In health care, there is a code for pretty much everything! This week’s article will examine National Drug Codes – or NDCs. The Drug Listing Act of 1972 required that all drugs have an NDC code. The Federal Drug Administration (FDA) is responsible for publishing the list of NDCs. It is important to note, assignment of an NDC does not indicate the FDA has approved the use of the drug. [1]
Each NDC is assigned a 10-digit, 3-segment number; however, due to HIPAA standards, most claim systems require 11-digits in what is referred to as a 5-4-2 format or XXXXX-XXXX-XX. For example, if any portions of the three different segments don’t add up to 5, 4, or 2, then a 0 is added. See below:
For example:
NDC 00085-1756-01 is for the antibiotic drug CIPRO (ciprofloxacin hydrochloride). The first segment, 0085 (the first zero was added to standardize the format) represents the labeler Merck Sharp & Dohme Corp. (please note, labelers often have multiple labeler codes). The second segment, 1756, signifies the strength and dosage form which in this case is a tablet with a strength amount of 750 mg. The third segment, 01, is the package size, which for this NDC is a bottle of 50 tablets.
According to the FDA, “the first segment, the labeler code, is assigned by the FDA. A labeler is any firm that manufactures (including repackers or relabelers), or distributes (under its own name) the drug. The second segment, the product code, identifies a specific strength, dosage form, and formulation of a drug for a particular firm. Different formulations or different strengths of the same formulation should be assigned different product codes. The third segment, the package code, identifies package sizes and types. Different package codes only differentiate between different quantitative and qualitative attributes of the product packaging.”
What NDCs are used for Compound Drugs?
Company policies may vary; however, the pharmacy typically notes the prescription number in the NDC field and then lists separately all of the NDCs used to make the compound – including the ingredients, days supplied and quantity. The NDC with the most expensive ingredient is usually listed first. [2]
Foreign Drugs and Suppliers
Many medications are approved for use in foreign countries; however, they may not be sanctioned by the FDA in the United States. As a result, some physicians are purchasing these medications at a cheaper price and passing them off as US FDA approved drugs by using legitimate NDC codes. In addition, some physicians are purchasing medications from unlicensed foreign suppliers. Upon notification of this activity, the FDA notifies these prescribers in writing and posts these letters to their website. [3]
What Should Investigators Look For?
Here are just some examples of what investigators should be looking for when reviewing suspect pharmacy claims:
- Invalid or expired NDCs;
- Strength and dosage amounts that don’t match the NDC;
- Review and data mine on prescribers engaging in foreign purchases (PostShield™ will automatically flag these providers for you. If you currently do not have this capability you can review the providers on the FDA website);
- When auditing pharmacies, review the invoices to identify the origin of the drugs.
REFERENCES:
[2] https://www.caremark.com/portal/asset/claim_ers.pdf
[3] http://www.fda.gov/Drugs/DrugSafety/DrugIntegrityandSupplyChainSecurity/ucm299920.htm
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