Reference

Medical Billing & Drug Coding Glossary

Every acronym that appears on a drug claim or an FDA listing, defined in one sentence and then explained properly.

153 terms7 subject areas

By subject

NDC & product identity

25 terms

10-digit NDC 11-digit NDC 4-4-2 format 5-3-2 format 5-4-1 format

HCPCS & CPT coding

27 terms

340B modifier A-code Billable unit C-code CPT 20610

Claims & billing

30 terms

837I 837P Brown bagging Buy and bill CARC

Pricing & reimbursement

19 terms

340B program Allowed amount AMP ASP ASP plus 6 percent

FDA regulatory

25 terms

505(b)(2)AB rating ANDA Active ingredient Active moiety

Data & standards

15 terms

DSCSA FHIR GS1 GTIN HIPAA transaction standards HL7

Clinical trials

12 terms

Exclusion criteria Expanded access Inclusion criteria IND NCT number

Numbers

10-digit NDCThe form the FDA publishes, which may be 4-4-2, 5-3-2 or 5-4-1 depending on how the labeler's segments were assigned.Definition 11-digit NDCThe 5-4-2 billing form of an NDC, produced by padding a leading zero into whichever 10-digit segment is short.Definition 340B modifierThe JG or TB modifier identifying a drug purchased under the 340B discount program.Definition 340B programA federal program requiring manufacturers to sell outpatient drugs at discounted prices to qualifying safety-net providers.Definition 4-4-2 formatA 10-digit NDC with a four-digit labeler code; the leading zero goes into the first segment.Definition 5-3-2 formatA 10-digit NDC with a three-digit product code; the leading zero goes into the middle segment.Definition 5-4-1 formatA 10-digit NDC with a one-digit package code; the leading zero goes into the last segment.Definition 5-4-2 formatThe 11-digit billing shape: five labeler digits, four product digits, two package digits.Definition 505(b)(2)A hybrid application pathway that relies partly on data the applicant did not generate.Definition 837IThe X12 electronic transaction for institutional claims.Definition 837PThe X12 electronic transaction for professional claims.Definition

A

A-codeA HCPCS Level II code for medical supplies, ambulance transport and administrative items.Definition AB ratingThe most common therapeutic equivalence rating, meaning a generic is substitutable for the brand.Definition Abbreviated New Drug Application (ANDA)The application for a generic drug, which relies on the brand's safety and efficacy data and proves bioequivalence instead.Definition Active ingredientThe substance in a drug product that produces the intended effect, listed with its strength per dosage unit.Definition Active moietyThe part of a molecule responsible for its pharmacological action, excluding salts and esters.Definition Allowed amountThe maximum a payer will recognise for a line, regardless of what was billed.Definition AMP (Average Manufacturer Price)The average price wholesalers pay manufacturers for drugs distributed to retail pharmacies, used to calculate Medicaid rebates.Definition ASP (Average Sales Price)The volume-weighted average price manufacturers actually realise for a drug, net of most discounts and rebates, reported quarterly to CMS.Definition ASP plus 6 percentThe standard Medicare Part B payment formula for a clinician-administered drug.Definition AWP (Average Wholesale Price)A published benchmark price historically used for reimbursement, widely criticised as unrelated to actual transactions.Definition

B

Best priceThe lowest price a manufacturer makes available to almost any purchaser, used in the Medicaid rebate calculation.Definition Billable unitThe quantity denominator built into a HCPCS drug code, which converts an administered dose into the number reported on the claim.Definition Biologics License Application (BLA)The application for a biological product — a monoclonal antibody, vaccine, cell or gene therapy.Definition BiosimilarA biological product highly similar to an already-licensed reference product, with no clinically meaningful differences.Definition Boxed warningThe most serious warning the FDA requires on a drug label, set inside a black border.Definition Brown baggingThe patient collects the drug from a pharmacy and brings it to the appointment.Definition Bundled paymentA single payment covering a group of related services, so individual items are not separately reimbursed.Definition Buy and billThe model in which a provider purchases a drug, holds it in inventory, administers it and bills the payer afterwards.Definition

