What does a DAW code indicate when submitted with a pharmacy claim?

A DAW code, or Dispense As Written code, is essential in the pharmacy billing process as it specifies the prescriber's intent regarding the substitution of a medication. When submitted with a pharmacy claim, the DAW code communicates whether the pharmacist is to dispense a brand-name drug, a generic equivalent, or if substitution is not permitted due to the prescriber’s instructions.

For instance, if a prescriber specifically requests a brand-name medication and that is indicated by a DAW code, the pharmacy must comply, and the insurance provider will recognize that the dispensing of the brand-name drug is justified. Conversely, if a generic is allowable or preferred, a different DAW code can indicate that substitution is acceptable.

Therefore, the code provides clarity on the reason for dispensing a specific form of the drug, which is critical for appropriate reimbursement processing and ensuring that the pharmacy complies with the physician's orders.