in the Practice Management System and enter the 11 digit NDC code. The system will electronically insert the N4 qualifier in the correct location upon activating the loop.
Seg 1 Seg 2 Seg3
5 Digits 4 Digits 2 Digits
Labeler Product Size
NOTE: Segments are to run together with no spaces, dashes, or hyphens
Segment 1= Labeler Code; this segment will contain a 5 digit labeler code. Code should be preceded by 0’s (zeros) if the code does not equal 5 digits.
Example: Labeler Code is 56 then the segment entry would be 00056. (Padded with 3 zeros to complete the 5 digit label code)
Segment 2= Product Code; this segment will contain a 4 digit product code. The product code will always be 4 digits and will not require padding with zeros.
Segment 3= Trade Package Size; this segment will contain a 2 digit size code. The trade package size code will always be 2 digits and will not require padding with zeros.
Billing with National Drug Codes
• Blue Cross and Blue Shield of Texas (BCBSTX) reimburses claims submitted with National Drug Codes (NDCs) in accordance with the NDC Fee Schedule posted on the BCBSTX provider website, bcbstx.com/provider, under “Drugs”. The NDC Fee Schedule is updated monthly on the first of each month.
• To locate this information:
** Click the Standards & Requirements tab, then select General Reimbursement Information,
** Enter password, then scroll down to the Reimbursement Schedules and Related
Information area, then go to Professional
** For Blue Choice PPO and HMO Blue Texas, select 2014 Schedules effective July 1, 2014, then scroll down to Drugs.
** For Blue Advantage HMO, select your county from the alphabetical links provided, select 2014 Schedules effective July 1, 2014, select the Specialty, then scroll down to Drugs
• Lower-cost generic medications may be reimbursed with a larger margin compared to higher- cost generic and brand medications.
• Effective June 1, 2014, BCBSTX revised the methodology utilized for determining the allowables for Healthcare Common Procedure Coding System (HCPCS) or Current Procedural Terminology (CPT®,) codes associated with multiple NDCs. The HCPCS or CPT code allowable generally will be equivalent to the lowest NDC allowable associated with the HCPCS or CPT code.
• When drugs are billed under the medical benefit on professional/ancillary electronic (ANSI
837P) and paper (CMS-1500) claims, it is important to include NDCs and related data. Using
NDCs on medical claims facilitates more accurate payment and better management of drug costs based on what was dispensed. Physicians and ancillary providers are encouraged to begin including the NDC information on claims as soon as possible.
• BCBSTX requires inclusion of the NDC along with the applicable HCPCS or CPT code(s) on claim submissions for unlisted or “Not Otherwise Classified” (NOC) physician or ancillary provider administered and supplied drugs. BCBSTX will continue to accept the HCPCS or CPT code elements without NDC information (excluding unlisted or “Not Otherwise Classified” drugs).
• As a reminder, when submitting NDCs on professional/ancillary electronic (ANSI 837P) and paper (CMS-1500) claims to BCBSTX, you must also include the following related information:
** The applicable HCPCS or CPT code
** Number of HCPCS/CPT units
** NDC qualifier (N4)
** NDC unit of measure (UN – Unit, ML – Milliliter, GR – Gram, F2 – International Unit)
** Number of NDC units (up to three decimal places)
** Your billable charge/price per unit
• If you submit claim electronically and you have converted to ANSI 5010, there should be no additional software requirements when NDCs are included on electronic claims. However, please verify with your software vendor to confirm that your Practice Management System accepts and transmits the NDC data fields appropriately. If you use a billing service or clearinghouse to submit electronic claims on your behalf, please check with them to ensure that NDC data is not manipulated or dropped inadvertently.
Billing with National Drug Codes (NDCs) Frequently Asked Questions
1. What is an NDC ?
“NDC” stands for National Drug Code. It is a unique, 3-segment numeric identifier assigned to each medication listed under Section 510 of the U.S. Federal Food, Drug and Cosmetic Act. The first segment of the NDC identifies the labeler (i.e., the company that manufactures or distributes the drug). The second segment identifies the product (i.e., specific strength, dosage form, and formulation of a drug). The third segment identifies the package size and type. For billing purposes, the Centers for Medicare & Medicaid Services (CMS) created an 11-digit NDC derivative, which necessitates padding of the labeler (5 positions), product (4 positions) or package (2 positions) segment of the NDC with a leading zero, thus resulting in a fixed-length, 5-4-2 configuration. (See question 12 for details.)
