Billing Guidance: When to Use DAW 0 vs DAW 9

PAAS National® analysts frequently see PBM audit results where auditors have flagged claims with ‘incorrect DAW code submitted’ – while these are often educational discrepancies, it is important to understand the implications of incorrect DAW code submission and develop a consistent process for pharmacy staff to follow.

A common DAW code issue found during audits (and a common question received by PAAS analysts) is how to handle claims where the plan prefers the brand name due to formulary rebates.

NCPDP explains that DAW 9 should be used when the plan prefers brand and explicitly states that “DAW 0 is not appropriate and may result in a reject”. While this NCPDP guidance is intended to standardize claims adjudication process across the industry, it would seem that real-life adoption of this standard by PBMs varies considerably.

In many cases, the pharmacy will not know if the plan prefers brand or generic until the claim submission process has started – as a result, pharmacy staff will need to be able to recognize dynamic claim reject messages and respond appropriately. PAAS recommends that pharmacies develop a step-by-step process or algorithm to handle appropriate DAW code submission.

Here is a suggested workflow:

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  1. Attempt to bill “generic” product (AB rated generic/authorized generic or interchangeable biosimilar/unbranded biologic) and submit DAW 0, unless the prescriber or patient have indicated a preference for the brand (DAW 1, DAW 2 respectively) and make note of any claim reject messages.
  2. Respond to claim reject message regarding preferred product/DAW code; if no clear information is provided, then attempt to bill for the “brand/reference” product and submit DAW 9 and make note of any claim reject messages.
  3. Only after attempting steps #1 and #2 above should pharmacy attempt to bill the brand/reference product and submit DAW 0

Here are the full NCPDP definitions for DAW 0 and DAW 9 for related context.

Code Description
0 No Product Selection Indicated – This is the field default value that is appropriately used for prescriptions for single source brand, co-branded/co-licensed, or generic products. For a multi-source branded product with available generic(s), DAW 0 is not appropriate, and may result in a reject.
9 Substitution Allowed By Prescriber but Plan Requests Brand – Patient’s Plan Requested Brand Product To Be Dispensed – This value is used when the prescriber has indicated, in a manner specified by prevailing law, that generic substitution is permitted, but the plan’s formulary requests the brand product. This situation can occur when the prescriber writes the prescription using either the brand or generic name and the product is available from multiple sources.

PAAS Tips:

  • We recommend that pharmacies have documentation to support the submission of DAW codes 1-9, consider a brief clinical note with the date, staff initials and reason for DAW code submitted.
  • Review October 2022 Newsline article, Are You Utilizing DAW Codes Correctly? Updated Tool Available! and check out the resource, DAW Codes Explained to help train your team on appropriate DAW code submission.
  • Pharmacies may want to perform internal “self audits” on their DAW claims to check for accuracy and consistency. Run a report and look for any non-zero DAW codes (NCPDP field 408-D8) to ensure you have submitted the correct DAW code AND you have appropriate documentation to support.

Eric Hartkopf, PharmD