Archive for April, 2011|Monthly archive page

Deconstructing the NDC Number

In Uncategorized on April 8, 2011 at 9:09 pm

When you are asked by your billing department / billing company for an NDC number, do you just “google” it, and think – man, they could have done that!?!  Rest assured, they could not…  It is more complicated than a quick Google search!  This is important from a compliance perspective.  In fact, to ensure that the proper NDC number is provided, one must actually see the packaging materials of the drugs provided to the patient, for drugs may be manufactured and/or packaged by several different companies, and there are different NDC numbers, accordingly.   More specifically:

What IS the NDC?

The Drug Listing Act of 1972 required registered drug establishments to provide the Food and Drug Administration (FDA) with a current list of all drugs manufactured, prepared, propagated, compounded, or processed by it for commercial distribution. (See Section 510 of the Federal Food, Drug, and Cosmetic Act (Act) (21 U.S.C. § 360)).  Such drug products are identified and reported using a unique, ten-digit, three-segment number, called the National Drug Code (NDC), which is a universal product identifier for human drugs.  More specifically, the NDC number identifies:

  • the labeler (in the 1st segment),
  • product (in the 2nd segment), and
  • trade package size (in the 3rd segment)

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 for that particular firm.  The third segment, the package code, identifies package sizes and types.  Both the product and package codes are assigned by the firm.  The NDC will be in one of the following configurations: 4-4-2, 5-3-2, or 5-4-1.

An asterisk may appear in either a product code or a package code.  It simply acts as a place holder and indicates the configuration of the NDC.  Since the NDC is limited to 10 digits, a firm with a 5 digit labeler code must choose between a 3 digit product code and 2 digit package code, or a 4 digit product code and 1 digit package code.  Thus, you have either a 5-4-1 or a 5-3-2 configuration for the three segments of the NDC.  Note that because of a conflict with the HIPAA standard of an 11 digit NDC, many programs will pad the product code or package code segments of the NDC with a leading zero instead of the asterisk.  However, since a zero can be a valid digit in the NDC, this can lead to confusion when trying to reconstitute the NDC back to its FDA standard. Example: 12345-0678-09 (11 digits) could be 12345-678-09 or 12345-0678-9 depending on the firm’s configuration — use of the asterisk for the place holder would eliminate this confusion. 

If you no longer have the packaging materials which list the NDC number, then please access, which is a searchable NDC database allowing the user to search by proprietary name, active ingredient, application number, NDC number or firm (manufacturer) name. 


Can Your Practice Charge For Copies Of Patient Records?

In Uncategorized on April 4, 2011 at 10:52 pm

This answer to this question is state-specific in nature, as it is dictated by state statute.  In Virginia (M.E.D.I.C., Inc.’s state of incorporation) , the Virginia Health Records Privacy statute [§ 32.1-127.1:03 (J)] states that “[i]f an individual requests a copy of his health record from a health care entity, the health care entity may impose a reasonable cost-based fee, which shall include only the cost of supplies for and labor of copying the requested information [and] postage when the individual requests that such information be mailed.”

This begs the question of what constitutes a “reasonable cost-based fee.”  In factoring such a reasonable cost-based fee, a practice may assess a fee to cover the supplies utilized to copy the records based on the total number of pages copied, factoring in the average per-page cost of paper, toner and expenses associated with leasing or owning a copy machine.  Additionally, the practice may assess a fee to compensate for labor expenses paid to staff engaged in the copying of files.  This portion of the fee is based on the time it takes to copy the records…  it specifically should not include the time spent searching for and retrieving records.

Finally, it bears noting that Virginia Code of § 8.01-413 (B) permits health care entities to charge fees to attorneys, insurers and others authorized by the patient for copies of medical records.  These fees can exceed those charged to the actual patient, however must not to exceed $0.50 per page for the first 50 pages and $0.25 for each additional page, $1.00 per page for copies from microfilm or other micrographic process, plus a fee for search and handling (not to exceed $10) plus all postage and shipping costs. 