C

C-codeA temporary HCPCS Level II code used by hospital outpatient departments under the OPPS.Definition CARCClaim Adjustment Reason Code — the standardised reason a payment differs from the billed amount.Definition Chemical structure (CS)A pharmacologic class describing the drug's chemical family.Definition Clean claimA claim with no defect or omission that prevents timely adjudication.Definition ClearinghouseAn intermediary that validates, formats and routes claims between providers and payers.Definition CMS-1500The paper claim form used by physicians and other non-institutional providers; the 837P is its electronic equivalent.Definition Contractual adjustmentThe write-off between the billed charge and the contracted allowed amount.Definition Coordination of benefitsThe rules deciding which payer is primary when a patient has more than one coverage.Definition CPT 20610Arthrocentesis, aspiration or injection of a major joint or bursa.Definition CPT 67028Intravitreal injection of a pharmacologic agent.Definition CPT 90471Immunization administration for a single vaccine, by percutaneous, intradermal, subcutaneous or intramuscular injection.Definition CPT 96365Intravenous infusion for therapy, prophylaxis or diagnosis; initial hour.Definition CPT 96372Therapeutic, prophylactic or diagnostic injection given subcutaneously or intramuscularly.Definition CPT 96401Chemotherapy administration, subcutaneous or intramuscular; non-hormonal anti-neoplastic.Definition CPT 96413Chemotherapy administration, intravenous infusion; up to one hour, single or initial substance.Definition CPT codeA five-digit Current Procedural Terminology code identifying a procedure or service performed by a clinician.Definition

D

Denial codeA code on a remittance advice explaining why a claim or line was not paid as billed.Definition Dosage formThe physical form in which a drug is supplied — tablet, capsule, injection, solution, kit and so on.Definition DSCSAThe Drug Supply Chain Security Act, which requires unit-level traceability of prescription drugs.Definition

E

Established Pharmacologic Class (EPC)The FDA-assigned class that appears in a drug's label as its scientifically valid pharmacologic classification.Definition Exclusion criteriaThe characteristics that disqualify a person from a study.Definition Expanded accessA pathway allowing a patient to receive an investigational drug outside a clinical trial, sometimes called compassionate use.Definition

F

F2 qualifierUnit qualifier meaning international unit.Definition Fee scheduleThe payer's table of maximum allowable amounts per code.Definition FHIRFast Healthcare Interoperability Resources — HL7's REST and JSON standard for clinical data exchange.Definition

G

GR qualifierUnit qualifier meaning gram — used for creams, ointments, gels and bulk powders.Definition GS1 GTINThe global trade item number encoded in a drug package barcode, which embeds the NDC.Definition

H

HCPCSThe Healthcare Common Procedure Coding System: the CMS code set used to bill procedures, drugs, supplies and equipment under Medicare and most other payers.Definition HCPCS dosage descriptorThe text of a HCPCS drug code, which defines both the substance and the unit of measure.Definition HCPCS Level IThe CPT code set, maintained by the American Medical Association, covering physician and facility procedures.Definition HCPCS Level IIThe CMS-maintained alphanumeric code set for drugs, supplies, equipment and services that CPT does not describe.Definition HIPAA transaction standardsThe federally mandated formats for electronic healthcare transactions, including claims, remittance and eligibility.Definition HL7The standards organisation and message family used to exchange clinical data between systems.Definition

I

ICD-10-CMThe diagnosis code set used on US claims to state why a service was provided.Definition ICD-10-PCSThe procedure code set used for inpatient hospital reporting.Definition Incident toBilling a service performed by clinical staff under a physician's supervision as though the physician performed it.Definition Inclusion criteriaThe characteristics a person must have to be eligible for a study.Definition Interchangeable biosimilarA biosimilar that meets an additional standard permitting pharmacy-level substitution without prescriber involvement.Definition Investigational New Drug (IND)The FDA submission that permits an unapproved drug to be shipped across state lines for clinical study.Definition Invoice pricingManual pricing of a drug from the provider's acquisition invoice, used where the code carries no established rate.Definition

J

J-codeA HCPCS Level II code beginning with J that identifies a drug administered by a clinician rather than self-administered.Definition J3490The HCPCS miscellaneous code for unclassified drugs, used when no permanent J-code exists.Definition J3590The HCPCS miscellaneous code for unclassified biologics.Definition JW modifierReports the amount of a single-dose container that was discarded rather than administered.Definition JZ modifierAttests that no amount of a single-dose container was discarded.Definition

