Attention! For All J Code Claims Filed To Medicaid, The Claim Must ...
CHESTER J. CULVER, GOVERNOR
DEPARTMENT OF HUMAN SERVICES
PATTY JUDGE, LT. GOVERNOR
KEVIN W. CONCANNON, DIRECTOR
INFORMATIONAL LETTER No. 693
DATE:
March 19, 2008
TO:
Iowa Medicaid Physician, Podiatrist, Rural Health Clinic, Clinic, Community
Mental Health, Family Planning, Ambulatory Surgical Center, Certified Nurse
Midwife, Certified Registered Nurse Anesthetist, Federal Qualified Health
Center and Nurse Practitioner Providers
ISSUED BY:
Iowa Department of Human Services, Iowa Medicaid Enterprise
RE:
NDC is required for J-code drugs (Medicare cross-over claim requirement)
EFFECTIVE:
May 1, 2008
Attention! For all J-code claims filed to Medicaid, the claim must include the NDC
code, and must be on the ‘CMS rebateable list’, as described in Information Letter
No, 647. This memo clarifies that this requirement ALSO applies to claims filed to
Medicare that cross-over to Medicaid – ‘CROSSOVER CLAIMS’. The NDC must be
included with the J-Code on the claim filed with MEDICARE, in order for MEDICAID
the crossover claim to be payable by MEDICAID.
For more information on the J-code NDC requirement for Medicaid claims see Informational Letter No.
647 on October 26, 2007.
To comply with Centers for Medicare and Medicaid Services (CMS) requirements pursuant to the
Federal Deficit Reduction Act (DRA) of 2005, the Iowa Medicaid Enterprise (IME) was obligated to
require providers to report the National Drug Code (NDC) on all “J” code drugs administered in an
office/clinic or other outpatient setting. This requirement was described in two Informational Letters
from IME (#593 dated March 28, 2007 and #647 dated October 26, 2007). The purpose of the
requirement is to allow Medicaid to collect rebates from drug manufacturers for products paid
through the Medicaid program. Ultimately, the inclusion of NDC on claims submitted directly to
Medicaid was required for dates of service on or after December 17, 2007.
A recent clarification from CMS specified that this requirement also applies to Medicare
cross-over claims. “Cross-over claims” are claims sent to the IME after they are paid (primary) by
a Medicare carrier but some Medicaid payment eligibility still remains. Typically, this means
Medicaid covers a Medicare coinsurance and/or deductible for a member who is “dual-eligible” for
both Medicare and Medicaid.
IME has requested a waiver from CMS to delay this requirement in order to allow providers and IME
time to make the changes necessary to comply with this obligation. In accordance with that waiver
request, IME will require NDC on all professional CMS-1500 claims that will be submitted to
Medicaid via a “cross-over” claim that have been paid primary by Medicare Part B for dates
of service on and after May 1, 2008. However, this requirement also applies to claims submitted
to a Medicare HMO (Medicare Part C) on the CMS1500/professional format.
IOWA MEDICAID ENTERPRISE – 100 ARMY POST ROAD - DES MOINES, IA 50315
The NDC number is 11 digits and serves as a universal drug product identifier located on a drug’s
packaging. The NDC requirement states that all claims for physician-administered drugs
administered in an office/clinic or other outpatient setting that are reported with a HCPCS “J” code
must also include the corresponding NDC number. In addition, only those NDCs that are
“rebatable”, as reflected by inclusion on the IME’s “Preferred Drug List” (PDL) will be payable by
IME.
Rebatable Drugs: the IME will only pay claims for those J code drugs with corresponding NDC
numbers that are rebatable per the Omnibus Budget Reconciliation Act of 1990 (OBRA'90). The
Medicaid Drug Rebate Program requires a drug manufacturer to enter into and have in effect a
national rebate agreement with the Secretary of the Department of Health and Human Services
(HHS) for states to receive Federal funding for outpatient drugs dispensed to Medicaid patients.
The IME maintains a list of rebatable NDC numbers on our website,
http://www.ime.state.ia.us/Providers/DrugList.html look for the box marked “Quick Links”, and
then choose “Rebatable Drugs.”
Reporting the NDC Number on a cross-over claim:
Claims forwarded to IME electronically by Medicare: Most professional cross-over claims come
to IME “automatically” through the electronic Coordination of Benefits (COB) process. These claims
contain a reference on the Medicare Explanation of Benefits (EOB) that they have been forwarded
to Medicaid (“Title 19”). Please be aware that the payment from Medicaid for any remaining
coinsurance and/or deductible on claims forwarded from Medicare through the COB may take a few
weeks to process. To report the NDC on these claims, simply include it on the original claim to
Medicare on the 837P Electronic Transaction. On this transaction (which is required by Medicare),
the NDC number is reported in loop 2410, which directly follows the HCPCS code. This is exactly
the same as claims submitted directly to Medicaid on the electronic format. As such, providers
should already have processes in place to include the NDC on electronic claims submitted directly
to Iowa Medicaid.
Cross-over claims submitted to IME on paper: For claims that do not cross through the COB
process (currently this includes all Medicare HMO claims), providers must now include a copy of the
CMS-1500 (08/05) claim form to report the NDC along with the usual Medicare EOB. The CMS
1500 form is not necessary for claims where there is no NDC to report, but it is allowed. All of the
usual Medicaid CMS 1500 claim instructions apply (the NDC is in box 24A: enter qualifier “N4”
followed by the NDC number in the gray area above the date of service). Complete instructions are
available on line at: http://www.ime.state.ia.us/Providers/index.html.
If you have any questions please contact IME Provider Services at 1-800-338-7909, locally in Des
Moines at 515-725-1004 or by email at imeproviderservices@dhs.state.ia.us.
