“A” for Abandoned: The Short Life of DAW Code A and What it Means for Multi-Payor Claims

The National Council for Prescription Drug Programs (NCPDP) has concluded DAW A was more trouble than it was worth. As stated in Version 69 of the NCPDP Telecommunication Version D and Above Questions, Answers and Editorial Updates (here in “NCPDP FAQ”), “the use of DAW A may create barriers, such as:

• Pharmacy systems ability to support multiple DAW codes for a single prescription fill,
• Payor systems determining payer coverage, reimbursement, and variation in reject codes when receiving the value of “A”
• COB payer systems not recognizing the reject codes or payment amount from the primary payor responding to DAW A.”

NCPDP’s original approval set in motion plans which would make DAW A “effective” as of October 2025 when it becomes incorporated into the Annual External Code List (ECL). However, information about the appropriate use of DAW A was available in advance of its “effective” date. The NCPDP FAQ (Version 65) had DAW A information added in May of 2024, and DAW A explanations were found within the April 2024-April 2025 ECL Publications. With early access to the definition of DAW A and utilization guidance from NCPDP, some software vendors and/or payors may have proactively implemented DAW A as a billing option.

With the recent decision to eliminate this code, DAW A should be “obsolete” as of July 2025; except, the removal of DAW A is not truly “effective” until October 2026 based on the innate timeline of the NCPDP Data Element Request Form (DERF) process. This means there will be one year (October 2025 through October 2026) where DAW A is “available”, but its utilization will be discouraged through adjudication messaging. NCPDP’s guidance states “Payors should reject all claims where value A is submitted with Reject Code (511-FB) value 8K: DAW Code Value Not Supported”.

With this shift, NCPDP has released updated guidance regarding DAW code utilization (specifically, new instructions on the appropriate use of DAW 9 utilization) in their newest NCPDP FAQ. Below are several key points from the FAQ document:

• DAW 9 is accepted when the prescriber allows substitution on the prescription, but the plan formulary requests the brand or reference product be dispensed.
• Plans requesting the multi-source brand/reference product should support the use of DAW 9.
• The use of DAW 9 for a multi-source brand/reference product not requested, or no longer required by the plan, should result in a point of service rejection to indicate the brand/reference product is not required by the plan to allow for substitution where applicable. This point-of-sale rejection allows pharmacies to update the claim before re-adjudicating.

• Now until October of 2026, the reject code is “22: M/I Dispense as Written (DAW)/Product Selection Code”
• Effective October 2026, the reject code will be “XXX: Plan Does Not Request Brand or Reference Product”
• There are options for payors on multi-payor claims (where one payor prefers the multi-source brand/reference product, and the other payor prefers the generic) to decrease the risk of delaying patient access to care:

• The secondary payor may relax their formulary requirement to match the requirement of the primary payor to allow the claim to successfully process
  • i.e., the secondary payor will accept the generic, despite the brand being their formulary preference, since the primary payor required generic
  • Example: The secondary usually prefers Symbicort^® with DAW 9, however, the primary payor prefers budesonide/formoterol. The pharmacy will bill the generic to the primary for a successful claim then proceed to bill the generic to the secondary payor. Even though the formulary preference for the secondary is Symbicort^®, they will allow the generic to successfully adjudicate by relaxing enforcement of their formulary preference.
• The secondary payor may enforce their formulary requirement by accepting the missing/invalid DAW rejection from the primary payor as acceptable
  • i.e., the secondary payor enforces their formulary preference for a multi-source brand/reference product billed with DAW 9 with Other Coverage Code 3 (308-C8) and will accept the rejection message from the primary payor to allow the claim to process as brand/reference product to the secondary payor
  • Example: The pharmacy bills generic Symbicort^® and receives a paid claim from the primary payor, but a rejection from the secondary payor indicating the brand is preferred. The pharmacy reverses the claim to the primary payor, swaps out the generic for brand Symbicort^® and reprocess to the primary payor with DAW 9. The primary rejects the claim with “22: M/I Dispense as Written (DAW)/Product Selection Code” (until October 2026). The pharmacy will continue to adjudicate the claim to the secondary with Symbicort, DAW 9 and Other Coverage Code 3. The secondary payor will accept the reject code as appropriate and pay the claim.

PAAS Tips:

• Do not use DAW A, even on multi-payor claims where one prefers the brand and the other prefers generic
• Ensure billing staff closely watch adjudication messaging regarding DAW codes, especially when using DAW 9
• Review the updated DAW Codes Explained tool for comprehensive insight into appropriate DAW code utilization