National Drug Code (NDC) Billing Information

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.

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.

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

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. See an example of NDC qualifier and 5-4-2 format.

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.

See the commonly billed J-codes (PDF) to NDC billing cross-reference guide for more information.

*Therefore, the quantity billed and unit of measure qualifier will rarely match between the HCPC (J-code) and NDC.

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 of NDC qualifiers and 5-4-2 format.