How to Submit Claims with Drug-Related (J or Q) Codes

Professional and institutional primary and secondary claims submitted with drug-related (J or Q) codes must include the National Drug Code (NDC) number, quantity and unit of measure, in addition to the corresponding Healthcare Common Procedure Coding System (HCPCS) and Current Procedural Terminology (CPT) codes and the units administered for each code.

Providers must comply with New Jersey Medicaid NDC requirements:

  1. When billing for "J" and "Q" codes, the appropriate NDC number, quantity, unit of measure and revenue code must be submitted. If this information is not in the claim, NJ Medicaid requires us to deny it.
  2. NDC quantity must be valid. The calculated allowed amount (quantity X price) should not be more than two times the billed amount using billable (outer NDCs) wholesale acquisition cost. If the calculated amount exceeds this, NJ Medicaid requires us to deny the claim with the message "NDC quantity exceeded."
  3. Billable (outer NDCs) wholesale acquisition cost is required to calculate a valid NDC code in the drug master for the date of service. The inner NDC is acceptable if it has the wholesale acquisition cost. It is recommended to use the outer NDC, which will always have the wholesale acquisition cost.

See the explanation of reason codes and descriptions for the NDC denial codes.

Here are common questions about J and Q codes.

What if a member is dual eligible for Medicare and Medicaid?

We must comply with state Medicaid rules and require the NDC number, quantity and unit of measure for claim lines that have J and Q procedure codes billed.

What information is required when submitting an NDC?

Submit the unit of measure found on the NJMMIS website.

The following information is required:

  • Valid 11-digit NDC number. The number must be entered in the 24D field of the CMS-1500 Form or in LIN03 of the HIPAA 837 Professional Electronic form.
  • NDC unit of measure (F2, GR, ML, UN)
  • NDC units dispensed (must be greater than 0)

Will the NDC information submitted be subject to additional clinical edits?

Yes. The following criteria will also be applied:

  • NDC and HCPCS verification: identifies incorrect billing when the NDC and HCPCS codes are not a match on the drug claim
  • NDC max unit: targets drugs that have specific strengths where an unexpected number of units are exceeded
  • Inactive NDCs: targets inactive/obsolete drugs

Where is the NDC located?

The NDC is an 11-digit number found on the prescription label of the drug container. If the NDC on the label does not have 11 digits, add a leading zero to the appropriate section to create a 5-4-2 configuration (e.g., 66733-0948-23). Do not add spaces or hyphens on the claim. The NDC must be the actual number on the container from which the medicine was administered.

Are NDC units different from HCPCS/CPT code units?

Yes. NDC units are based on the quantity administered to the patient and the unit of measure.

UOM Description Guidelines
F2 International unit International units will mainly be used when billing for Factor VIII-Antihemophilic Factors.
GR Gram Grams are usually used when an ointment, cream, inhaler or bulk powder in a jar are dispensed. This unit of measure will primarily be used in the retail pharmacy setting and not for physician-administered drug billing.
ML Milliliter If a drug is supplied in a vial in liquid form, bill in millimeters.
UN Unit If a drug is supplied in a vial in powder form and must be reconstituted before administration, bill each vial (unit/each) used.

How do I report NDC units?

Submit the decimal quantity administered and the units of measurement on the claim. If reporting a partial unit, use a decimal point.

  • GR0.025
  • ML2.5
  • UN3.0

The quantity should be eight digits before the decimal and three digits after the decimal. If entering a whole number, do not use a decimal. Do not use commas. Leave remaining positions blank. The following are examples:

  • 1234.56
  • 2
  • 12345678.123

How should the NDC unit of measure and quantity be submitted?

Follow the claim requirements below:

CMS-1500 form:

  • Enter the NDC in the shaded area of the service lines in Field 24.
  • The six service lines in section 24 are divided horizontally to accommodate supplemental information to support the billed service. The top portion in each of the six service lines is shaded and can be used to report supplemental information.
  • Submit the NDC code in the red-shaded portion of the detail line item starting in positions 01.
  • The NDC should be preceded with the qualifier N4 and followed immediately by the 11-digit NDC code (e.g., N412345678901).

UB-04 form:

  • Field 42: Revenue code
  • Field 43: NDC 11-digit number, Unit of Measurement Qualifier and Unit Quantity
  • Field 44: HCPCS code
Loop Segment Element Name Information
2410 LIN 02
Product or Service ID Qualifier If billing for a NDC, enter N4.
2410 LIN 03
Product or Service ID If billing for drugs, include the NDC. Sample - LIN**N4*12345678901
2410 CTP 04
Quantity If an NDC was submitted in LIN03, include the quantity for the NDC billed.
2410 CTP 05-1
Unit or Basis for Measurement Code If an NDC was submitted in LIN03, include the unit or basis for measurement code for the NDC billed.
F2 - International unit; GR – Gram; ML – Milliliter; UN - Unit Sample - CTP****3*UN
2410 REF 01
VY: Link Sequence Number, XZ : Prescription Number Link Sequence number (to report components for compound drug)
2410 REF 02
Link Sequence Number or Prescription Number Sample - REF01*VY*123456

For more information on NDC codes and units of measure, visit New Jersey Medicaid.