October/November 2007 Federal Deficit Reduction Act (DRA) October/November 2007

October/November 2007

Federal Deficit Reduction Act(DRA)

October/November 2007

2 October/November 2007Federal Deficit Reduction Act (DRA)

Agenda• Background

• Covered labelers

• NDC configuration• Billing principles• NDC quantity• Claim filing• Codes requiring manual review• Adjustments• Remittance advice• Electronic rejections• Explanation of Benefits (EOB)• DESI drugs• Record retention• Billing tips• Q & A


Background

•The Federal Deficit Reduction Act of 2005 mandates that Medicaid require the submission of National Drug Codes (NDCs) on claims submitted with procedure codes for drugs administered. The purpose of this requirement is to assure that the states obtain a rebate from those manufacturers who have signed a rebate agreement with the Centers for Medicare and Medicaid Services (CMS).


Background

•This requirement is applicable to claims with a date of service on or after January 1, 2008, and applies to professional and outpatient institutional claims. This will apply to the following claim transactions:

–Electronic claims (837P and 837I Outpatient)

–DDE (837P and 837I Outpatient)

–Paper CMS-1500 claims

–Paper CMS-1450 (UB-04) claims (Outpatient)


Covered labelers


•A pharmaceutical manufacturer that has entered into a federal rebate agreement with the Centers for Medicare and Medicaid Services (CMS)

•First segment of NDC

•www.medicaid.state.ar.us

Covered labelers






• Effective date: The date a manufacturer entered into a rebate agreement with CMS

• Termination date: This date indicates that the manufacturer no longer participates in the federal rebate program and therefore the products cannot be reimbursed by Arkansas Medicaid for dates of service outside the rebate participation date.


NDC configuration


Definitions

•National Drug Code (NDC): National Drug Code (NDC) is a unique 10-digit, three-segment number assigned by the Food and Drug Administration (FDA)

•NDC Termination Date: The shelf-life expiration date of the last batch produced, as supplied on the Centers for Medicare and Medicaid Services (CMS) quarterly update. This date is supplied to CMS by the drug manufacturer/distributor.


NDC configuration

•First segment: Labeler code (5-digits)– Labeler: Any firm that manufactures, repacks, or

distributes a drug product

•Second segment: Product code (4-digits)

– Identifies a specific drug, strength, and dosage form of drug

•Third segment: Package code (2-digits)– Identifies the package size

5-4-2 format


NDC configuration

http://www.medicaid.state.ar.us

PACKAGE CODE

(2 digits)

PRODUCT CODE

(4 digits)

LABELER CODE

(5 digits)

78045600123


• NDCs submitted must use 11-digit format

• No dashes or spaces

0111104567101111 456 71

011112222331111-2222-33

1234567890112345 6789 1

Required 11-digit NDC(5-4-2) Billing Format

10-digit FDA NDC on PACKAGE

NDC configuration


NDC configuration example

•Providers must bill the NDC on the label of the drug that is administered


Billing principles


NDC billing principles

•Enlist the cooperation of all staff to assure collection or notation of NDC from actual package used

•Billing of NDCs should not be based on a reference list due to varying NDC:

–Labelers

–Package sizes

–Time periods

•There is not a requirement for an NDC when billing vaccines


•The HCPCS/CPT code billing units and NDC quantity do not always have a one-to-one relationship. The NDC quantity is based on the strength of the drug administered per unit, and the designated strength of the HCPCS/CPT code.

About the NDC quantity


NDC and HCPCS/CPT code quantityExample


HCPCS/CPT Code Unit = 1

(one 25 mg unit of Drug B)

NDC Quantity = 5 for the 5 ml administered

Waste = 5 ml or 25 mg(for the 5 ml or 25 mg not administered)

Example NDC and HCPCS/CPT code quantity


Claim filing


PES version 2.08


837 Professional Service 2 tab Billing instructions – PES


837 Professional RX tab Billing instructions – PES


Billing instructions – PES837 Institutional Outpatient Service tab


837 Institutional Outpatient RX tabBilling instructions – PES


Billing instructions – DDEProfessional


Billing instructions – DDEInstitutional Outpatient


Billing instructions – Vendor

• If billing electronic claims using vendor software, check with your vendor to ensure your software will be able to capture criteria necessary to submit claims

