Welcome to the Department of Health Care Services Welcome to Medi-Cal Welcome to the Department of Health Care Services

Pharmacy FAQs

Answers to frequently asked questions are provided and grouped into topical categories.

For general questions (not specific to pharmacy) please see the FAQ page.

Compounds: POS Network/NCPDP 5.1 and RTIP

  1. Why am I getting NCPDP reject code 70 (NDC not covered) for my compound claim?
    A. Compounds are billable through CALPOS and Real-Time Internet Pharmacy (RTIP) for dates of service beginning September 22, 2003. You will see this error for claims with a date of service before September 22, 2003. You must bill these claims using the old method (30-1 claim form with a compound attachment).
  2. What product ID do I use to reverse a compound claim in RTIP?
    A. Use 0 for the product ID. This is the NCPDP product ID value that indicates a compound.
  3. My compound claim is getting a Medi-Cal denial message stating "Manual claim required." I am also getting "Missing/Invalid ingredient quantity" (NCPDP reject code ED).
    A. If the occurrence indicator shows this error is happening for your NDC=99999999997 (container count), your container count is greater than 20. A Treatment Authorization Request (TAR) is required when more than 20 containers are billed for IV claims.

Compounds: General (Paper, POS Network/NCPDP 5.1 and RTIP)

  1. What do I put in the Service Code field on a Treatment Authorization Request (TAR) when getting authorization for compound prescriptions?
    A. For paper TARs, continue to use 99999999996 to describe a compound prescription. When entering your prior authorization in SURGE, select "Pharmacy-Compound Drug" from the list of TAR services.
  2. Why is my compound claim hitting the six-prescription limit (NCPDP reject code 76/Plan limitation exceeded) with Medi-Cal denial message 673 (The claim exceeds the monthly prescription limit)? The claim requires an approved Treatment Authorization Request (TAR).
    A. The six-prescription limit is only bypassed for claims that require paper submission. Compound claims no longer fall into that category since electronic methods of submission are now available. The six-prescription-per-month limit now applies to compound pharmacy claims. Since many providers are not yet prepared to bill electronically, it is still possible to bill using a 30-1 claim form with an attachment during the grace period, which will end April 1, 2004. These claims will not be edited for the six-prescription limit.
  3. I put an "X" in the Process for Approved Ingredients field on my 30-4 claim form. Why was my claim denied?
    A. The only allowable values for Process for Approved Ingredients are "Y" and blank.

NCPDP Telecommunications Version 5.1 and Batch Version 1.1

  1. Why is my claim getting rejected for numeric fields that have a value of "0" when my software compresses out zeros per the NCPDP standard?
    A. The NCPDP standard says that leading zeros can be trimmed. At least one zero must remain for fields that are required by Medi-Cal or the claim will be rejected.
  2. I am entering a value of "0" in the Submission Clarification Code field (420-DK), but when I transmit my claim, it is getting rejected for "M/I Submission Clarification Code". My transmission software is suppressing the field, since the value is zero and it is optional per the NCPDP standard. Why is Medi-Cal rejecting the claim?
    A. Although the Submission Clarification Code is optional in the NCPDP standards, NCPDP allows the transmission receiver to specify fields as mandatory. The Submission Clarification Code is a required field for Medi-Cal, so should be treated as a mandatory NCPDP field and not be truncated. The same applies to the Compound Code field (406-D6), which is a mandatory field for Medi-Cal and optional for NCPDP.
  3. How do I show money received from Other Health Coverage?
    A. Put a "2" (Other coverage exists and payment collected) in the Other Coverage Code field (308-C8) and the dollar amount collected in the Other Payer Amount Paid field (431-DV).
  4. Why is my claim with Other Health Coverage (OHC) being rejected? I am showing the OHC money collected in the Other Payer Amount Paid field (431-DV).
    A. If you have OHC money in the Other Payer Amount Paid field (431-DV) and the Other Coverage Code field (308-C8) is not "2", your claim will be rejected. All other Other Coverage Code values indicate that OHC money was not collected.
  5. I am putting "01" into the Other Payer Coverage Type field to indicate the recipient's primary coverage. The recipient has no other coverage other than Medi-Cal. Why is my claim getting rejected?
    A. "99" is the only value that will be accepted for Other Payer Coverage Type. This indicates that the Other Payer Amount Paid is the total received from all payers.

