Medicare NDC vs. FDA NDC

I was recently approached by one of our clinic customers which seeks Medicare or Medicaid reimbursement for pharmaceuticals dispensed to patients.  She asked me why the NDC (National Drug Code) for PCA labeled medications was only 10 digits while Medicaid was telling her that it requires an 11 digit NDC on its reimbursement application.  Many of our clinics stay out of the reimbursement game and only accept cash so this was the first time I had heard this question.  Looking into it, I discovered that the Deficit Reduction Act of 2005 requires states to collect rebates (from manufacturers) for physician administered medications.  This means they need to collect NDC information on products dispensed by physicians.

The NDC was created by the FDA and consists of 10 digits that identify the manufacturer, the product and the size of the product.  The first four or five digits identify the manufacturer, the second 3 or 4 digits identify the product and the last 1 or 2 digits identify the size.  For example, PCA Pharmaceuticals offers Lisinopril 5mg in 30 count bottles; the NDC for this product is 51655-232-24.  51655 indicates PCA, 232 indicates Lisinopril and 24 indicates a count of 30 tablets (that is FDA logic :).  The Medicare standard looks for 11 digits in an NDC so any NDC’s less than 11 need to be augmented with a 0.  The Medicare NDC requires a 5 digit-4 digit-2 digit format.  In the case of PCA’s Lisinopril product, this means that a 0 would be added before the second set of digits with the new NDC being 51655-0232-24.  Unfortunately for our clinic, the agency denied the claim but was not able to explain the logic to her.  The best explanation I’ve found is on the State of Massachusetts Health and Human Services website.

Medication dispensing with PCA focuses on cash pay customers but there are opportunities for clinics providing workers compensation services.  Clinics implementing our physician dispensing solution will be given any support needed to optimize this extra service relative to the focus of the practice.

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