What does DAW code 3 indicate regarding prescription substitutions?

DAW code 3 indicates that generic substitution is permitted, but the pharmacist has chosen to dispense the brand-name medication instead of the generic version. This code signifies that while the patient can receive a generic option, the pharmacist has exercised their professional judgment to provide the brand for specific reasons, which may include considerations of efficacy, patient preference, insurance coverage, or availability.

Understanding this code is essential in pharmacy billing and reimbursement as it impacts how prescriptions are filled and subsequently reimbursed by insurance companies. Utilizing DAW code 3 ensures that the claim accurately reflects the circumstances under which the pharmacist made the substitution, thereby facilitating proper billing and minimizing potential issues with reimbursement.