Certification and Changes to Real Time Pharmacy (CALPOS)

  1. I am getting an error for the Customer Location field on my test for an NCPDP Version 5.1 transaction.  The Medi-Cal specifications say that I can put "00" in the field meaning "Not Specified."   Can I also put blanks if I don't want to specify the customer location?
    A. This error is referring to the Customer Location field for NCPDP Version 3.2.  The field was renamed for NCPDP Version 5.1 to Patient Location field (307-C7).  Numeric fields that are not required should NOT contain spaces. NCPDP allows for optional fields not to be included by having field separators. To leave a field out, the field separator in front of the field should be followed directly by the field separator or group separator after the field. If spaces are in the field and the spaces are not a valid value for the field, the transaction will be rejected.
  2. Can I bill for medical supplies through CALPOS?
    No. Medical supplies must be billed on paper or through CMC using NCPDP Batch Version 1.1, ANSI 837 Professional or Medi-Cal Proprietary Medical (claim type 05).
  3. When is Medi-Cal going to stop accepting pharmacy claims in NCPDP Version 3.2 format?
    A. Medi-Cal stopped accepting NCPDP Version 3.2 pharmacy claims on October 1, 2003.
  4. Where can I find a list of NCPDP reject codes returned by CALPOS?
    A. The Provider Manual has a list of NCPDP reject codes returned in CALPOS responses in Reject Codes for Medi-Cal-Supplied POS Device.
  5. Why am I getting NCPDP reject code 52 (non matched cardholder I.D. number) when submitting a BIC ID?
    A. Most likely the BIC ID used is not the current BIC ID. Ask the recipient for the current BIC ID card. If the recipient does not provide an ID card containing a more current BIC Issue date, then ask the recipient for the SSN and follow the Recipient Eligibility Verification FAQ 1 instructions to obtain the current BIC ID using the SSN. If the recipient does not have the current BIC card or an SSN, follow the Recipient Eligiblity Verification FAQ 2 instructions to obtain the BIC ID from the County Office.

Computer Media Claims (CMC) Questions

  1. When we mail in a tape, we also send in a report on that gives the totals of the different pharmacies and also gives the overall total. Will this still be necessary?
    A. Yes. The paper transmittal (80-1 form) that comes in with a tape will still be required. All tape/cartridges coming in need to have this form attached to give the summary of the batch.
  2. We were told that Medi-Cal will no longer be using reel-to-reel tapes. Is the standard for tapes now a 3480 cartridge?
    A. Reel-to-reel tapes are no longer accepted. Medi-Cal accepts tape cartridges in the standard 3480 cartridge.
  3. If we have only one claim for a patient, can we send in all four claim detail segments, so that we don't have to deal with variable data and can always send in a record of the same length? Do we initialize the fields in the blank details to zeros and spaces depending on their format?
    A. No. This is not a legal use of the NCPDP standard, because the claim segment has fields that are required, and if the field is there, the system will process it as a claim detail.
  4. I am currently sending pharmacy claims through CMC using the Medi-Cal proprietary format. Do I need to test to be able to send NCPDP Batch Version 1.1 claims through CMC?
    A. Yes, you will need to create ten to 100 claims in the new format. Refer to the Section 100-25, Testing and Activation Procedures, of the CMC Technical Manual for information about the CMC testing and activation process. The phone number for submitting test claims using a modem is (916) 638-8127. For instructions about submitting test tapes or how to test using the Internet, call the CMC Help Desk at (916) 636-1100.
  5. How do I bill for medical supplies using NCPDP Batch Version 1.1?
    A. Put a "99" (Other) in the Product/Service ID Qualifier field (436-E1) and the medical supply code in the Product ID field (407-D7). If the medical supply requires supporting documentation in the form of remarks or attachments, the claim must be submitted on paper because there is no remarks area in the NCPDP Batch Version 1.1.
  6. What blocksize do I use for the new NCPDP Batch Version 1.1 on tape?
    A. For EBCDIC format tapes, use fixed block, 80 byte records. The last record should be made 80 bytes by padding the end of the record with spaces if necessary.

    For ASCII format tapes, there should be no leading bytes on the block or record. Records should be unblocked (for example, one record per block). Records must all be 80 bytes in length. The last record should be made 80 bytes by padding the end of the record with spaces if necessary.

