National Drug Code Requirements (2024)

Last Updated on September 15, 2021

National Drug Code (NDC) numbers are unique 11 digit identifiers for drugs; they provide full transparency as to the manufacturer, drug name, dosage, strength and package size of the drug. The 11 digit NDC is composed of three segments in a 5-4-2 format. If the NDC on the label does not include 11 digits, a leading zero should be added to the appropriate segment of the NDC to complete the 5-4-2 configuration.

Example:
1111-1111-11 = 01111-1111-11
11111-111-11 = 11111-0111-11
11111-1111-1 = 11111-1111-01

Security Health Plan requires NDC’s on drug related services for all professional claims and facility claims for outpatient hospital services. This requirement applies to CMS-1500 and UB-04 paper claims as well as 837P and 837I Electronic Data Interface (EDI) transactions when billing for drug-related revenue codes, HCPCS and CPT codes.

The NDC must be submitted with:

• A valid 11 digit NDC number without dashes or spaces
• Unit of measure qualifier
• Units (quantity or number of units)

If a NDC is not indicated on the claim, or if the NDC indicated is invalid, the claim will be denied.

CMS-1500 Claim Form

NDCs for drug-related services must be indicated in the shaded area of Item Numbers 24A-24G (see example below). The NDC must be accompanied by a NDC qualifier, unit of measure qualifier, and units. To indicate a NDC, providers should do the following:

• Indicate the NDC qualifier N4 followed immediately (no space) by the 11-digit NDC of the drug dispensed with no spaces, hyphens or other characters
• Enter one space between the NDC and the unit of measure qualifier
• Enter the appropriate unit of measure qualifier
  • F2 [International unit]
  • GR [Gram]
  • ME [Milligram]
  • ML [Milliliter]
  • UN [Unit]
• Immediately following the unit of measure qualifier indicate the NDC unit quantity, with no space in between
  • The number of digits for the quantity is limited to eight digits before the decimal and three digits after
• 24D Enter the appropriate CPT/HCPCS code
• Complete all other applicable fields as appropriate

UB-04 Claim Form

• Field 42: Include the appropriate revenue code
• Field 43:
  • Enter NDC qualifier N4 (left-justified) followed by the valid 11 digit NDC of the drug dispensed, with no space in between
  • Enter the appropriate unit of measure qualifier, with no space between the NDC and the unit of measure qualifier
    • F2 [International unit]
    • GR [Gram]
    • ME [Milligram]
    • ML [Milliliter]
    • UN [Unit]
  • Enter the unit quantity (number of NDC units), with no space between the qualifier and the unit quantity
    • The decimal point is floating and the numbers to the right of the decimal point are restricted to three
• Field 44: Include the HCPCS code if required
• Complete all other applicable fields as appropriate

Electronic Data Interface (EDI) transactions 837P and 837I

Security Health Plan follows 5010 HIPPA compliant data requirements when exchanging electronic data.

For more information on 837 Electronic submissions visit

https://www.securityhealth.org/providers/tools-and-resources/electronic-data-interchange.

Multiple NDCs

If multiple NDCs need to be reported due to different drug strengths being administered or when a drug is comprised of more than one ingredient, each NDC should be reported on a separate service line following the below steps. Do not submit multiple NDCs on a single service line.

• Paper claim forms:
  • The CPT/HCPCS code should be repeated on separate service lines for each unique NDC.
  • A KP modifier (first drug of multiple drug unit dose formulation) is required on the first service line and a KQ (second or subsequent drug of a multiple drug unit dose formulation) is required on the second service line.
• Electronic claims:
  • Each NDC will have the 2400 loop repeated as necessary with the NDC information contained in the 2410 loop as indicated in the Electronic Data Interface (EDI) transactions 837P and 837I section above.

Frequently Asked Questions

Do claims for drugs billed through a hospital outpatient department require NDC information?

Yes, effective for dates of service 4/1/2020, the NDC information is required for separately reimbursable drugs submitted for reimbursem*nt on hospital outpatient claims, including drugs billed without a HCPCS or CPT code.

Will claims with NDC information be subject to any additional clinical edits?

Yes, the following claims edits will still be applied during processing:

• NDC and HCPCS verification edits identify if the NDC number and HCPCS codes do not match.
• NDC max unit edits target drugs that have specific strengths where the claim exceeds the expected number of units.
• Inactive NDC number edits look for inactive or obsolete drugs.
• Post-Service Claim Edits and Prior Authorization requirements. Visit our ‘Pharmaceuticals – Specialty Medications (Magellan)’ page under the Utilization Management section of the provider manual for more information or our ‘Medical Pharmacy’ page found on the top toolbar at https://www.securityhealth.org/providers.

Can a corrected claim be submitted if a drug claim line is denied because it doesn’t include the correct NDC information?

Yes. You can resubmit that claim with complete NDC information within the timely filing guidelines if:

• A claim line is denied because it did not include complete NDC information.
• A claim line is denied because the NDC is invalid or doesn’t match the HCPCS or CPT code.

If any payment was made on the original claim the corrected claim must be submitted following the guidelines outlined on the ‘Corrected Claim or Adjustment Requests’ page under the Claim Processing Policies and Procedures section of the provider manual. If the claim is not submitted as a correction, it will be denied as a duplicate claim.