K

Kit (NDC)A single NDC covering a carton that contains more than one component, each of which may carry its own inner NDC.Definition KX modifierAttests that the documented medical-necessity requirements in a payer policy have been met.Definition

L

Labeler codeThe first NDC segment, four or five digits, assigned by the FDA to the company that puts its name on the package.Definition Leading zero paddingThe rule that converts a 10-digit NDC to 11 digits by inserting a zero at the start of whichever segment is one digit short.Definition Least costly alternativeA now largely retired policy of paying for a drug at the rate of a cheaper clinically comparable product.Definition Line itemOne service line on a claim, carrying a single procedure or drug code with its own units, charge and modifiers.Definition Listing expiration dateThe date after which a drug listing lapses unless the labeler renews it in the FDA's annual listing cycle.Definition LOINCA terminology for laboratory tests and clinical observations.Definition

M

Marketing categoryThe FDA field stating the legal basis on which a product is marketed — NDA, ANDA, BLA, OTC monograph and others.Definition Marketing end dateThe date a labeler expects to stop distributing a product; after it, the NDC is treated as discontinued.Definition Marketing start dateThe date the labeler first placed a product into commercial distribution.Definition Mechanism of action (MoA)A pharmacologic class describing the molecular target through which a drug acts.Definition Medicaid Drug Rebate ProgramThe agreement under which manufacturers rebate a share of Medicaid drug spending in exchange for coverage.Definition Medicare Part B drugA drug covered under the medical benefit because it is administered by a clinician rather than self-administered.Definition Medicare Part D drugA drug covered under the outpatient prescription benefit and dispensed by a pharmacy.Definition Miscellaneous codeAlso called a NOC (not otherwise classified) code: a placeholder used when no specific code describes the item.Definition ML qualifierUnit qualifier meaning millilitre — used for injectables and liquids measured by volume.Definition ModifierA two-character suffix that qualifies a procedure or drug code without changing its identity.Definition

N

N4 qualifierThe two-character prefix that tells a payer the value following it is an 11-digit NDC.Definition NADACNational Average Drug Acquisition Cost — a survey-based benchmark of what retail pharmacies actually pay.Definition National Drug Code (NDC)The National Drug Code is the FDA's universal product identifier for a human drug: a three-segment number that names the labeler, the specific formulation and the package size.Definition NCPDPThe standards body for pharmacy transactions, whose telecommunication standard carries retail pharmacy claims.Definition NCT numberThe unique registry identifier assigned to a study on ClinicalTrials.gov.Definition NDC DirectoryThe FDA's published file of every drug currently or recently listed, updated daily and distributed through openFDA.Definition NDC exclusion listA payer-maintained list of drug codes that will not be reimbursed under a given benefit, regardless of medical necessity.Definition NDC quantityThe amount of drug actually taken from the package, expressed in the unit named by the unit qualifier.Definition New Drug Application (NDA)The application through which a sponsor seeks FDA approval to market a new brand-name drug.Definition NPINational Provider Identifier — the ten-digit number identifying a provider on every HIPAA transaction.Definition

O

openFDAThe FDA's public API, which exposes drug listing, labeling, adverse event and enforcement data as JSON.Definition Orange BookThe FDA publication listing approved drug products with their therapeutic equivalence evaluations and patent data.Definition OTC monographA rulebook that lets an over-the-counter drug be marketed without individual approval, provided it conforms to the monograph.Definition

