Request information or call us at  1-866-336-3879

Top 5 Ways Pharmacies Can Optimize Their Prescription Reimbursement from Third-Party Payers

Pharmacists sometimes have hundreds of prescriptions to fill each day. They need to move quickly and efficiently to get it all done, while still considering the health and wellbeing of their patients.   

In a fast-paced environment, sometimes good billing practices and operational habits can be overlooked, jeopardizing the health of your business.

Here are the top 5 things you should do to make sure you receive optimum reimbursement from third-party payers.  

1. Update the Average Wholesale Price (AWP) in your dispensing system regularly.
Contact your dispensing system vendor to find out how frequently the AWP updates occur. If your dispensing system is updated less than daily, there could be a gap between when an AWP is increased by the manufacturer and when your software is updated. Submitting a lower than eligible AWP could result in a loss of revenue.

2. Use the correct Dispense as Written (DAW) code when dispensing a brand drug that has a generic alternative.   
If a brand drug must be dispensed instead of the generic alternative, an appropriate DAW code should be used. Depending on formulary restrictions, patient preference, and other variables, you may be required to dispense a generic instead of the brand. Neglecting to use the proper DAW code could result in lower reimbursement.

Click here to see definitions of the Dispense as Written codes, pharmacy use cases, and expected payer outcomes.

3. Audit your inventory and inventory management software regularly for discontinued National Drug Codes (NDCs).   

Although there may be purchasing discounts on discontinued NDCs, it is important to review the possible reimbursement on inactive NDCs. Once a NDC is discontinued, AWP increases no longer apply, which may result in lower reimbursement. Dispensing an active NDC that costs a little more, could yield a higher profit due to a higher AWP.

Contact us to learn more!

4. Purchase the lowest cost drugs to yield a higher profit margin.   
Your purchasing department plays a critical role in your pharmacy’s profit margins. Frequently check with your wholesaler to ensure you are purchasing the lowest cost product.  Smarter purchasing could result in higher revenues for the pharmacy. 

5. Review your retail pricing regularly. 
Check to be sure your Usual and Customary price (U&C) and your Gross Amount Due (GAD) are not lower than your contracted rate with the PBMs. Many PBMs reimburse based on the lowest of the following:  Contract Rate, U&C, or GAD. Managing your U&C and GAD and comparing them to the contracted rate could provide opportunities for higher reimbursements.  

Ensuring optimization of your reimbursements takes continuous monitoring and an in-depth knowledge of the pharmacy industry.

At Net-Rx™, a provider of pharmacy reimbursement solutions exclusively for pharmacies, we provide pharmacies with reimbursement solutions designed to drive operational excellence and optimum financial performance across reconciliation, reimbursement verification, and prescription pricing. Our solutions include reports that monitor AWP, DAW, U&C, and more. Additionally, our pharmacy reimbursement trained analysts will suggest best practice solutions to correct anomalies, prevent missed opportunities, and recover lost revenue.

We help you take care of your business so you can take care of your patients.

Read more articles that cover topics such as submission clarification codes and how formulary status affects claim responses and reimbursement.


Kathleen Skokan LinkedIn icon
Joined Net-Rx in June 2005
 Working in a pharmacy as a technician provided Kathleen with a unique perspective of the challenges our members face in billing and reimbursement from third party payers and helped frame her commitment to find workable solutions to those challenges. As a manager she is privileged to work with a team of knowledgeable individuals who care deeply about the success of our members, which continues to be her source of motivation. She is a west coast girl from Portland, Oregon. She loves the beautiful Cascade Mountains, the Oregon Coast, and spending time with her very large family.