National Drug Code (NDC) Billing Information

Section 1927 of the Social Security Act (42 USC 1392r-8), as amended by the Patient Protection and Affordable Care Act (PPACA), permits only drugs from manufacturers (or labelers) who participate in the Medicaid Drug Rebate Program to be compensable by the Medicaid program. This includes drugs dispensed to AmeriHealth Caritas Pennsylvania members.

This is your resource for information about these revisions and what you need to do as a provider.

What is or is not included?

  • Any drug product, including vaccines for adults, brand name or generic, legend or non-legend, sold or distributed by a drug manufacturer (or labeler) who participates in the Medicaid Drug Rebate Program.
  • Excluded from this requirement are drugs dispensed during a hospital inpatient stay and drugs dispensed under the 340B program.

How do I bill?

All claims for outpatient medications must include the National Drug Code (NDC), NDC unit qualifier, and NDC units in addition to the HCPCS codes and HCPCS quantity. This information is required to be collected on all outpatient drug claims in order for the Department of Human Services (formerly the Department of Public Welfare) to bill manufacturers for federal rebates as permitted by the PPACA.

All claims for outpatient drugs will be validated for the presence of a(n):

  1. Valid NDC
  2. NDC that corresponds to the billed HCPCS
  3. Accurate unit of measure for the NDC billed (F2, GR, ML, UN)
  4. NDC quantity within appropriate FDA minimum and maximum levels

Claims not passing all of these validation criteria will be denied.

How can I determine which drugs are included in the Medicaid Rebate Program?

The Centers for Medicare and Medicaid Services website has detailed Medicaid Drug Rebate Program data.

What is the 5-4-2 format for NDC numbers?

All drug products have an 11-digit NDC. Some of the drug manufacturers do not follow the 5-4-2 format. Regardless, if there is a missing digit in the 5-4-2 format, a zero must be added to the beginning of one of the three number sections, whichever section is deficient, in order to bring the number into 5-4-2 claim-submitting compliance. For example:

Example of 5-4-2 Format

What are the differences between medical and pharmacy billing?

Below are the primary differences between medical and pharmacy billing.

Medical claims

  • *Usually billed in mg
  • 1 J-code represents multiple NDCs

Pharmacy claims

  • *Usually billed in ml
  • The NDC is highly specific and should match the vial administered to the member.
  • The NDC must be in the appropriate 5-4-2 format to match our validation file. Refer to the 5-4-2 format explanation above.

* Therefore, the quantity billed and unit of measure qualifier will rarely match between the HCPC (J-code) and NDC.
See the commonly billed J-codes (PDF) to NDC billing cross-reference guide for more information.

I need help converting J-code units to NDC. Do you have a resource?

We have created a commonly billed J-codes user guide (PDF).

Once you have identified the number of J-code units you will bill, simply take these units, divide by the conversion factor—denoted as "CF"—and this will provide the appropriate number of NDC units to bill. The proper NDC unit qualifier has also been listed to ensure that this is properly selected as well.  Let's look at a few examples below:

Examples of NDC Qualifiers