October/November 2007 October/November 2007

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

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 2 October/November 2007

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). 3 October/November 2007

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) 4 October/November 2007

Covered labelers 5 October/November 2007

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 6 October/November 2007

7 October/November 2007

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. 11 October/November 2007

NDC configuration 12 October/November 2007

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. 13 October/November 2007

NDC configuration 5-4-2 format 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 14 October/November 2007

NDC configuration 00123 LABELER CODE (5 digits) 0456 PRODUCT CODE (4 digits) 78 PACKAGE CODE (2 digits) http://www.medicaid.state.ar.us 15 October/November 2007

NDC configuration NDCs submitted must use 11-digit format No dashes or spaces 10-digit FDA NDC on PACKAGE Required 11-digit NDC (5-4-2) Billing Format 12345 6789 1 12345678901 1111-2222-33 01111222233 01111 456 71 01111045671 16 October/November 2007

NDC configuration example Providers must bill the NDC on the label of the drug that is administered 17 October/November 2007

Billing principles 18 October/November 2007

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 19 October/November 2007

About the NDC quantity 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. 20 October/November 2007

NDC and HCPCS/CPT code quantity Example 21 October/November 2007

NDC and HCPCS/CPT code quantity Example 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) 22 October/November 2007

Claim filing 23 October/November 2007

PES version 2.08 24 October/November 2007

Billing instructions PES 837 Professional Service 2 tab 25 October/November 2007

Billing instructions PES 837 Professional RX tab 26 October/November 2007

Billing instructions PES 837 Institutional Outpatient Service tab 27 October/November 2007

Billing instructions PES 837 Institutional Outpatient RX tab 28 October/November 2007

Billing instructions DDE Professional 29 October/November 2007

Billing instructions DDE Institutional Outpatient 30 October/November 2007

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/provider/hipaa/compan.aspx 31 October/November 2007

Billing instructions CMS-1500 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 32 October/November 2007

Billing instructions CMS-1450 (UB-04) Outpatient 33 October/November 2007

Codes requiring manual review Sent on paper for review DMS-664 34 October/November 2007

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 35 October/November 2007

Remittance advice Reimbursement will not change Only the first sequence in a detail will be displayed reflecting the total paid amount or denial EOB 36 October/November 2007

Electronic rejections 37 October/November 2007

Electronic rejections 3770- Bill specific procedure code for administered drugs This 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 match Claim has rejected because the NDC submitted on the claim is not associated to the HCPCS/CPT code billed 38 October/November 2007

Electronic rejections 3790- NDC &/or labeler is not qualified for a rebate or is outside rebate dates 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 39 October/November 2007

Electronic rejections 9050- Discontinued drug Claim has rejected because the NDCs CMS termination date is on or before the date of service 9150- DESI drug not payable Arkansas Medicaid does not pay for drugs that are less than effective, also known as DESI drugs 40 October/November 2007

Explanation of Benefits (EOBs) 41 October/November 2007

Explanation of Benefits (EOBs) EOB - 905 Drug not covered, check NDC, may be obsolete EOB - 915 DESI drug not payable by Medicaid EOB - 924 Procedure code requires NDC(s) for administered drugs 42 October/November 2007

Explanation of Benefits (EOBs) EOB - 925 Procedure code and NDC do not match EOB - 926 NDC &/or labeler is not qualified for rebate or is outside rebate dates EOB - 927 Bill specific procedure code for administered drugs 43 October/November 2007

Drug Efficacy Study Implementation (DESI) 44 October/November 2007

Drug Efficacy Study Implementation (DESI) 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 45 October/November 2007

Drug Efficacy Study Implementation (DESI) 48 October/November 2007

Record retention 49 October/November 2007

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 50 October/November 2007

Billing tips 51 October/November 2007

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 52 October/November 2007