OBJECTIVE To upgrade the drug traceability code management system for a pediatric hospital under the “payment by code” background， aiming to comprehensively enhance traceability integrity， efficiency， and compliance. METHODS Taking Xiamen Children’s Hospital as the implementation setting， a before-and-after control design was adopted to construct an intelligent drug traceability code management system through systematic upgrades involving the technology platform， core mechanisms， and coordination with medical insurance. Key interventions included： upgrading a traceability code management platform and designing a dynamic code pool； innovating differentiated traceability mechanisms for routine， split-dose， and special drugs； establishing a tiered early-warning and emergency response system； and constructing a data coordination and quality control system. The drug traceability code upload rate served as the primary outcome. Process indicators such as the root causes distribution of failed uploads and the duration of medication returns， and a comprehensive outcome （the number of insurance-flagged abnormal prescriptions） were also analyzed. The data between the baseline period （April 2025） and the observation period （June-August 2025） were compared and evaluated. RESULTS After the upgrade， the overall upload rate of drug traceability codes increased from 9.21% （baseline） to 99.86% （August 2025）. The upload rate of traceability codes in previously unmanaged areas， such as the inpatient pharmacy and pharmacy intravenous admixture services， soared from 0 to nearly 100%. The proportion of non-uploads due to system issues fell from 66.44% （June 2025） to 2.62% （August Additionally， the number of insurance-flagged） abnormal prescriptions dropped sharply from 2 275.00 in the first “payment by code” policy month （July 2025） to 212.00 by the end of the observation period （August 2025）， a 90.70% decrease. CONCLUSIONS The developed management system effectively addresses complex scenario challenges such as high-frequency drug splitting. It significantly enhances traceability code upload performance and ensures a high degree of compliance with medical insurance data requirements. These outcomes contribute to proactive risk mitigation against insurance claim denials and demonstrate a concurrent optimization of pharmacy operations.