Maximizing Reimbursement: Navigating Medical Insurance Billing For Drug Deliveries

Billing medical insurance for drug deliveries can be done in two ways: pharmacy billing and medical billing. Pharmacy billing is a more straightforward process, where the pharmacy bills the patient's drug insurance and dispenses the medicine. On the other hand, medical billing is more complex and profitable for providers, as they bill the patient's medical insurance for the drug and then purchase it through a distributor or pharmacy. This additional revenue comes with more financial risk and administrative work for the provider. It is important to understand the pros and cons of each billing method to ensure patients receive their medications without unnecessary delays or complications.

Pharmacy billing

There are two main approaches to pharmacy billing: brown bagging and white bagging. Brown bagging refers to the pharmacy billing the patient for the medication, collecting payment, and then providing the medication to the patient to bring to the provider's office for administration. White bagging, on the other hand, involves the pharmacy billing and collecting payment from the patient, but the medication is sent directly to the provider's office or site of administration.

To ensure a successful pharmacy billing program, several critical components must be considered. These include establishing solid foundations, such as securing contracts with payers and credentialing staff; selecting revenue-enhancing services that align with patient and payer needs; and effectively managing the billing process by accurately assigning CPT or HCPCS codes and employing Revenue Cycle Management (RCM) techniques.

Additionally, pharmacies must establish medical contracts with payers, such as insurance companies and government programs like Medicaid and Medicare, to be reimbursed for their services. This involves negotiating payment rates and agreeing to the terms and conditions outlined in the "provider agreement." It is also important for pharmacies to stay informed about any changes to medical claims regulations, including coding requirements and payer policies, to ensure accurate and timely reimbursement.

Medical billing

Pharmacy Billing

Pharmacy billing involves sending a prescription to a pharmacy, which then bills the patient's drug insurance and dispenses the medicine either directly to the patient or to the provider's office. This method simplifies the clinic's workflow as the pharmacy handles the billing and reduces the patient's out-of-pocket costs. It also allows the pharmacist to double-check for drug interactions and counsel the patient on the medication. However, it increases the risk of temperature excursions due to special storage requirements and the risk of waste if the medication is already dispensed and the patient requires a change in therapy or dosage.

Choosing Between Pharmacy and Medical Billing

In some cases, the patient's insurance will require either medical or pharmacy billing. At other times, the provider can choose the billing method. Pharmacy billing can free up administrative time for the provider, while medical billing offers the opportunity for higher revenue. However, medical billing also carries a higher financial risk due to the additional expenses and administrative time involved.

Understanding Insurance Coverage

Before billing a patient's insurance, it is important to understand their coverage. Patients can review their insurance plan's formulary (approved list of medications) to determine if a prescription is covered. They can also call their insurer directly or review any coverage materials provided by their plan. Additionally, patients have the right to follow their insurance company's drug exceptions process if their medication is not typically covered. This process may involve the patient's doctor confirming that the prescribed drug is appropriate for their medical condition.

Insurance coverage

In the United States, Medicare drug coverage helps pay for prescription drugs. It is available to everyone with Medicare, and it is optional. If you don't have Medicare, you can still get prescription drug coverage through your insurance plan. To find out which prescriptions are covered, visit your insurer's website, see your Summary of Benefits and Coverage, call your insurer directly, or review any coverage materials that your plan mailed to you.

There are two primary ways of billing a patient's insurance for prescription drugs: pharmacy billing and medical billing. Pharmacy billing refers to sending a prescription to the pharmacy, which then bills the patient's drug insurance and dispenses the medicine to the patient or the provider's office. Medical billing, on the other hand, refers to the provider's office billing the patient's medical insurance for the drug and then purchasing it through a drug distributor or pharmacy.

In some cases, insurance requires either medical or pharmacy billing, while in other cases, the provider can choose. Pharmacy billing simplifies the clinic's workflow but may increase the risk of temperature excursions and waste. Medical billing can be more profitable for the provider's office but comes with added administrative time and the cost of purchasing and storing medications.

It is important to note that each insurance plan varies in cost and specific drugs covered. Therefore, it is essential to review your insurance plan's details and contact your insurer if you have any questions about coverage.

Administration fees

The administration fees for drug deliveries can vary depending on the location and the type of pharmacy. In most states in the US, these fees typically range between $9 and $12 per prescription. However, there may be instances where the administration fee is higher, such as for specialty drugs or pharmacies filling fewer prescriptions. It's important to note that each state has its own policies on dispensing fees, and these fees can be adjusted to accommodate changes in ingredient costs.

In Canada, dispensing fee policies in public drug plans also vary across provinces. For example, in Alberta, the pharmacy funding framework allows for a dispensing fee of $12.15, while in Ontario, the dispensing fee ranges from $8.83 to $13.25 per prescription. These fees are regulated and defined as the amount regularly charged by a pharmacist to persons responsible for paying the fee without reimbursement.

It's worth noting that administration fees are separate from the cost of the drug itself, which is typically covered by the patient's medical or drug insurance. The administration fee is charged by the pharmacy for the service of administering the drug, and it is typically reimbursed by the patient's insurance plan. This fee is important to consider when billing insurance to ensure that all costs associated with the drug delivery are covered.

Additionally, it's important to be aware of any specific requirements or restrictions that may apply to administration fee reimbursement. For example, in certain cases, a prescription may be required for pharmacists to administer and claim the fee, especially for specific types of drugs. Understanding the billing procedures and requirements beforehand can help ensure a smooth reimbursement process for administration fees.

Pros and cons of pharmacy billing

Pharmacy billing is a process that involves sending a prescription to a pharmacy, which then bills the patient's drug insurance and dispenses the medication to the patient or the provider's office. This method simplifies the clinic's workflow, but it has certain drawbacks.

Pros of Pharmacy Billing:

• It allows eligible patients to use copay or free-trial cards to reduce their out-of-pocket costs, which can lead to substantial savings.
• It saves the clinic a significant amount of time by handling the billing for medications. Most specialty pharmacies have staff who can complete prior authorizations on the provider's behalf.
• It allows the pharmacist to double-check for drug interactions, dosing, and the appropriateness of therapy. It also gives them a chance to counsel the patient on the medication.

Cons of Pharmacy Billing:

• It increases the risk of temperature excursions as many medications have special storage requirements, such as refrigeration, and the patient receives and stores the medication at home.
• It increases the risk of waste as the medication must be discarded if it has already been dispensed and the patient then requires a therapy or dose change.
• It may increase costs for the patient as the pharmacy will keep all the profits from the drug, and the patient will only earn the administration fee.
• It can be time-consuming as the pharmacy takes care of all the billing.

Frequently asked questions