•Vendor companion guides: https://www.medicaid.state.ar.us/InternetSolution/Provider/hipaa/compan.aspx


To report the NDC on the CMS-1500 claim form, providers must enter the following information into the shaded portion of fields 24A to 24H

1. Enter the NDC qualifier of N4

2. Enter the NDC 11-digit numeric code

3. Enter the NDC Unit qualifier• F2 – International Unit• GR – Gram• ML – Milliliter• UN – Unit

4. Enter the NDC Quantity (Administered/Billed Amount) in the format 9999.99

Billing instructions – CMS-1500


OutpatientBilling instructions – CMS-1450 (UB-04)


Codes requiring manual review•Sent on paper for review

•DMS-664


Adjustments

•Paper adjustments for paid claims filed with NDC numbers will not be accepted

•The entire claim will have to be voided and a replacement claim will need to be filed

•Providers can adjust a paper claim with NDC numbers or an electronic claim with NDC numbers electronically


Remittance advice

•Reimbursement will not change

•Only the first sequence in a detail will be displayed reflecting the total paid amount or denial EOB


Electronic rejections


3770- Bill specific procedure code for administered drugsThis claim has rejected because the provider has not included an NDC for a HCPCS/CPT code that requires one

3780- Procedure codes and NDC do not matchClaim has rejected because the NDC submitted on the claim is not associated to the HCPCS/CPT code billed



•Claim has rejected because there is no active rebate agreement in place on the DOS for the NDC on the claim

•Arkansas Medicaid will not reimburse for HCPCS/CPT codes with non-payable NDCs

•Providers are responsible for ensuring that the NDC of the drug that they are administering is from a covered labeler

Electronic rejections3790- NDC &/or labeler is not qualified for a rebate or is outside rebate dates


9050- Discontinued drugClaim has rejected because the NDCs CMS termination date is on or before the date of service

9150- DESI drug not payableArkansas Medicaid does not pay for drugs that are less than effective, also known as DESI drugs



Explanation of Benefits (EOBs)


Explanation of Benefits (EOBs)EOB - 905Drug not covered, check NDC, may be obsolete

EOB - 915DESI drug not payable by Medicaid

EOB - 924Procedure code requires NDC(s) for administered drugs


Explanation of Benefits (EOBs)EOB - 925Procedure code and NDC do not match

EOB - 926NDC &/or labeler is not qualified for rebate or is outside rebate dates

EOB - 927Bill specific procedure code for administered drugs


Drug Efficacy Study Implementation (DESI)


Drug Efficacy Study Implementation

•Program administered by the FDA to review the effectiveness of drugs approved between 1938 and 1962

• If the drug indicates a lack of substantial evidence of effectiveness, the FDA will publish its proposal to withdraw approval of the drug for marketing

•HCPCS/CPT codes will not be payable when linked to any NDC with a DESI indicator

(DESI)




Drug Efficacy Study Implementation(DESI)


Record retention


Record retention

•Records must be retained for five years

•Manufacturer may dispute drug rebate

•Requested records may include:

–NDC invoices showing purchase of drugs

–Documentation showing what drug was administered, dosage, route of administration, and waste


Billing tips


Billing tips• Bill HCPCS/CPT codes the same as always

• Make sure your NDC is an 11-digit number without dashes or spaces, using the 5-4-2 format

• Include all NDCs associated with the HCPCS/CPT code

• Determine if the manufacturer is a covered labeler www.medicaid.state.ar.us

• When billing electronic claims, each NDC sequence must have a dollar amount

• Providers billing paper claims with multiple NDCs will require a zero amount after the first NDC sequence

• There is not a requirement for NDC billing of vaccines

• When billing a HCPCS/CPT procedure code that requires review by the state, you must include the DMS -664


Documents

October/November 2007 Federal Deficit Reduction Act (DRA) October/November 2007