On Jan. 1, 1991, the Medicaid Drug Rebate Program, created by the Omnibus Budget Reconciliation Act of 1990, became effective. The law requires that drug manufacturers enter into an agreement with the Centers for Medicare & Medicaid Services (CMS) to provide rebates for their drug products that are paid for by Medicaid.
The Deficit Reduction Act of 2005 expanded the rebate requirement to include outpatient-administered drugs that state Medicaid programs cover. In addition, the Patient Protection and Affordable Care Act (ACA) expanded the rebate requirement to include drugs that all managed care organizations cover.
These federal regulations require states to collect National Drug Code (NDC) numbers on all physician, outpatient hospital and dialysis facility claims with outpatient drugs for billing manufacturers for drug rebates. Likewise, BlueCross BlueShield of South Carolina and BlueChoice HealthPlan of South Carolina require that you include an NDC, NDC unit of measure and NDC quantity for all professional and institutional outpatient-administered drug claims, effective August 26, 2016.
Read more about the National Drug Code Requirements for the Drug Rebate Program.