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Drug Administration Policy

HealthChoice requires providers to indicate the name of the drug being administered on claim submissions, even if reimbursement is not being requested for the drug. HealthChoice will not pay for the administration charge unless the drug being administered is covered and medically necessary. If the provider is billing drug-related revenue, HCPCS or CPT codes, the claim must indicate the drug’s national drug code (NDC), quantity and unit of measure. 

This policy applies to all professional and hospital outpatient claims containing drug-related revenue, HCPCS or CPT codes which must be billed with the NDC indicated on the container from which the medication was administered. The NDC is not required for G codes and P codes, routine childhood and adult immunization drug codes. The NDC must be 11 digits (5 digits-4 digits-2 digits) in order for it to be accepted; however, there are times when the NDC on the container does not contain 11 digits. In this case, you will add preceding zeroes to the section of the NDC that does not follow the 5-4-2 format. 

The drug-related revenue, HCPCS or CPT codes will need to indicate the number of units for reimbursement purposes as defined in the description of the code being billed. You must include the NDC units to report the units being administered. Both are required on the claim for accurate reimbursement. To bill NDC units, the unit of measurement and the quantity (including decimals) are required. Acceptable units of measurement are GR for gram, ML for milliliter, UN for unit, and international unit F2. For example, if the provider administers two .75 milliliter vials, you would report ML1.5. 

You may have multiple NDCs when you administer multiple drug strengths to a patient or when a drug is comprised of more than one ingredient. Submit each NDC number as a separate claim line with the appropriate revenue, HCPCS or CPT drug code. There are standard billing modifiers to use when there is more than one NDC for a service code. For paper claims, use KP (the first drug of a multiple drug formulation) and KQ (the second or subsequent drug of a multiple drug formulation). For electronic claims, report compound drugs by repeating the LIN and CPT segments in loop 2410. If the box for the drugs contains more than one medication, use the NDC number found on the box. However, if the box for the drugs contains multiple vials of the same medication, use the NDC number found on the vial. There are exceptions when drug manufacturers don’t provide pricing at the individual vial level. Generally, only NDC numbers with available pricing are considered valid. In these instances, you should bill using the NDC information from the outside packaging and include the correct units administered. 

CMS 1500 form: 

  • Enter the NDC information in field 24. There are six service lines in field 24 with shaded areas.
  • Place the NDC information in the line’s top shaded part.
  • Enter any supplemental NDC information in the following order:
    • N4 qualifier.
    • 11-digit NDC code.
    • Add one space.
    • Two-character unit of measurement and quantity.

UB-04 form: 

  • Field 42: Include the appropriate revenue code.
  • Field 43: Include the 11-digit NDC code, unit of measurement and quantity.
  • Field 44: Include the HCPCS code if required.

EDI requirements for professional (837p) and institutional (837i) claims: 

Loop Segment Element name Information  
2410 LIN 02 Product or service ID qualifier. If billing for an NDC, enter N4.
2410 LIN 03 Product or service ID qualifier. If billing for drugs, include the 11-digit NDC.
2410 CTP 04 Quantity. If an NDC was submitted in LIN03, include the administered NDC quantity.
2410 CTP 05-1 Unit or bases for measurement code. If an NDC was submitted in LIN03, include the unit or basis for measurement code for the NDC billed. See Q6 for unit information.
2410 REF 01 VY: link sequence number.XZ: prescription number. The link sequence number is used to report components for compound drug.
2410 REF 02 Link sequence number or prescription number.  

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