2. When should NDCs be entered on claims ?
Blue Cross and Blue Shield of Texas (BCBSTX) requests the use of NDCs and related information when drugs are billed on professional and ancillary electronic (ANSI 837P) and paper (CMS-1500) claims. Note: BCBSTX requires inclusion of the NDC along with the applicable Healthcare Common Procedure Coding System (HCPCS) or Current Procedural Terminology (CPT®’) code(s) on claim submissions for unlisted or ‘Not Otherwise Classified’ (NOC) or ‘Not Otherwise Specified’ (NOS) physician administered and physician supplied drugs.
3. Where do I find the NDC ?
The NDC is usually found on the drug label or outer packaging. The number on the packaging may be less than 11 digits. An asterisk may appear as a placeholder for any leading zeros. The label also displays information about the NDC unit of measure for that drug.
4. If the medication comes in a box with multiple vials, should I use the NDC number on the box or the NDC number on the individual vial ?
If the medication comes in a box with multiple vials, using the NDC on the box (outer packaging) is recommended.
5. Which NDC units of measure should I submit on BCBSTX claims to help ensure appropriate reimbursement ?
Listed below are the preferred NDC units of measure and their descriptions:
• UN (Unit) – Powder for injection (needs to be reconstituted), pellet, kit, patch, tablet, device
• ML (Milliliter) – Liquid, solution, or suspension
• GR (Gram) – Ointments, creams, inhalers or bulk powder in a jar
• F2 (International Unit) – Products described as IU/vial or micrograms
Note: ME is also a recognized billing qualifier that may be used to identify milligrams as the NDC unit of measure; however, drug costs are generally created at the UN or ML level. If a drug product is billed using milligrams, it is recommended that the milligrams be billed in an equivalent decimal format of grams (GR). BCBSTX allows up to three decimals in the NDC Units (quantity or number of units) field.
6. What are the advantages of using NDCs ?
Using NDCs on medical claims helps facilitate more accurate payment and better management of drug costs based on what was administered and billed. To save administrative time and effort in reviewing denials and resubmissions, BCBSTX systematically verifies the 11-digit NDC, and appropriate use of NDC units and HCPCS/CPT units submitted by providers, unless the HCPCS or CPT code is a NOC or NOS code. Also, NDC pricing is normally updated on a monthly basis to reflect changes in drug cost.
Converting HCPCS/CPT Units to NDC Units
7. What information do I need to have ready before converting HCPCS/CPT units to NDC units ?
Before you can fill out the claim to bill for a drug, you will need to know the following information:
• Amount of drug to be billed
• HCPCS/CPT code
• HCPCS/CPT code description
• Number of HCPCS/CPT units
• NDC (11-digit billing format)
• NDC description
• NDC unit of measure
Consider the following example for Ciprofloxacin IV 1200 MG (1 day supply):
8. How do I calculate the NDC units ?
Billing the correct number of NDC units for the corresponding HCPCS/CPT codes on your claims is essential. There are two ways to calculate NDC units:
Option 1 – Use Our Online NDC Units Calculator Tool
BCBSTX contracted providers may access the online NDC Units Calculator Tool for assistance with converting HCPCS or CPT units to NDC units. This user friendly tool is available to BCBSTX contracted providers at no cost. (See question 9 for more details on how to access the online NDC Units Calculator Tool.)
Option 2 – Calculate the NDC Units Manually
If you prefer to calculate the NDC units manually, there are several steps you will need to take. Here is a sample manual calculation, using elements from question #7 [Ciprofloxacin IV, NDC 00409-4765- 86, 1200 MG (1 day supply)]:
• The amount of the drug to be billed is 1200 MG, which is equal to 6 HCPCS/CPT units.
• The NDC unit of measure for a liquid, solution or suspension is ML; therefore, the amount billed must be converted from MG to ML.
