A Complete Guide to NDC codes

June 15, 2021

NDC Code

Have you ever bought prescription medication and seen a series of numbers printed on the package? Ever wondered what the number means and why it is on the package? Well, that number is called the National Drug Code, and this article will explain all about the code, its application, and its role in medical Coding.

National Drug Code

For sale in the U.S, drug manufacturing companies are required to provide a list of all drugs they prepare and process to the FDA. For reporting and identification purposes, each drug is designated a three-segment number known as the NDC.

The NDC serves as FDA’s identifier for drugs, and they publish the listed numbers in the NDC codes directory. The directory has information on certified finished and unfinished drugs as well as active drugs submitted to the FDA. The directory gets updated daily.

What is NDC?

The National Drug Code is a 3-segment number, with unique 10 or 11 digits and serves as a universal product identifier for human drugs. The three segments define the following:

The labeler: The first set of numbers in the NDC denotes the labeler, which can be either the drug manufacturer, distributor, or the party responsible for repackaging. The code is assigned by the FDA.

The product: The second set of numbers called the product code to define specific information about the drug such as formulation, dosage, and strength. Assigned by the labeler.

The package: The third set of codes identifies the package types and sizes, and the labeler is responsible for the assignment of the code.

For billing service and reimbursement purposes, the NDC number is arranged in an 11-digit format with leading zeroes. The NDC Directory contains all prescription medications, over-the-counter medications, and insulin packages.

Drugs for which electronic listings have been submitted to the FDA are included in the NDC directory. Products that are not in the final marketed form including blood products, human drugs, and animal drugs are excluded from the directory.

The NDC number is usually printed on the outer packaging or the drug label. The number is normally less than 11 digits, and you might also notice an asterisk as a placeholder for leading zeros. It is also normal to see information pertaining to the NDC unit of measure for that drug.

Important factors about NDC

The inclusion of drug information in the NDC Directory does not mean that the FDA has verified the data. Instead, the content of each entry in the NDC directory is the responsibility of the labeler.

NDC Code

Inclusion in the NDC Directory or assignment of an NDC number does not mean a product is a drug as defined by federal law. Successful assignment of an NDC code does not mean that the product is approved by the FDA. Any claim regarding the approval status just because it has an NDC number associated with it is purely misleading and in violation of federal law. The NDC directory does not have all the listed drugs.

Excluded from the directory are blood products, animal drugs, drugs manufactured under contract, or drugs that are sold as a part of a combination. The directory contains listing data for products that have crossed the marketing start date but are yet to reach the marketing end date. Assignment of NDC numbers to non-drug products is not allowed. A product included in the NDC directory is not always eligible for reimbursement by insurance companies.

You can use the NDC Lookup to search for the relevant drug based on the NDC number, company name, name, active ingredients by going to https://ndclist.com/

NDC numbers in the billing process

When submitting a claim for reimbursement for a medical drug, it is a good idea to check with your payer to determine the specifics of reimbursement and NDA code, since there are varying rules. For instance, some Medicaid plans exclude the use of NDC codes for vaccines. Most players have proper guidance on the usage of NDC numbers.

Another common question that arises is if NDC requirements apply to members who are dual-eligible for both Medicare and Medicaid? Affirmative. For dual-eligible members, it is required by CMS that the NDC number be included on claims.

NDC numbers with 11 digits

The NDC number is normally 10-digit, but for certain purposes, 11-digit NDC may be used. These include proper billing of drug products and the reimbursement process that follows. Government entities like the Centers for Medicare and Medicaid Services require the NDC as part of the billing and claim process.

NDC Billing

These entities, including HIPAA, may require the NDC code in a format that has 11-digits with leading zeros. Also, many private payers and insurance vendors are also increasingly asking for the 11-digit format to process bills.

Updating the NDC Directory

The FDA does not submit or alter listing data on its own. The authenticity and accuracy are the responsibility of the company or labeler when submitting the data to the FDA. Therefore, it is up to the particular company to submit new or revised product listings through SPL, for the purpose of either adding or correcting information in the NDC directory. However, FDA does monitor the integrity and accuracy of the provided information based on their compliance program.

Final Thoughts

When it comes to medical billing and claims, NDCs help facilitate more accurate payment and better management of drug costs, based on what was administered and billed.

To save administrative time and effort in reviewing denials and resubmissions, vendors systematically verify the 11- digit NDC, and appropriate use of NDC units and HCPCS/CPT units submitted by providers. That is unless the HCPCS or CPT code is a NOC or NOS code.

Moreover, NDC pricing is normally updated on a monthly basis to reflect changes in drug cost.

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