  7. Where can I find a list of NCPDP reject codes returned in my NCPDP Response?
    A. Click here to access a page showing NCPDP reject codes.

Pharmacy Claim Form (30-1) Questions

  1. How do I fill out the Metric Quantity field on the new 30-1 form?
    A. For dates of service prior to October 1, 2002, the uantity dispensed must be submitted as a whole number. For example, a quantity of "4" must be submitted as "4.000" (the field must include trailing zeroes). A quantity of 3.5 should be rounded up to 4 and submitted as "4.000".

    For dates of service on or after October 1, 2002, a decimal point and the trailing zeros must be present. For example, a quantity of "3.5" must be submitted as "3.500." A quantity of 100 should be billed as "100.000".

  2. Do I need to include the decimal point in dollar amount fields on the paper claim form?
    A. No, do not put the decimal point in the dollar amount fields on the paper claim form. The cents should be included in the amount. For example, $10.00 should appear as "1000" in a dollar amount field.
  3. How do I order the new Pharmacy Claim Form (30-1), Version 7?
    A. The new Pharmacy Claim Form can be ordered by calling the Provider Support Center (PSC) at 1-800-541-5555. You will receive the claims 2-3 weeks after placing the order.
  4. Do I have to fill in the Other Health Coverage Code (OTH COV CODE) field?
    A. If the recipient has other health coverage, please put the appropriate code in the Other Health Coverage Code field. Please put 0 (Not Specified or No Other Coverage Exists) if the recipient does not have other health coverage or leave the field blank.

General Pharmacy Questions

  1. I can't reverse a claim because I already deleted it from my system. Can you reverse it for me?
    A. No. Medi-Cal personnel do not have the authority or ability to reverse claims at this time.  Only providers can reverse a claim.
  2. How often is Medi-Cal's formulary updated?
    A. New records are added to the file weekly. The Contract Drugs List and the DUR: Alert Criteria tables are updated monthly.
  3. When does Medi-Cal update the prices on drugs?
    A. Prices for drugs are updated weekly. The effective date of the price is set to the date that the formulary file is updated.
  4. How many drugs can I bill a month before I have to get a Treatment Authorization Request (TAR)?
    A. TAR is required after the sixth prescription of the month. However, some drugs for cancer, AIDS and family planning are exempt from this policy. In addition, policy allows for dispensing a 100 days supply (over 3 months), if appropriate.
  5. What is a Code 1?
    A. The provider is confirming, to the best of their knowledge, that the recipient meets the restriction(s) listed under the drug in the Contract Drugs List section of the Part 2 provider manual. If the recipient does not meet the requirements, providers must submit a Treatment Authorization Request (TAR) before prescribing the medication. It is always a good idea to document the Code 1 override.
  6. How do I override a Code 1?
    A. Electronically, you place a "7" in the Submission Clarification field (420-DK). On paper claims, you place a "Y" in the Code 1 Met field.
  7. What is a Drug Use Review (DUR) and how do I override a DUR?
    A. Click here for answers to DUR questions.
  8. Where do I get the Pharmacy manual?
    You can view the Pharmacy manual online. The Web site includes a search function within the provider manuals section.
  9. Can I use Other Health Coverage (OHC) code 5 (managed care plan denial) to override a claim for a Medi-Cal managed care recipient?
    A. No. Medi-Cal managed care plans are responsible for drugs to these recipients, except for the carved-out drugs. The carved-out drugs do not need an OHC override to be paid fee-for-service by Medi-Cal. Denial code 0037 "Health Care Plan enrollee, capitated service not billable to Medi-Cal" is your hint that the recipient is Medi-Cal managed care.