• According to the NDC description for NDC 00409-4765-86, there are 200 MG of ciprofloxacin in 20 ML of solution (200 MG/20 ML).
• Take the amount to be billed (1200 MG) divided by the number of MG in the NDC description (200 MG). 1200 ÷ 200 = 6
• Multiply the result (6) by the number of ML in the NDC description (20 ML) to arrive at the correct number of NDC units to be billed on the claim (120). 6 x 20 ML = 120
(Additional billing guidelines are included in the Billing with National Drug Codes (NDCs) – Billing Guidelines for Professional Claims)
Submitting NDCs on Professional/Ancillary Claims
11. When submitting NDCs on my claim, what other information will I need to include ?
When submitting NDCs on professional/ancillary electronic (ANSI 837P) or paper (CMS-1500) claims, you must also include the following related information in order for your claim to be accepted and reviewed for possible benefits at the NDC level:
• The applicable HCPCS or CPT code
• Number of HCPCS/CPT units
• NDC qualifier (N4)
• NDC unit of measure (UN, ML, GR, F2)
• Number of NDC units (up to three decimal places
14. Are there any special software requirements to consider when NDCs are included on electronic claims ?
If you have converted to ANSI 5010, there should be no additional software requirements. Please verify with your software vendor to confirm that your Practice Management System accepts and transmits the NDC data fields appropriately. If you use a billing service or clearinghouse to submit electronic claims on your behalf, please check with them to ensure that NDC data is not manipulated or dropped inadvertently.
16. Can you give a billing example ?
HCPCS code J9400 provides a good billing example. A patient receives Ziv-Alfibercept ZALTRAP 400 MG. Zaltrap is available as 200 MG per 8 ML (25 MG per ML) solution, single-use vial, NDC 00024- 5841-01.
For this sample scenario:
• The NDC is 00024-5841-01 (the qualifier is N4)
• The unit of measure is ML
• The quantity (number of J-code units administered) is 400
• The quantity (number of NDC units administered) is 16
On the CMS-1500, the data would be entered as follows: N400024584101 ML16
17. How many decimal places are allowed in the NDC units field* ?
BCBSTX allows up to three decimals in the NDC units (quantity or number of units) field. The more specific your claim is, the more accurate the reimbursement, if any, will be.
18. How do I determine if the NDC is valid for the date of service ?
When billing with NDCs on professional/ancillary electronic (837P) or paper (CMS-1500) claims, it is important to ensure that the NDC used is valid for the date of service. This is because NDCs can expire or change. An NDC’s inactive status is determined based on a drug’s market availability in nationally recognized drug information databases.
Additionally, an NDC is considered to be obsolete two years after its inactive date. It is a good idea to conduct a periodic check of records or automated systems where NDCs may be stored in your office for billing purposes. To help ensure that correct reimbursement is applied, the 11-digit NDC on your claim should correspond to the active NDC on the medication’s outer packaging. Inactive products will continue to be reimbursed until they become obsolete.
19. What if I do not include the NDC and/or related data ?
In accordance with Texas Administrative Code (28 TAC 21.2803), NDC is not a required data element. If NDC data is submitted appropriately, reimbursement will be based on the NDC, as posted on the BCBSTX Provider website at bcbstx.com/provider. If the correct combination of both the HCPCS/CPT code and the NDC data is not submitted, reimbursement will be based on the appropriate HCPCS or CPT code reimbursement, as posted on the BCBSTX Provider website.
20. How do I obtain NDC pricing information ?
The standard NDC Reimbursement Schedule is available in the Standards and Requirements/General Reimbursement Information section of the BCBSTX Provider website at bcbstx.com/provider.
21. What if the reimbursement does not match the NDC allowable amount on the BCBSTX Reimbursement Schedule ?
First, review the NDC information you submitted. The NDC allowance on the NDC Reimbursement Schedule equals one NDC unit of measure. Reimbursement will be based on the actual ratio of HCPCS/CPT to NDC units of the product/service billed.
While some drugs may be administered as partial NDC units (i.e., 0.5 or 0.7), others may be 1 unit or multiple NDC units (i.e., 2 or 5). The correct NDC units billed (whether partial, single or multiple) should be used as the multiplier to determine the actual allowed amount.