Why Does Billing the Correct Origin Code Matter?

Pharmacies are required to enter an origin code on claims to indicate where the prescription came from or “originated.” By definition, an origin code cannot change and should remain billed as how the pharmacy originally received the prescription from the prescriber, even when clarifications of that prescription are done by telephone.

Why does billing the correct origin code matter?

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In general, origin code errors are educational with a few exceptions. Humana will charge a $5 penalty fee for an incorrect origin code being billed when discovered on audit. This will be for the original claim and each refill also billed incorrectly (e.g., original fill plus 11 refills = $60 recoupment). If a telephone order is sent in for audit when billed with a different origin code, some auditors will assume the pharmacy could not find the “original” prescription and simply wrote one up. Auditors will mark the claim discrepant until the pharmacy can produce the prescription with the correct origin code or obtain a prescriber statement. Additionally, with Medicare Part D now requiring electronic prescribing of controlled substances (EPCS), CMS will rely on the origin code (initiated by the pharmacy) in the Prescription Drug Event (PDE) data to determine if physicians are adhering to the requirements.

NCPDP defines origin code values as follows:

0 Not Known
1 Written – Prescription obtained via paper.
2 Telephone – Prescription obtained via oral instructions or interactive voice response using a phone.
3 Electronic – Prescription obtained via SCRIPT or HL7 Standard transactions, or electronically within closed systems.
4 Facsimile – Prescription obtained via transmission using a fax machine.
5 Pharmacy – This value is used to cover any situation where a new Rx number needs to be created from an existing valid prescription such as traditional transfers, intrachain transfers, file buys, software upgrades/migrations, and any reason necessary to “give it a new number.” This value is also the appropriate value for “Pharmacy dispensing” when applicable such as BTC (behind the counter), Plan B, established protocols, pharmacists authority to prescribe etc.

Here are questions PAAS National® has frequently answered:

Question 1: If a pharmacy calls a prescriber to clarify a written prescription, or a change is needed, does the origin code become a “2” for Telephone?

Answer: No, the NCPDP Telecommunication FAQ section states, “Because the prescription was received via written form the Prescription Origin Code is 1 and will remain a 1 throughout the life of the prescription number.” The same would be true if received by any other origin.

Question 2: If a prescriber sends a prescription electronically, but the pharmacy is not electronically-prescribing enabled or if there is a transmission error, and the intermediary drops the prescription to a fax, what origin code is used?

Answer: Per NCPDP, “Because the prescription was received at the pharmacy via fax the Prescription Origin Code is 4 and will remain a 4 throughout the life of the prescription number.”

Question 3: What origin code is used for a standard written authorization or protocol for services and products like, vaccines or Narcan®?

Answer: The NCPDP definition for protocols is Prescription Origin Code of “5” since the prescription is created by the pharmacy in these cases.

PAAS Tips:

  • Always bill the correct origin code to avoid potential recoupment.
  • The origin code remains the same through the life of the prescription.
  • Too many incorrect origin code discrepancies can lead to more frequent audits.
  • See the NCPCP Telecommunication Version D and Above Questions, Answers and Editorial Updates document for more information and scenarios.
Jenevra Azzopardi, CPhT
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