Are you weighing the decision to enforce an NDC mandate on ALL Medical Pharmacy Claims? RJ Health’s Analytics team shares the pro’s & con’s of NDC mandates across Pricing, Formulary, and Network Quality Considerations. Here are some practical examples to help illustrate how, at the end-of-the-day, RJ Health believes the answer to the NDC vs. HCPCS reimbursement option is of course, BOTH – you need policies that reimburse at both HCPCS and NDC levels.
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|Comparison of HCPCS vc NDC Usage in Pricing Claims|
|There are benefits and challenges with utilizing one methodology over the other. Either approach could result in over or under reimbursement under specific conditions. Examples include:
1. Remicade’s current ASP rate is significantly below the AWP per NDC ($808 vs. $1,401 per vial), resulting in potential under-reimbursement to the provider, but overall lower spend to the plan.
2. Epoprostenol (J1325) currently has HCPCS price of $19.44 (Range of $15.69 to $27.07) due to the availability of both brand and generic products in the code. Flolan is currently priced at $22.43 and Veletri at $27.07. This situation promotes usage of the generic due to lower reimbursement.
|Based on the mix of products that are mapped to a specific HCPCS code||Based on drug data sources (i.e. First Data Bank, MediSpan, etc.) and may be automatically updated if pricing is based on NDC level data.|
|Pricing based on the mix usually leads to improved pricing when products with various pricing ranges are represented.||Allows for pricing reimbursement that is specific to submitted NDC|
|Pricing has to be updated within the medical claim system||If NDC level data has to be converted to HCPCS, will require updates within the medical clam system.|
|Pricing updates are conducted in consistent cycles (i.e. monthly or quarterly)||Price applied requires validation of HCPCS Units to NDC Units billed or conversion of NDC Unit price to HCPCS Unit Price.|
|Price applied based on unites of HCPCS Code submitted.||NDC pricing is updated based on manufacturer reporting and not consistent.|
|If multiple branded and generic products exist in a specific HCPCS code, cannot establish a preferencing for generic first or specific brand.||Allows for establishment of a formulary on covered products with differential reimbursement.|
|Alternatively, the pricing utilized should be set at the lowest cost product.||Allows for ensuring coverage of preferred products where a medical rebate exists.|
|Difficult to facilitate rebate billing with codes that include multiple products when NDC units are required in reporting.||Facilitates the billing for rebates.|
|Reimbursement rates established based at HCPCS level.||Pricing based on drug pricing standards on weekly basis.|
|Pricing Updates may be delayed at code level due to system updates required or notification requirements.||Contracts need to reflect the usage of pricing standards and potential update frequency.|