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D.0 Is Live; But Will Pharmacy Survive?
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D.0 Is Live... But Will Pharmacy Survive?

What is D.0?

Simply put, it is a set of defined fields and parameters which pharmacy dispensing software and third-party claims software uses within the claims submission system. It was developed by the National Council on Prescription Drug Programs (NCPDP).NCPDP Telecommunications Standard Version D.0 is an updated version of the HIPAA standard for pharmacy claims transactions.

Why is this happening?

Federal law – HIPAA which passed back in 1996 – mandated a uniform set of electronic communication standards for Medicare and Medicaid. Implementation of those standards has been extended multiple times and now, January 1, 2012, is the “turn on the switch” date.

Is this just for pharmacy?

No, all healthcare providers and health systems are undergoing similar changes to their communication standards, including physicians, hospitals, payers, pharmacies, dentists, and data clearinghouses.. D.0 is the pharmacy version. For the rest of the health care system, HIPAA X12 Version 5010 is the new set of standards that regulate the electronic transmission of specific healthcare transactions, including eligibility, claim status, referrals, claims, and remittances. Covered entities, such as health plans, healthcare clearinghouses, and healthcare providers are required to conform to HIPAA 5010 standards. Use of the 5010 version of the X12 standards and the NCPDP D.0 standard is required by federal law. The compliance date for the use of these updated standards is January 1, 2012 as well.

What’s different between D.0 and 5.1?

There are significant differences between the two version, driven by a need to support clarification of field uses, consistency across transactions, and the removal of data content that is no longer used or relevant.


In NCPDP D.0, modifications to fields currently supported in NCPDP 5.1 include removal of certain fields, addition of four new segments, and changes to some field attributes currently used in NCPDP 5.1. Supporting documentation and a complete list of changes and discussions about the impacts of NCPDP D.0.

Specifically, there are several changes that compounders should be aware of:

  1. Three new segments were added to allow for the Medicare Certificate of Medical Necessity information.
  2. In NCPDP 5.1, there were two alternatives for submitters to bill compounds, which have been removed for NCPDP D.0. Submitters will need to ensure that they are transmitting the information in the ‘Compound’ segment of D.0.
  3. NCPDP D.0 added both new fields and better definitions to existing fields used for pricing information in order to improve the balancing of transactions.
  4. For Coordination of Benefits, new fields and clarifications of usage were added to this area and should be reviewed closely during implementation to ensure proper transmission of COB information. This primarily affects physicians and hospitals rather than IACP members.
  5. The data field 402-D2 was increased from seven to twelve digits in length, which represents a challenge during the migration to the new standard if submitters or payers try to convert to using a longer prescription/service reference number before their trading partners are ready.

I don’t bill third-parties for my compounds. What do I need to know?

D.0 requires that for compounded preparations, the pharmacy provide a list of all active and inactive ingredients with a cost associated with each. Your patients who submit claims for non-covered prescriptions such as compounds may need to have that information.

What do I put down for cost of the ingredients?

Ingredient cost is defined in your contract with each individual third-party. If you are a non-participating pharmacy provider, you define the cost as you wish.


From 6 January 2012

D.0 Is Live… But Will Pharmacy Survive?

On January 1, 2012, the new D.0 transmission dataset for submitting third-party claims to payors went into effect and, as expected, there have been numerous problems affecting not only compounders but all pharmacies. Despite months of implementation testing between pharmacy dispensing systems and various third-parties, the sheer volume of claims being submitted is turning up glitches in the communication channels.

IACP has been fielding calls left-and-right from its members about D.0 and continues to work with other pharmacy associations to identify trends that we can address as organizations. Unfortunately, many of the problems pharmacists are experiencing are just showing up – nobody knew they existed until this week.

For background on D.0, take a look at a previous issue of IACP’s Capitol Connections for more information.

Here are some answers to some of the most common questions we’ve received the past few days.

Q. We need to postpone/stop D.0! What is IACP doing to make this stop?

A. The original provisions within HIPPA of 1997 to require a national electronic communications standard for all health care claims have been postponed multiple times over the past 15 years. D.0 for pharmacy along with other modified communications standards for hospitals, physicians, dentists, and others will not be postponed or rescinded. D.0 is not going away. While CMS has provided for a 1 April 2012 delay for some Medicaid and Medicare claims submissions – mostly within Medicare Part B -- almost all state Medicaid programs and all Medicare Part D claims processors are using D.0 now.

Q. The claim processing system requires me to put down all my active and inactive ingredients. I don’t want to list them.

A. Then you will only be paid based upon the ingredients you do list. You are required to include those ingredients, the NDC and the cost associated for each, as part of your contractual agreement with the third-party. Additionally, most processors also require that you indicate route of administration (e.g., topical, PO, IV, etc.) If you do not include all ingredients and the route of administration as required and are subsequently audited, the third-party may deny the entire claim for being submitted incorrectly and require that you pay them back for the payment.

Q. There’s no place to put in my LOE (Level of Effort) or charge for compounding. Where does that go?

A. It varies among pharmacy dispensing software systems and also appears to vary depending on the third-party system as well. Because there are literally thousands of plans for each major third-party – Medco, for example, has more than 3,000 different plans it administers – there’s no single answer. Call your pharmacy dispensing software system immediately to report the problem and get clarification.

Q. My pharmacy dispensing software company says their system is right but the third-party is the problem. The third-party says that the dispensing software company is the problem. I’m stuck in the middle.

A. This is a problem that’s affecting every pharmacy – both compounders and traditional non-compounders. Right now, every computer program is having challenges talking the same, new language that D.0 represents. For example, ExpressScripts (ESI) is problematic but CVS/CareMark seems to function correctly even though your computer is sending the same information in the same format to both. IACP is tracking patterns of particular companies so please let us know who your software system is and which third-party is involved. That will let us know where best to focus our efforts.

Q. I don’t bill third-parties directly but use the IACP’s Universal Claim Form to give to patients who submit for reimbursement. The old form needs to be updated.

A. IACP has updated its Universal Claim Form for members to include expanded space for listing all active and inactive ingredients, ingredient costs, and providing a place to note route of administration. This will be released to all members shortly; however, because of the importance of assuring that our members receive reimbursement for their compounding services, we are consulting with major third-parties as well as NCPDP to determine the best way to include that.

With thanks to:

David G. Miller, R.Ph., IACP
Washington Headquarters
1321 Duke Street, Suite 200 | Alexandria VA 22314
P: 703-299-0796 | C: 215-778-5128 | F: 703-299-0798

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