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Understanding Usual and Customary Pricing in Pharmacies

A guide to establishing and maintaining compliant billing practices for cash-paying and third-party patients.

RELATED LINKS 

For additional resources to support daily pharmacy operations and compliance click HERE. 

Full Article: 

Overview 

Usual and customary (U&C) pricing is a key concept in pharmacy billing. It refers to the lowest price a pharmacy would charge a cash-paying customer for an identical prescription at that location on a given day, including any applicable discounts, promotions, or offers. Understanding U&C pricing ensures pharmacies maintain compliant billing practices for both cash-paying and third-party patients. 

 

Key Points About Usual and Customary Pricing 

  1. Billing Third-Party Payors
  • Pharmacies must bill all third-party payors using the usual and customary charge for covered prescriptions.  
  • This ensures consistency and compliance with payer contracts and regulations.  
  1. Components of U&C Pricing
  • The U&C charge includes any dispensing fees that the pharmacy would normally apply to cash-paying customers.  
  • It reflects the total amount the general public would pay for the same prescription without insurance.  
  1. Verification of Pricing
  • U&C pricing may be reviewed during third-party audits or on-site visits.  
  • Accurate and documented U&C pricing helps demonstrate compliance and avoids potential billing disputes.  

 

Best Practices 

  • Maintain a clear and updated record of usual and customary prices for all commonly dispensed medications  
  • Include all applicable fees, discounts, and promotions in the U&C calculation  
  • Train staff on applying U&C pricing consistently when billing cash-paying customers and third-party payors  
  • Review pricing regularly to reflect changes in acquisition costs or pharmacy services  

 

Key Takeaway 

Establishing and maintaining accurate usual and customary pricing is essential for compliant billing, transparency, and patient trust. By consistently applying U&C charges, pharmacies can ensure fair pricing practices for cash-paying customers and maintain regulatory compliance with third-party payors. 

 

Disclaimer: These tools and templates are intended for general informational purposes and are provided by Montana Family Pharmacies as a service to pharmacies. While we try to keep the information timely and accurate, we make no guarantees. These tools and templates are not a substitute for legal, regulatory, or professional advice. 

Policies and procedure, templates, checklists, and other tools should be customized to fit the specific needs and regulatory requirements of your pharmacy. 

Montana Family Pharmacies disclaims any liability for any damages, losses, or other consequences arising from the use or reliance on the tools or policy templates.