National Drug Codes for Medi-Cal Claims
Provider Type
- Physicians
- Participating Physician Groups (PPG)
- Hospitals
- Ancillary
In accordance with Department of Health Care Services (DHCS) requirements, providers must submit claims with a valid National Drug Code (NDC) in conjunction with the customary HCPCS Level I, II or III codes, when appropriate, on claims submitted for medication reimbursement. Claims received without the appropriate NDC and HCPCS codes are contested. For Medi-Cal claims, both the CMS-1500 and UB-04 claim forms require valid NDC information.
When the health plan receives a Medi-Cal claim with both an NDC and a HCPCS code, the health plan applies line-level claim edits to determine:
- Is the NDC valid?
- Is the HCPCS code valid?
- Is the NDC/HCPCS code combination valid?
If the response to any of the above questions indicates an invalid code or invalid code combination, the health plan will contest the claim to ask for corrected billing.
NDC Billing Requirements: Medication Billed Separate from Service
Providers are required to use a valid NDC when a medication is billed separate from a service. The following chart outlines the NDC requirements:
Type of Claim | NDC |
|---|---|
Medicare/Medi-Cal crossover | Not required. |
Fee-for-service Medi-Cal as primary | Required when the medication is billed independent of the service. |
Medi-Cal as secondary (other health coverage) | Required when the medication is billed independent of the service. |
California Children's Services (CCS) | Required when the medication is billed independent of the service. |
Genetically Handicapped Persons Program (GHPP) | Required when the medication is billed independent of the service. |
Presumptive eligibility | Required when the medication is billed independent of the service. |
Cancer Detection Program: Every Woman Counts (CDP: EWC) | Required when the medication is billed independent of the service. |
Compound Medications
Compound medications dispensed in an outpatient hospital environment are not exempt from the NDC billing requirement. Each medication dispensed should be entered on a separate line of the CMS-1500 or UB-04 claim form using the appropriate NDC and HCPCS Level I, II or III codes. Only the claim lines for the physician-administered medication is contested if the NDC information is missing or invalid. All other claim lines are processed accordingly.
Description of Medications with HCPCS Level III Codes
In addition to NDC billing requirements, providers are required to describe medications used with a HCPCS Level III code, such as Z7610 (miscellaneous supplies), or a procedure code, such as 90779 (therapeutic injection), in the Reserved for Local Use field (Box 19) on the CMS-1500 claim form, or the Remarks field (Box 80) on the UB-04 claim form. Any medications administered or dispensed for such codes still require a description and valid NDC information on these forms.
Family PACT providers are exempt from reporting the NDC in conjunction with Z7610.