NDC Listing Errors Explained

What are NDC Listing Errors?

NDC listing errors occur when the National Drug Codes (NDCs) are either missing from or incorrectly listed in one or more healthcare pricing and coding databases. These databases include publicly available sources: FDA Orange Book, CMS Medicare, CMS Medicaid, and private pricing compendium: Redbook, Medispan, First Databank (FDB), and Gold Standard. The accuracy of NDC listings is crucial for the management of drugs within healthcare data systems. Errors in these listings can have significant implications for healthcare providers, pharmacists, and patients.

Here is a brief description of the previously mentioned data sources:

1. Publicly Available Data Sources

  • FDA Orange Book: This database lists approved drug products along with their therapeutic equivalency. The FDA Orange book also details patent information and drug exclusivity.
  • CMS Medicare and Medicaid: The Center for Medicaid and Medicare Services (CMS) provides a wide range of NDC/HCPCS level data ranging from NDC to HCPCS alignment to Average Sale Price (ASP) data.

2. Private Pricing Compendium

  • Redbook, Medispan, First Databank (FDB), and Gold Standard: The four major pricing compendia provide detailed NDC pricing and product information. This includes package and unit level WAC and AWP, package descriptions, NDC to HCPCS alignments, NDC approval status, NDC activity status, and much more.

An NDC listing error occurs when one or more of the mentioned data sources does not align with the others. This could include an discrepancy in an NDC’s activity status, pricing information, HCPCS alignment, approval pathway, etc. One of the pricing compendia might list an NDC as inactive, while the other three list the NDC as active. In another case, two pricing compendia might align an NDC to a certain HCPCS code, while CMS and the other two pricing compendia may align the NDC to a different HCPCS code. These types of errors can pose major problems for healthcare providers and payers, as they are often unaware that an error exists.

 

Types of Listing Errors

There are a wide range of listing errors and discrepancies that can occur across the various data sources and drug pricing compendia. The main types of NDC listing errors include NDC activity status errors, NDC pricing errors, NDC to HCPCS alignment errors, NDC approval status errors, and package description errors. Each type of listing error comes with its own potential ramifications.

1. NDC Activity Status Errors

  • NDC activity status errors are NDCs that are either missing or listed incorrectly on one or more of the following databases: FDA Orange Book, CMS Medicare, CMS Medicaid, Redbook, Medispan, FDB, or Gold Standard.
  • Missing or incorrect NDCs may lead to prescriptions or claims for your product being denied or not appearing on a providers practice management software so they are unable to order the product.
  • Example: An NDC is listed as active in Redbook, Medispan, and the CMS NDC-HCPCS crosswalk but is missing from FDB. Payers and providers that use FDB data aren’t aware that the NDC is active or even exists at all.

2. NDC Pricing Errors

  • NDC pricing errors are NDCs that have pricing errors or inconsistencies with one or more of the following databases, Redbook, FDB, Medispan, Gold Standard, Medicare ASP
  • Incorrect or missing pricing data for an NDC can cause claims to be rejected or paid incorrectly
  • Example: The WAC per package price for a certain NDC is listed as $2800 in Medispan and is listed as $3200 in Redbook and FDB. The relevant payer only purchases Medispan data and underpays claims by a $400 margin.

3. NDC-HCPCS Alignment Errors

  • NDC to HCPCS alignment errors are NDCs that appear to be misaligned to an incorrect HCPCS code by CMS, Redbook, FDB, Medispan or Gold Standard
  • NDCs that are not aligned to the correct HPCCS will cause claims for that product to reject.
  • Example: Redbook incorrectly aligns a certain NDC to J9924 while the other compendia accurately align the NDC to J9925. A healthcare provider using Redbook data maps the NDC to the incorrect HCPCS code on the CMS 1500 form and the claim gets rejected.

4. NDC Approval Status Errors

  • NDC approval status errors involve NDCs that appear to have discrepancies between the FDA approval type listing and the compendia approval type listing
  • This may cause the product to be incorrectly treated as a generic or brand when the opposite is true. This may impact formulary, coverage and reimbursement rates.
  • Example: Orange book has an NDC listed as AP rated with a reference listed drug, however, the drug was approved under an NDA and is not generic according to the manufacturer. This branded NDC is improperly treated as a generic which impacts its coverage and position on a variety of formularies.

5. Package Description Errors

  • Package description errors occur when there are inconsistencies in the NDC package strength, the package size, or the number of units in the package between the compendia and other data sources.
  • Inconsistent package description information can lead to a variety of errors including incorrect unit pricing calculations, billing unit errors, purchasing errors, etc.
  • Example: Redbook lists ten units in a package for a certain NDC while all the other pricing compendia list just one unit. Redbook’s unit level pricing is incorrect by a factor of ten and providers using Redbook incorrectly record more billing units than necessary.

Keep in mind that there are NDC listing errors outside of the five mentioned error types. The five listed categories are the listing errors that the BuyandBill team found to be the most prevalent.

 

How does BuyandBill.com Identify Listing Errors?

Both BuyandBill.com and Pricing.BuyandBill.com track and monitor NDC Listing errors. However, the BuyandBill websites do not monitor all error types. The NDC errors listed on BuyandBill.com only relate to NDC activity status errors and NDC pricing errors. The NDC listing errors on BuyandBill are updated monthly and are found by comparing all four pricing compendia: Redbook, Medispan, FDB, and Gold Standard.

Let’s take a look at an NDC listing error for the HCPCS Code: Q5108