Medi-Cal Usual and Customary Charges for Brand and Generic Prescribed Drugs

  1. Where in legislation does California define “usual and customary?”
    A. Welfare and Institutions Code (W&I Code) 14105.455, which states:
    • (a) Pharmacy providers shall submit their usual and customary charge when billing the Medi-Cal program for prescribed drugs.
    • (b) “Usual and customary charge” means the lower of the following:
      • 1) The lowest price reimbursed to the pharmacy by other third-party payers in California, excluding Medi-Cal managed care plans and Medicare Part D prescription drug plans.
      • 2) The lowest price routinely offered to any segment of the general public.
    • (c) Donations or discounts provided to a charitable organization are not considered usual and customary charges.
    • (d) Pharmacy providers shall keep and maintain records of their usual and customary charges for a period of three years from the date the service was rendered.
    • (e) Payment to pharmacy providers shall be the lower of the pharmacy’s usual and customary charge or the reimbursement rate pursuant to subdivision (b) of Section 14105.45.
    • (f) Notwithstanding Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, the Department may take actions specified in this section by means of a provider bulletin or notice, policy letter, or other similar instructions, without taking regulatory action.
  2. I thought “usual and customary” was the price charged to a cash paying customer – it’s not?
    A. No. W&I Code 14105.455 defines “usual and customary charge” as the lower of the following:
    • 1) The lowest price reimbursed to the pharmacy by other third-party payers in California, excluding Medi-Cal managed care plans and Medicare Part D prescription drug plans.
    • 2) The lowest price routinely offered to any segment of the general public.
  3. Does “the lowest price routinely offered to any segment of the public” include “club prices” or “discount cards” offered by a specific pharmacy or a pharmacy within a chain, even if members must pay a fee to belong to the club?
    A. Yes. If the club price or discount card is routinely offered to any segment of the general public, the rate must be considered in calculating the lowest rate.
  4. The definition of “Usual and Customary (U & C)” as defined in W & I Code 14105.455 differs from the National Council for Prescription Drug Programs (NCPDP) definition. If U&C as defined by NCPDP is not the same number as U&C as defined by W&I Code 14105.455, which number should be entered in the “Usual and Customary” field upon claims transmittal to Medi-Cal?
    A. The Department adjudicates claims based on the “Gross Amount Due” field which, for prescription drugs, is the sum of the “Ingredient Cost Submitted” and the “Dispensing Fee Submitted” fields. In order to comply with the definition of “Usual and Customary” pursuant to the W&I Code, a provider should enter the combination of ingredient cost and dispensing fee that reflects the lower of (1) the lowest price reimbursed to the pharmacy by other third-party payers in California, excluding Medi-Cal managed care plans and Medicare Part D prescription drug plans and (2) the lowest price routinely offered to any segment of the general public.

    The Usual and Customary Field on a NCPDP transaction is defined by NCPDP as the amount charged to a cash paying customer. The Department does not edit/use the Usual and Customary Field in the adjudication of pharmacy claims. Therefore, pharmacies should continue to enter the price amount charged to a cash paying customer in the NCPDP “Usual and Customary” field.

  5. How often must pharmacies establish their “usual and customary charge” (as defined by W & I Code 14105.455) and what records must be retained?
    A. The Department expects that pharmacies will determine their usual and customary charges for the purpose of billing Medi-Cal at least annually before July 1.
    • Pharmacies must complete and submit to the Department an annual attestation of their usual and customary reimbursement rate for (a) brand name drugs and (b) generic drugs. This should be done using the Medi-Cal Usual & Customary Rates Report (MC 3152).
    • This form will be retained by the Department for auditing purposes. The Department recommends that pharmacies retain a copy for their records, as well, in the event that an audit occurs.
    • Other than the Medi-Cal Usual & Customary Rate Report, the Department is not defining the specific records pharmacies must keep for auditing purposes. However, documentation of the methodology used to determine the brand and generic rates and evidence to support that determination will be important in the event of an audit.
    • Records must be kept for a period of three years as stated in W & I Code 14105.455 (d).
  6. How will this program be enforced?
    A. Primarily through post-payment audits.
  7. There are obstacles in determining the lowest pharmacy rate for generics, one of which is that the MAIC pricing set by private third party payers may be updated multiple times within a day, and a pharmacy may not know the contracted price until billed for that drug. How should the rate billed to Medi-Cal be determined in this situation?
    A. Providers should refer to their third party contracts to calculate their lowest rate. As the Department implements Medi-Cal MAICs, the MAIC will be considered the lowest ingredient cost. The pharmacy will then bill the Department the established MAIC price plus its lowest generic dispensing fee.


Note:

If you cannot view the MS Word or PDF (Portable Document Format) documents correctly, please visit the Web Tool Box to link to a download site for the appropriate reader.