PTCB Inventory Management & Billing 2 — Questions and Answers
Question 1: What does 'DAW' stand for on a prescription, and what does DAW 1 indicate?
- Dispense As Written; the prescriber requires the brand-name drug (Correct answer)
- Drug Approval Waiver; the drug has prior authorization
- Dispense Alternate Widely; generics are preferred
- Drug Availability Warning; the medication may be on shortage
Correct answer: Dispense As Written; the prescriber requires the brand-name drug
DAW (Dispense As Written) codes indicate substitution instructions; DAW 1 means the prescriber specifically requires the brand-name product.
Question 2: Which government program provides prescription drug coverage primarily for individuals aged 65 and older?
- Medicaid
- CHIP
- Medicare Part D (Correct answer)
- TRICARE
Correct answer: Medicare Part D
Medicare Part D is the federal prescription drug benefit designed for Medicare beneficiaries, primarily those aged 65 and older.
Question 3: What is a 'prior authorization' (PA) in pharmacy billing?
- Approval from the state board before dispensing a controlled substance
- A prescriber's approval required before the pharmacy can fill a prescription
- Insurance plan approval required before covering a specific medication (Correct answer)
- A patient's written consent for a new prescription
Correct answer: Insurance plan approval required before covering a specific medication
A prior authorization is approval from the insurance plan that must be obtained before the plan will cover certain high-cost or non-formulary medications.
Question 4: What does 'adjudication' mean in the context of pharmacy billing?
- The pharmacist's review of a prescription for clinical appropriateness
- The electronic process of submitting a claim to insurance and receiving payment determination (Correct answer)
- The DEA's review of controlled substance prescriptions
- The process of compounding a non-sterile preparation
Correct answer: The electronic process of submitting a claim to insurance and receiving payment determination
Adjudication is the real-time electronic process where the pharmacy submits a claim and the insurance plan returns a payment approval or rejection.
Question 5: A patient has both primary and secondary insurance. What is 'coordination of benefits' (COB)?
- The process of splitting a prescription between two pharmacies
- The process of determining how two insurance plans share payment responsibility (Correct answer)
- A requirement that both plans must authorize the same medications
- A billing error that results in double payment to the pharmacy
Correct answer: The process of determining how two insurance plans share payment responsibility
COB rules determine which insurance plan pays first (primary) and how the secondary plan covers remaining costs to prevent overpayment.
Question 6: What is the 'deductible' in a prescription drug insurance plan?
- The fixed dollar amount paid per prescription
- The percentage of drug cost the patient pays after meeting the deductible
- The amount the patient must pay out-of-pocket before insurance begins covering costs (Correct answer)
- The maximum amount the insurance will pay annually
Correct answer: The amount the patient must pay out-of-pocket before insurance begins covering costs
A deductible is the amount a patient must pay out-of-pocket before the insurance plan starts contributing to prescription costs.
Question 7: Which term describes the fixed dollar amount a patient pays for each prescription, regardless of the drug's total cost?
- Premium
- Deductible
- Coinsurance
- Copay (Correct answer)
Correct answer: Copay
A copay (or copayment) is a fixed dollar amount (e.g., $10 or $40) the patient pays per prescription fill, independent of the medication's actual price.
PTCB Inventory Management & Billing 2
What does 'DAW' stand for on a prescription, and what does DAW 1 indicate?