P

Package codeThe third NDC segment, one or two digits, identifying a specific commercial package configuration of a product.Definition Package NDCA three-segment NDC identifying an exact commercial package — the form that belongs on a claim.Definition Pass-through paymentTemporary separate payment for a new drug or device in the hospital outpatient setting that would otherwise be bundled.Definition Payer IDThe identifier that tells a clearinghouse which payer a claim is destined for.Definition Phase 1The first stage of human testing, focused on safety, tolerability and dose range in a small group.Definition Phase 2Mid-stage testing for preliminary efficacy and further safety in several hundred patients with the target condition.Definition Phase 3Large confirmatory trials, usually randomised and controlled, that form the basis of an approval application.Definition Phase 4Post-marketing studies conducted after approval to monitor long-term safety and real-world effectiveness.Definition Physiologic effect (PE)A pharmacologic class describing the observable bodily effect a drug produces.Definition Place of serviceA two-digit code stating where a service was delivered.Definition Primary endpointThe pre-specified outcome a trial is designed and powered to measure.Definition Prior authorizationA payer requirement that a drug or service be approved before it is provided.Definition Private label distributorA retailer or wholesaler whose store-brand drugs carry its own labeler code.Definition Product codeThe second NDC segment, three or four digits, identifying one specific formulation: a given strength in a given dosage form.Definition Product NDCA two-segment NDC (labeler plus product) that identifies a formulation regardless of how it is packaged.Definition Purple BookThe FDA database of licensed biological products, including biosimilars and interchangeables.Definition

Q

Q-codeA temporary HCPCS Level II code CMS issues for drugs, biologicals and services pending a permanent assignment.Definition

R

RARCRemittance Advice Remark Code — supplementary detail that qualifies a CARC.Definition Recruiting statusWhether a study is currently enrolling participants.Definition Reference productThe originally licensed biological product against which a biosimilar is compared.Definition RelabelerA firm that applies its own label to a drug manufactured by someone else, assigning its own NDC.Definition Remittance advice (835)The X12 transaction explaining what a payer paid, adjusted or denied on each claim line.Definition REMSRisk Evaluation and Mitigation Strategy — a required safety program for drugs with serious risks.Definition RepackagerA firm that takes a finished drug and puts it into different containers, assigning its own NDC.Definition Revenue codeA four-digit code on an institutional claim identifying the hospital department or cost centre a charge came from.Definition Revenue code 0636Drugs requiring detailed coding — the revenue line for clinician-administered drugs billed with a HCPCS code.Definition Route of administrationHow a drug enters the body — oral, intravenous, subcutaneous, intramuscular, ophthalmic and so on.Definition RxCUIThe concept identifier within RxNorm — one number for one clinical drug concept.Definition RxNormA normalised naming system for clinical drugs, maintained by the National Library of Medicine.Definition

S

S-codeA HCPCS Level II code used by commercial payers and Medicaid but not recognised by Medicare.Definition Self-administered drugA drug that a patient can reasonably administer themselves, which therefore falls outside the medical benefit.Definition SerializationAssigning a unique serial number to each saleable drug package so it can be traced individually.Definition SNOMED CTA comprehensive clinical terminology used for problems, procedures and findings in electronic health records.Definition SponsorThe organisation that takes responsibility for a clinical trial and holds its regulatory filings.Definition Structured Product Labeling (SPL)The XML document standard in which manufacturers submit drug labeling to the FDA; it is the source of prescribing information shown in drug databases.Definition

T

Taxonomy codeA code describing a provider's specialty, used to route and price claims when the NPI alone is ambiguous.Definition Therapeutic equivalence codeA two-character Orange Book rating stating whether a generic is substitutable for its reference brand.Definition Timely filingThe deadline by which a claim must reach the payer, counted from the date of service.Definition

U

UB-04The institutional claim form used by hospitals and facilities; the 837I is its electronic equivalent.Definition UN qualifierUnit qualifier meaning each — used for tablets, capsules, vials and pre-filled syringes counted as whole items.Definition Unapproved drug otherA marketing category for products legally marketed without FDA approval, largely for historical reasons.Definition Unfinished drugAn active pharmaceutical ingredient or bulk material listed with the FDA but not in a finished dosage form.Definition UNIIUnique Ingredient Identifier — a non-proprietary code the FDA assigns to a specific substance.Definition Unit qualifierA two-character code stating the unit in which the NDC quantity is expressed.Definition

V

Vaccine product codeA CPT code in the 90xxx range identifying the vaccine itself, billed alongside a separate administration code.Definition

W

WAC (Wholesale Acquisition Cost)The manufacturer's list price to wholesalers, before discounts and rebates.Definition White baggingA specialty pharmacy ships the drug directly to the provider for a named patient; the pharmacy bills, not the provider.Definition

X

X12The standards body whose EDI formats carry HIPAA healthcare transactions.Definition

Looking for a worked explanation rather than a definition? The coding guide covers NDC formats, the 11-digit conversion and FDA marketing categories at length.