CPhT CPhT Insurance and Billing 1 — Questions and Answers
Question 1: What does 'DAW' stand for on a prescription?
- Dispense As Written (Correct answer)
- Drug Authorization Waiver
- Daily Allowed Withdrawal
- Dose Adjustment Warning
Correct answer: Dispense As Written
DAW (Dispense As Written) indicates the prescriber requires the brand-name drug and no generic substitution is allowed.
Question 2: What is a pharmacy benefit manager (PBM)?
- A pharmacy technician supervisor
- A third-party administrator that manages prescription drug benefits (Correct answer)
- A government agency that regulates drug pricing
- A pharmacist who manages patient medications
Correct answer: A third-party administrator that manages prescription drug benefits
A PBM is a third-party administrator that manages prescription drug benefits on behalf of health insurers, employers, and other payers.
Question 3: What is a formulary?
- A list of approved medications covered by an insurance plan (Correct answer)
- A calculation method for pediatric dosing
- A register of controlled substances
- A form used for prior authorization
Correct answer: A list of approved medications covered by an insurance plan
A formulary is a list of prescription drugs covered by a health insurance plan, typically organized into tiers based on cost.
Question 4: What does 'prior authorization' (PA) require?
- A patient signature before dispensing
- Approval from the insurance company before dispensing certain medications (Correct answer)
- A second pharmacist verification
- A DEA number from the prescriber
Correct answer: Approval from the insurance company before dispensing certain medications
Prior authorization requires the prescriber to obtain approval from the insurance company before a specific medication will be covered.
Question 5: What is a copayment in pharmacy billing?
- The total cost of a medication
- A fixed amount the patient pays for a prescription (Correct answer)
- The amount reimbursed to the pharmacy
- A deductible paid annually
Correct answer: A fixed amount the patient pays for a prescription
A copayment is a fixed dollar amount the patient pays out-of-pocket for each prescription at the time of dispensing.
Question 6: What is the BIN number used for in pharmacy?
- Identifying the pharmacy location
- Routing insurance claims to the correct PBM (Correct answer)
- Tracking controlled substance inventory
- Identifying the prescriber
Correct answer: Routing insurance claims to the correct PBM
The BIN (Bank Identification Number) is a 6-digit number on insurance cards used to route electronic prescription claims to the correct PBM.
CPhT CPhT Insurance and Billing 1
What does 'DAW' stand for on a prescription?