Have you ever wondered why payers will reject some prescription claims, adjudicate others with profits, or reimburse some claims with a loss? The answer may lie with whether the medication’s NDC (National Drug Code) is on the prescription drug formulary list.  If the medication is included on the formulary list, what tier is it on and is it a preferred medication? The answer may affect pharmacy reimbursement, claim adjudication, and patient copay assignments.

A prescription drug formulary is a list of prescription drugs covered by a prescription drug plan or another insurance plan offering prescription drug benefits¹. Formularies are commonly used by pharmacy benefit managers (PBMs) and health plans to determine medication coverage, patient cost-sharing, and pharmacy reimbursement. Within a formulary, there is typically a preferred list and a non-preferred list. NDCs are categorized into these tiers based on how much the payer will cover for that medication which can directly affect reimbursement, patient copays, and pharmacy profitability.

Let’s take a closer look at how formulary status influences pharmacy claims processing and the factors that may cause a prescription claim to reject, adjudicate with profits, or adjudicate with losses. Read more >