All such copies of hospital, nursing facility, physician’s, or other health care provider’s records or papers must be furnished within fifteen days of the  request.

Remember, this is state-specific!  If not located in Virigia, be sure to check your state’s laws!

Think That You Are Ineligible For Stimulus Funds??? Check Here!

In Uncategorized on April 1, 2011 at 7:09 pm

As the timing ticks away for practices to select, implement and meaningfully use a certified EHR so as to take advantage of the maximum ARRA EHR stimulus rebate, perhaps the most pressing question being asked by providers is whether they are even eligible for ARRA EHR stimulus funds???

Every provider that accepts Medicare qualifies for some portion of stimulus funds.  The percentage of a provider’s Medicare patient base is not a factor in determining eligibility for the Medicare stimulus finds.  Rather, it is the Medicare allowable charges that is key.  As long as a providerr has one allowable charge, then he/she is eligible for the stimulus funds.  Then the question becomes how much of the annual stimulus rebate is he/she entitled to receive.  There is a simple formula for determining this:

Total annual Medicare Allowable Charges by provider divided by $24,000

That formula will result in the percentage of Medicare stimulus funds a provider is entitled to receive, up to 100%, which represents the the maximum percentage of the annual stimulus funds that can be earned during a particular year.

For example: 

  • if a provider’s allowable charges total $12,000 in his/her first year meaningfully using a certified EHR, then the physician qualifies for 50% of the annual stimulus funding ($12,000/$24,000).  In 2011 the funding is $18,000, so that provider would receive $9,000 of ARRA stimulus funds   
  • if a provider’s allowable charges total $24,000 in his/her first year meaningfully using a certified EHR, then the physician qualifies for 100% of the annual stimulus funding ($24,000/$24,000).  In 2011 the funding is $18,000, so that provider would receive $18,000 of ARRA stimulus funds

Essentially, any provider whose Medicare allowable charges meet or exceed $24,000 will receive 100% of that year’s ARRA rebate incentive (up to a maximum total of $44,00 throughout the life of the program).  This figure can also be arrived at by multiplying total Medicare allowable charges by 75%…  ARRA rebate amount is the product of that equation or 18,000 – whichever is less. 

NOTE TO MEDICAID PROVIDERS:  If you have a measurable Medicaid population — at least 30% of your patient population (or 20% if a pediatrician) — then the Medicaid EHR Incentive Program, which is offered and administered voluntarily by states and territories, may be of interest as an alternative to the Medicare program (must choose between the two programs).  To qualify for Medicaid incentive payments, Medicaid eligible professionals must adopt, implement, upgrade, or demonstrate meaningful use of certified EHR technology in the first year of participation, and successfully demonstrate meaningful use in subsequent participation years, just like in the Medicare program.  However, under the Medicaid program, participants can receive up to $63,750 over 6 years (as opposed to $44,000 over 5 years):

Check with your state’s Medicaid program to see if the rebate program has been implemented yet, as it is a state-by-state roll-out.

Government Incentivizes EMR Adoption

In Uncategorized on April 1, 2011 at 6:05 pm

Reposted from, October 2009

On February 17, 2009, the American Recovery and Reinvestment Act (ARRA) was signed into law, committing $19.2 billion to healthcare information technology (HIT) to promote the use of HIT for all providers of healthcare. A whopping $17.2 billion has been allocated as incentive payments to eligible healthcare professionals for EMR adoption. More specifically, providers using a certified EMR will be eligible for substantial government cash incentives in the years 2011 through 2014. While the law does not yet specify what constitutes a “certified” EMR, industry leaders agree that CCHIT will likely be selected as the standard. Providers who have not adopted a certified EMR by 2015 may be penalized.

As the chart below reflects, those providers adopting a certified EMR system in 2011 & 2012 will receive the greatest benefit, for they will be eligible for incentive payment for 5 years and at a higher rate.

Feel free to contact M.E.D.I.C., Inc. if you would like to discuss EMR options and issues as you prepare to foray into this new technology!