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Five Common Mistakes Made on Pharmacy Claims—And How to Avoid Them

By Tracie Acosta, CPhT

Suspect claims lead to lost revenue. Follow these guidelines to safeguard your hard-earned prescription income.
Five pencils lined up side by side
Independent pharmacies dispense, on average, about 60,000 prescriptions per year, which works out to roughly 200 per day. Government programs (Medicaid or Medicare Part D) and third-party payors cover slightly more than 90 percent of those scripts, with an average prescription charge of about $56.1

Considering those numbers, there’s clearly a lot at stake every time a pharmacy technician enters a claim for prescription reimbursement from a payor. Incorrect or questionable claims can trigger an audit, which can lead to recoupment of entire reimbursement amounts, plus a potential audit fee. Some audits simultaneously wipe out pharmacy profits on hundreds of claims. That’s why it’s essential that you and your staff know what can derail the claims adjudication process and how you can avoid trouble before it starts.


Common pharmacy claims errors

Pharmacy benefit managers (PBMs) have access to your store’s prescription claims data and can identify claims that don’t meet legal, regulatory, industry or PBM-established standards. Under such scrutiny, independent pharmacies most commonly fall short with claims submissions in the following five areas:

  1. Invalid prescription
    Federal and state requirements determine what constitutes a valid prescription. A prescription would be invalidated if it were missing any legal requirements, such as the prescriber’s signature, drug quantity or date, or if the patient is misidentified.

  2. Incorrect days’ supply
    It’s sometimes tough to calculate days’ supply, especially if the prescription calls for dispensing a kit or a complex/atypical dosing regimen. Mistakes commonly occur when entering claims for inhaled, ophthalmic/otic, vaginal and topical products.2

  3. Refilled too soon
    If there is an incorrect days’ supply on a previous fill, it can lead to a prescription being refilled sooner than allowed, which is an immediate red flag.

  4. Incorrect quantity
    Days’ supply and number of refills also factor into submitting the correct quantity. For example, a 30-day supply of a maintenance drug with no refills would be incorrect if billed for a quantity of 90. However, that same prescription with three refills would be acceptable for a quantity of 90.

  5. Incorrect DEA/NPI number
    The number on the prescription must match the DEA/NPI/prescriber identification number on the claim.

Pre-submission checklist

To ensure legal compliance and prevent profit leakage, you need to know—and adhere to—all applicable state laws, rules and pharmacy regulations, as well as the provisions of payor contracts and related PBM manuals. In practical terms, concentrate on these items:

  • Everything starts with a valid script, which must properly indicate the drug prescribed, along with the drug’s strength, quantity and directions for use. The prescriber’s signature and the date prescribed must also be included. If just one of those items is missing, the payor could recoup the entire claim amount from your pharmacy.
  • The phrase “use as directed” requires more specificity. This comes into play with prepackaged items such as insulin, creams and eye drops. All directions must be calculable so the technician can enter an accurate days’ supply.
  • Double-check the “dispense as written” (DAW) code when a brand-name drug is not covered by the payor. They usually favor generic drugs because they’re cheaper, but the prescriber or patient may specify a branded product. When the prescriber wants the patient to receive a brand-name drug instead of a generic version, the proper code is DAW1. Likewise, DAW2 applies to a patient requesting a branded drug rather than a generic. Match the intended DAW code to the instructions on the prescription.
  • The National Drug Code (NDC) number, a unique product identifier, must appear on every submitted claim. A generic drug could have multiple manufacturers, each of which would have its own NDC. The NDC submitted on a claim must be an exact match to the NDC on the product actually dispensed to the patient. This is a patient-safety issue because the NDC provides a means of tracking down recalled products. As such, entering an incorrect NDC carries significant risk for triggering an audit.
  • All point-of-sale (POS) messages should be reviewed during the claims-submission process. Exceeding a payor’s limitation on a drug could generate a pop-up message in your pharmacy’s POS system. For instance, a patient who lost his vial of eye drops (30-day supply) may ask for an early refill. The technician processing the claim would get a POS message indicating that the script should not be refilled due to the 30-day limitation. Although the patient needs assistance to get his medication, the tech should not change the days’ supply in order to push through the claim. That would trigger an audit for circumventing the plan, setting the stage for recoupment. Instead, the pharmacy should contact the plan to get an override for an allowable refill.

Be careful now to come out ahead later

A pharmacy audit typically reviews claims submitted as far back as the previous 24 months and may examine hundreds of prescriptions with an emphasis on the most expensive medications.3 But as long as you’re focused on entering valid scripts and following all applicable regulations and guidelines with every submission, you’ll be well positioned to protect every dollar of your prescription income.

Concerned that human error is unavoidable?

No one is perfect and, despite your best efforts, claim mistakes are bound to happen from time to time. That’s where our Pre and Post Edit solution comes in. It functions like spellcheck for your claims by automatically reviewing every submission for data accuracy and applying real-time edits to make sure simple mistakes don’t endanger your reimbursement.
A Good Neighbor Pharmacy managed care expert shakes hands with a plan representative

1. National Community Pharmacists Association. 2017 NCPA Digest.

2. Center for Medicare and Medicaid Services. Pharmacy Auditing and Dispensing Job Aid: Billing Other Dosage Forms.

3. Pharmacy Times. Pharmacy Compliance Audits: What Pharmacists Can Expect.

Managed care

About The Author

Tracie Acosta, CPhT
Analyst, Pharmacy Audit and Compliance, Elevate Provider Network
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