Drug Reimbursement Codes

Written by Norene Anderson
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Drug reimbursement codes are standardized nationwide and are used by the provider of services to obtain payment. A standardized code makes it possible for trends and usage of various drugs to be tracked. This provides valuable information for determining the major reasons for prescribing certain medications. A diagnosis code is cross-referenced and that supplies statistics for documenting physician usage of particular medications.

The drug reimbursement codes are set using a methodology that has been proven accurate and effective. It does not include administration charges. The reimbursement for drugs includes all HCPCS and CPT drug codes along with the CMS and AMA descriptions. The Medicare allowable is clearly defined. The AWP (Average Wholesale Price) is also called the code price. This price is determined from the NDC published prices.

The Process of Drug Reimbursement Codes

The code price calculation is quite involved. There is one set of criteria for a single-source drug and another set of criteria for a multi-source drug. The national drug code with the lowest average wholesale price is the code price for the single-source drug. The multi-source drug price is determined by selecting the lower of either the lowest similar brand name NDC or the average AWP of the generic drug form.

Drug reimbursement codes are the pivotal point of discussion between the physicians, insurance carriers, and vendors. In order for physicians to provide the care needed and expected by patients, they must have the option to prescribe the best medications for the diagnosis. Pharmaceutical companies need money to fund research to develop better medications to treat the ever-changing health needs. The insurance companies must follow guidelines established by various control entities.


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