PHARMACY BILLING EXAM PREP 2026 Updated
Practice Questions Comprehensive Reimbursement and
Insurance Review Detailed Explanations | Verified Answers |
Success Workbook
QUESTION 1:
A patient presents a prescription for amoxicillin 500mg with a new insurance card.
The pharmacy technician notices the BIN number is 610014 and the PCN is
MEDD. Which type of insurance plan is this MOST likely associated with?
A) Commercial PPO
B) Medicare Part D
C) Medicaid
D) TRICARE
Answer: B) Medicare Part D
Rationale: BIN 610014 is specifically designated for Medicare Part D claims
processing. Medicare Part D is the outpatient prescription drug benefit for
Medicare beneficiaries. The PCN "MEDD" further confirms this is a Medicare Part
D plan. Commercial plans typically have different BIN ranges, Medicaid varies by
state, and TRICARE has its own specific identifiers. Understanding BIN/PCN
combinations is crucial for proper claim routing and adjudication.
QUESTION 2:
When processing a third-party claim, what does the "Days Supply" field primarily
determine?
A) The total cost of the medication
B) The patient's copayment amount
C) The allowable reimbursement from the insurance
D) The date of service validation
Answer: C) The allowable reimbursement from the insurance
,Rationale: The days supply is a critical factor in determining the allowable
reimbursement because it affects:
• The dispensing fee calculation
• Maximum allowable cost (MAC) pricing
• Quantity limits and day supply limits
• Pro-rata calculations for partial fills
• Refill too soon (RTS) adjudication
Insurance plans use days supply to verify appropriate utilization and calculate
prorated amounts for partial fills. The days supply also impacts the patient's
copayment calculation as some plans have tiered copays based on days supply.
QUESTION 3:
Which of the following is a valid NDC (National Drug Code) format?
A) 12345-678-90
B) 1234-5678-90
C) 12345-6789-0
D) 123-4567-890
Answer: C) 12345-6789-0
Rationale: The NDC format consists of three segments: Labeler (5 digits), Product
(4 digits), and Package (2 digits) = 5-4-2 format. While there are also 4-4-2 and 5-
3-2 formats, the 5-4-2 format is most common. Option C correctly shows a 5-digit
labeler code (12345), 4-digit product code (6789), and 2-digit package code (0).
Proper NDC formatting is essential for claims processing, as incorrect formatting
will result in claim rejections.
QUESTION 4:
A pharmacy receives a claim rejection stating "M/I Patient Gender Code." What is
the MOST likely cause?
,A) The patient's date of birth was entered incorrectly
B) The patient's gender is missing or invalid in the claim
C) The patient's insurance ID number is invalid
D) The patient's address doesn't match the insurance record
Answer: B) The patient's gender is missing or invalid in the claim
Rationale: "M/I" stands for "Missing/Invalid," and this specific rejection indicates
that the gender code field (Segment: AM06*05) is either blank or contains an
invalid value. Gender must be submitted as:
• M = Male
• F = Female
• U = Unknown
This rejection often occurs when new patients are entered without completing all
demographic fields. Gender is a required field for claims processing as it can affect
coverage decisions and drug utilization review (DUR) alerts.
QUESTION 5:
What is the primary purpose of the Prescription Drug Monitoring Program
(PDMP)?
A) To track medication adherence
B) To prevent prescription drug abuse and diversion
C) To verify insurance coverage
D) To calculate average wholesale price
Answer: B) To prevent prescription drug abuse and diversion
Rationale: PDMPs are state-run electronic databases that track controlled
substance prescriptions. Their primary purpose is to:
• Identify patients who may be "doctor shopping"
• Prevent prescription drug abuse and diversion
• Identify potential drug interactions
, • Support clinical decisions
• Assist in identifying fraudulent prescriptions
While PDMPs may indirectly assist with other functions, their core mission is
public health and safety regarding controlled substances. Pharmacy billing
professionals must understand PDMP requirements as they can affect claim
adjudication and dispensing.
QUESTION 6:
In pharmacy billing, what does "COB" stand for and what does it represent?
A) Cost of Business - operational expenses
B) Coordination of Benefits - process of determining primary vs. secondary payer
C) Certificate of Billing - proof of insurance
D) Claim Override Bypass - emergency override code
Answer: B) Coordination of Benefits - process of determining primary vs.
secondary payer
Rationale: Coordination of Benefits (COB) is the process of determining which
insurance plan pays first when a patient has multiple insurance coverages. The
primary payer processes the claim first, and the secondary payer may cover
remaining eligible expenses. Proper COB processing requires:
• Accurate sequencing of payers
• Correct submission of other insurance information
• Understanding of "Medicare as Secondary Payer" (MSP) rules
• Proper use of COB segments in claims
QUESTION 7:
A pharmacy technician receives a rejection code "64 - Prior Authorization
Required." What is the appropriate NEXT step?
