Please Note How NCPDP D.0 Affects DAW Codes

Please note how NCPDP D.0 affects DAW codes

The Centers for Medicare & Medicaid Services (CMS) issued a final rule that mandates the modification of Health Insurance Portability and Accountability Act (HIPAA) transaction standards, including National Council for Prescription Drug Programs (NCPDP) version D.0. The implementation of NCPDP D.0 changes the way providers should submit claims with the following dispense as written (DAW) codes:

  • Under the National Council for Prescription Drug Programs (NCPDP) 5.0, Indiana Medicaid providers submitted a DAW value of 6 to indicate a prescriber's specification of "brand medically necessary" on a prescription. Under D.0, providers should submit a value of 1 for this same prescribing situation.
  • For the purposes of the Indiana Health Coverage Programs (IHCP) pharmacy benefit, only DAW codes 0, 1, 5, 8, and 9 should be submitted by providers. The following table shows general information about these codes.
NCPDP D.0 DAW code NCPDP narrative description of code Relevant information
0 No product selection indicated Appropriate to use for prescriptions for single-source brand, cobranded/colicensed, or generic products
1 Substitution not allowed by prescriber

Appropriate to use:

  • When a multiple-source brand-name drug has been prescribed, and the prescriber has signed on the "dispense as written" line of the prescription
  • When a multiple-source brand-name drug has been prescribed, and the prescriber has signed on the "dispense as written" line of the prescription and indicated "brand medically necessary," in accordance with law
5 Substitution allowed--brand drug dispensed as a generic Appropriate to use when the prescriber has indicated, in a manner specified by prevailing law, that generic substitution is permitted, and the pharmacist elects to dispense the brand-name product
8 Substitution allowed--generic drug not available in marketplace Appropriate to use when the prescriber has indicated, in a manner specified by prevailing law, that generic substitution is permitted, and the brand product is dispensed because the generic is not currently manufactured, distributed, or is temporarily unavailable; providers' use of this value will be closely monitored via audits
9 Other Appropriate to use when generic substitution is permitted, but the Office of Medicaid Policy and Planning (OMPP) Preferred Drug List (PDL) lists the brand-name product as preferred

Other changes

  • The IHCP will change how payments are processed when third-party liability amounts are a factor. Please see the payer sheet on this website for all required fields; and see NL201111 for specific billing instructions.
  • In the "Other Coverage Code" field,  05, 06, 07, and 08 are no longer valid values. Valid values for this field include:
    • 00 - Not specified by patient
    • 01 - No other coverage
    • 02 - Other coverage exists - payment collected
    • 03 - Other coverage billed - claim not covered
    • 04 - Other coverage exists - payment not collected
  • Patient residence codes have been expanded. Please see the payer sheet for more information.

Vendor testing is now under way. If your store or corporation would like more information about vendor testing opportunities, please email INXIXPharmacyD0@hp.com.

If you have questions, please contact Customer Assistance at (317) 655-3240 in the Indianapolis local area or toll-free at 1-800-577-1278.