[California] National Drug Codes (NDCs) are required for outpatient claims

By April 20, 2026: Billing team must implement the following NDC submission requirements for all California Medicaid outpatient claims: (1) Validate that all drug-related HCPCS codes include 11-digit NDCs in 5-4-2 format with leading zeros where applicable; (2) Update billing software to automatically reject claims with missing, 10-digit, or incorrectly formatted NDCs; (3) Configure system to require matching NDC from the individual vial/container administered (not bulk packaging); (4) Establish UOM validation rules based on drug formulation type (UN for powder vials requiring reconstitution, ML for liquid formulations, GR for ointments/creams, F2 for international units); (5) Ensure decimal quantities are supported (maximum 8 digits before decimal, 3 after) and zero-fill, commas, and spaces are removed; (6) For CMS-1500 paper claims: enter NDC in Line 24A shaded area in format N4[11-digit NDC][UOM][quantity]; for UB-04: enter in Form Locator 43 without spaces; for electronic claims (837P/837I): populate LIN segment (LIN02: N4 qualifier, LIN03: 11-digit NDC) and CTP segment (CTP04: quantity, CTP05-1: UOM); (7) Train billing and clinical staff on NDC location on drug containers and proper UOM selection; (8) Audit claims for common errors including NDC/HCPCS unit mismatches, omitted quantities, and incorrect UOM codes. Claims submitted without compliant NDC information will experience processing delays and potential denials. Radiopharmaceuticals, hemophilia drugs, gene therapy, G Codes, and P Codes are exempt. For compound drugs, submit each NDC on separate line with KP/KQ modifiers.