In pharmacy billing, what risk is associated with under-calculating the WAC?

Under-calculating the Wholesale Acquisition Cost (WAC) poses a significant risk of reimbursement denial. WAC serves as a critical benchmark for determining the pricing of drugs, and underestimating this cost can lead to several challenges in the billing and reimbursement process.

When pharmacy providers submit claims to insurance companies or other payers, they typically base their reimbursements on the stated WAC for the medications dispensed. If the calculated WAC is lower than the actual cost of the medication, the pharmacy may not receive sufficient reimbursement to cover the cost of the drug. This discrepancy can result in claims being denied outright, as payers may reject requests that do not align with their pricing structures or that appear inconsistent with market values.

Furthermore, a lower WAC can lead to disputes or audits from payers, as they might question the validity of the claimed amount. This ultimately can affect the pharmacy's cash flow and profitability, emphasizing the importance of accurately calculating WAC to prevent reimbursement complications.