A) Tell the patient the medication is not covered
B) Inform the prescriber and patient, and initiate the prior authorization process
Practice Questions Comprehensive Reimbursement and
Insurance Review Detailed Explanations | Verified Answers |
Success Workbook
QUESTION 1:
A patient presents a prescription for amoxicillin 500mg with a new insurance card.
The pharmacy technician notices the BIN number is 610014 and the PCN is
MEDD. Which type of insurance plan is this MOST likely associated with?
A) Commercial PPO
B) Medicare Part D
C) Medicaid
D) TRICARE
Answer: B) Medicare Part D
Rationale: BIN 610014 is specifically designated for Medicare Part D claims
processing. Medicare Part D is the outpatient prescription drug benefit for
Medicare beneficiaries. The PCN "MEDD" further confirms this is a Medicare Part
D plan. Commercial plans typically have different BIN ranges, Medicaid varies by
state, and TRICARE has its own specific identifiers. Understanding BIN/PCN
combinations is crucial for proper claim routing and adjudication.
QUESTION 2:
When processing a third-party claim, what does the "Days Supply" field primarily
determine?
A) The total cost of the medication
B) The patient's copayment amount
C) The allowable reimbursement from the insurance
D) The date of service validation
Answer: C) The allowable reimbursement from the insurance
,Rationale: The days supply is a critical factor in determining the allowable
reimbursement because it affects:
• The dispensing fee calculation
• Maximum allowable cost (MAC) pricing
• Quantity limits and day supply limits
• Pro-rata calculations for partial fills
• Refill too soon (RTS) adjudication
Insurance plans use days supply to verify appropriate utilization and calculate
prorated amounts for partial fills. The days supply also impacts the patient's
copayment calculation as some plans have tiered copays based on days supply.
QUESTION 3:
Which of the following is a valid NDC (National Drug Code) format?
A) 12345-678-90
B) 1234-5678-90
C) 12345-6789-0
D) 123-4567-890
Answer: C) 12345-6789-0
Rationale: The NDC format consists of three segments: Labeler (5 digits), Product
(4 digits), and Package (2 digits) = 5-4-2 format. While there are also 4-4-2 and 5-
3-2 formats, the 5-4-2 format is most common. Option C correctly shows a 5-digit
labeler code (12345), 4-digit product code (6789), and 2-digit package code (0).
Proper NDC formatting is essential for claims processing, as incorrect formatting
will result in claim rejections.
QUESTION 4:
A pharmacy receives a claim rejection stating "M/I Patient Gender Code." What is
the MOST likely cause?
,A) The patient's date of birth was entered incorrectly
B) The patient's gender is missing or invalid in the claim
C) The patient's insurance ID number is invalid
D) The patient's address doesn't match the insurance record
Answer: B) The patient's gender is missing or invalid in the claim
Rationale: "M/I" stands for "Missing/Invalid," and this specific rejection indicates
that the gender code field (Segment: AM06*05) is either blank or contains an
invalid value. Gender must be submitted as:
• M = Male
• F = Female
• U = Unknown
This rejection often occurs when new patients are entered without completing all
demographic fields. Gender is a required field for claims processing as it can affect
coverage decisions and drug utilization review (DUR) alerts.
QUESTION 5:
What is the primary purpose of the Prescription Drug Monitoring Program
(PDMP)?
A) To track medication adherence
B) To prevent prescription drug abuse and diversion
C) To verify insurance coverage
D) To calculate average wholesale price
Answer: B) To prevent prescription drug abuse and diversion
Rationale: PDMPs are state-run electronic databases that track controlled
substance prescriptions. Their primary purpose is to:
• Identify patients who may be "doctor shopping"
• Prevent prescription drug abuse and diversion
• Identify potential drug interactions
, • Support clinical decisions
• Assist in identifying fraudulent prescriptions
While PDMPs may indirectly assist with other functions, their core mission is
public health and safety regarding controlled substances. Pharmacy billing
professionals must understand PDMP requirements as they can affect claim
adjudication and dispensing.
QUESTION 6:
In pharmacy billing, what does "COB" stand for and what does it represent?
A) Cost of Business - operational expenses
B) Coordination of Benefits - process of determining primary vs. secondary payer
C) Certificate of Billing - proof of insurance
D) Claim Override Bypass - emergency override code
Answer: B) Coordination of Benefits - process of determining primary vs.
secondary payer
Rationale: Coordination of Benefits (COB) is the process of determining which
insurance plan pays first when a patient has multiple insurance coverages. The
primary payer processes the claim first, and the secondary payer may cover
remaining eligible expenses. Proper COB processing requires:
• Accurate sequencing of payers
• Correct submission of other insurance information
• Understanding of "Medicare as Secondary Payer" (MSP) rules
• Proper use of COB segments in claims
QUESTION 7:
A pharmacy technician receives a rejection code "64 - Prior Authorization
Required." What is the appropriate NEXT step?
A) Tell the patient the medication is not covered
B) Inform the prescriber and patient, and initiate the prior authorization process
