An NDC denial occurs when a healthcare insurance claim for a drug is rejected because the National Drug Code (NDC) information submitted is incorrect, incomplete, missing, or does not match the associated procedure codes. This type of denial prevents the healthcare provider from receiving reimbursement for the administered or supplied medication.
Key Reasons for an NDC Denial
Claims may be denied if the NDC information on the submission is problematic in several ways:
- Missing NDC: The required National Drug Code is entirely absent from the claim form.
- Invalid NDC: The submitted NDC does not conform to the standard 10 or 11-digit format, or it's an incorrect code for the drug.
- Incomplete NDC: Essential segments of the NDC (e.g., labeler, product code, package size) are missing.
- Mismatch with HCPCS/CPT: The NDC provided does not accurately correspond with the HCPCS (Healthcare Common Procedure Coding System) or CPT (Current Procedural Terminology) code that was billed for the drug or service.
Understanding the Codes
To fully grasp NDC denials, it's crucial to understand the codes involved:
- National Drug Code (NDC): This is a unique, three-segment, 10-digit or 11-digit numerical code assigned by the U.S. Food and Drug Administration (FDA) to prescription and over-the-counter human drug products. It identifies the manufacturer (labeler), specific product (drug, strength, dosage form), and package size. More information on NDCs can be found on the FDA website.
- HCPCS Codes: These are standardized codes primarily used by Medicare and other health insurance programs to describe medical, surgical, and diagnostic services and procedures. HCPCS codes are divided into two main levels:
- Level I (CPT Codes): Maintained by the American Medical Association (AMA), these codes describe medical, surgical, and diagnostic services performed by physicians and other healthcare professionals.
- Level II Codes: Maintained by the Centers for Medicare & Medicaid Services (CMS), these codes describe non-physician services, ambulance services, durable medical equipment, prosthetics, orthotics, and supplies, including drugs not found in CPT. You can learn more about HCPCS on the CMS website.
- CPT Codes: A subset of HCPCS Level I, CPT codes are vital for accurate billing and coding in healthcare.
Impact and Resolution
When a claim is denied due to an NDC issue, it signifies a temporary halt in the reimbursement process for the administered medication. However, these denials are typically rectifiable. Healthcare providers can resubmit the claim once the appropriate and accurate NDC information has been provided. This allows the payer to reconsider the claim for reimbursement.
Practical Insights and Prevention Strategies
Preventing NDC denials is crucial for efficient revenue cycle management. Common reasons for these errors include:
- Data Entry Mistakes: Simple typos, transposing numbers, or selecting an incorrect NDC from a dropdown menu.
- Incorrect Dosage/Packaging: Billing with an NDC that represents a different strength, dosage form, or package size than what was actually administered.
- Outdated Information: Using NDCs for discontinued drugs or those with updated codes.
- Lack of Specificity: Not including the full, required 11-digit NDC where necessary.
To minimize NDC denials:
- Verify Accuracy: Always double-check the NDC directly from the drug's packaging or vial against the information entered into the billing system.
- Cross-Reference Codes: Ensure a precise match between the NDC and the corresponding HCPCS or CPT code used for the drug's administration.
- Stay Updated: Regularly review payer-specific policies regarding NDC requirements and drug code updates.
- Leverage Technology: Utilize billing and electronic health record (EHR) systems that can help validate NDC formats and automate cross-referencing with procedure codes, reducing manual errors.
- Staff Training: Provide continuous training to billing and clinical staff on proper NDC identification and documentation.
