Pharmacy Pharmacy Billing and Insurance 1 — Questions and Answers
Question 1: What does the DAW code '1' indicate on a prescription?
- Dispense as written — brand medically necessary (Correct answer)
- Generic substitution allowed
- Patient requested brand
- No product selection indicated
Correct answer: Dispense as written — brand medically necessary
DAW 1 means the prescriber has indicated that the brand-name drug is medically necessary and generic substitution is not permitted.
Question 2: Which field on a pharmacy claim identifies the prescriber's DEA number?
- Field 411-DB (Correct answer)
- Field 444-E9
- Field 340-7H
- Field 103-A3
Correct answer: Field 411-DB
NCPDP field 411-DB is the standard field used to transmit the prescriber's DEA number on a pharmacy claim.
Question 3: A patient's insurance plan has a $300 deductible that has not been met. The medication costs $120. What does the patient owe?
- $120 (Correct answer)
- $0
- $300
- $60
Correct answer: $120
Because the deductible has not been met, the patient must pay the full medication cost of $120 out-of-pocket.
Question 4: What is a formulary in the context of pharmacy insurance?
- A list of drugs covered by an insurance plan (Correct answer)
- A prescription routing system
- A drug interaction database
- A patient allergy record
Correct answer: A list of drugs covered by an insurance plan
A formulary is a list of prescription drugs, both generic and brand-name, preferred by a health plan and covered at varying cost-sharing tiers.
Question 5: Which reject code indicates that a patient's prescription benefit has reached its plan limit?
- 76 — Plan limitations exceeded (Correct answer)
- 70 — Product not covered
- 88 — DUR reject
- 41 — Submit bill to other processor
Correct answer: 76 — Plan limitations exceeded
Reject code 76 means the patient has exceeded the benefit maximum set by their insurance plan for a specific drug or category.
Question 6: A co-pay assistance card cannot be used with which type of plan?
- Federal or state government insurance such as Medicare or Medicaid (Correct answer)
- Commercial PPO plans
- Employer-sponsored HMO plans
- High-deductible health plans
Correct answer: Federal or state government insurance such as Medicare or Medicaid
Federal anti-kickback laws prohibit the use of manufacturer co-pay assistance cards with federally funded insurance programs like Medicare and Medicaid.
Pharmacy Pharmacy Billing and Insurance 1
What does the DAW code '1' indicate on a prescription?