Unraveling The Secrets To Mastering Insurance Billing In Pharmacy

Mastering insurance billing in the pharmacy setting is a crucial competency for technicians and pharmacists alike. Pharmacy billing refers to the process of sending a prescription to a pharmacy, which then bills the patient's drug insurance and dispenses the medication. This process involves several steps, including documenting patient information, negotiating with manufacturers, verifying patient and physician details, and organising prescription drugs.

Pharmacy billing can be further categorised into home care pharmaceutical billing and core management. It is important to note that pharmacy claims are generally easier to submit than medical billing claims. However, both types of billing require knowledge of specific codes, such as National Drug Codes and prescription numbers, as well as the Healthcare Common Procedure Coding System (HCPCS) and Current Procedural Terminology (CPT) codes.

To ensure proficiency in pharmacy billing, technicians can pursue certifications like the PTCB Billing and Reimbursement Assessment-Based Certificate, which demonstrates foundational knowledge and leadership potential in this area.

Understanding the basics of pharmacy billing

Pharmacy billing is a critical component of the healthcare system, ensuring that patients can access the medications they need. It involves sending a prescription to a pharmacy, which then bills the patient's drug insurance and dispenses the medication. This process is typically easier than medical billing, as pharmacy claims are generally approved if the medication was prescribed by a physician and covered by the patient's insurance plan.

Pharmacy billing encompasses several key steps, including receiving mail orders, verifying patient and physician details, data entry and conversion, checking for medication refills, and organising prescription drugs. It also involves placing orders, order management, billing administration, and submitting pharmacy claims.

One of the most critical aspects of pharmacy billing is the use of standardised coding systems. In the past, pharmacy billing was handled by Pharmacy Benefit Managers (PBMs), but the increasing role of pharmacists in providing clinical services has led to the adoption of medical claims submission. This involves using Current Procedural Terminology (CPT) codes and Healthcare Common Procedure Coding System (HCPCS) codes to accurately represent the services provided by pharmacists. These codes are standardised and reviewed annually by the American Medical Association. They are essential for securing fair reimbursement from insurance payers.

To establish a solid foundation for pharmacy billing, it is crucial to secure contracts with payers, credential staff, select reliable technology partners, and provide comprehensive training. This process can take between 3 to 6 months to complete. Additionally, pharmacies must identify reimbursable services, evaluate service demand, and ensure alignment with payer requirements.

The billing process itself involves accurately assigning CPT or HCPCS codes, submitting claims electronically, tracking claim status and reimbursement, and staying informed about regulatory changes.

Pharmacy billing plays a vital role in ensuring patients receive their medications and contributes to increased sales and patient loyalty. By understanding the basics of pharmacy billing, pharmacists can effectively navigate the complexities of the billing system and maximise reimbursement for their services.

The transition from traditional pharmacy billing to medical claims submission

The Old Way: Traditional Pharmacy Billing

Pharmacy billing involves submitting claims to insurance payers for reimbursement for pharmacy services, including dispensing medications and providing medication therapy management (MTM). These claims are typically submitted as D.0 billing, as set by the National Council for Prescription Drug Programs (NCPDP). Traditionally, pharmacy billing has been handled by Pharmacy Benefit Managers (PBMs).

The New Way: Medical Claims Submission

Medical claims submission, on the other hand, involves using Current Procedural Terminology (CPT) codes and Healthcare Common Procedure Coding System (HCPCS) codes to accurately represent the services provided by pharmacists. These codes are standardized and reviewed annually by the American Medical Association. They are essential for securing fair reimbursements from insurance payers and communicating the value of pharmacist-provided care.

Key Components of the Transition

Making the transition from traditional pharmacy billing to medical claims submission requires several critical steps:

• Establishing a Solid Foundation: This includes securing contracts with payers, credentialing staff, selecting reliable technology partners, and providing comprehensive training to the team. This process can take between 3 to 6 months to complete.
• Selecting Revenue-Enhancing Services: Focus on services that generate substantial revenue, align with patient and payer needs, and address service gaps within the community to maximize revenue and optimize patient care.
• Managing the Billing Process Effectively: Assign appropriate CPT or HCPCS codes to services, employ Revenue Cycle Management (RCM) techniques, and ensure timely and accurate reimbursement.

Benefits of the Transition

• Expanded Clinical Roles: Pharmacists can now bill for more services, such as medication therapy management, immunizations, and comprehensive medication reviews.
• Improved Reimbursement: By adopting medical claims submission, pharmacies can secure fair and competitive reimbursements for their expanded clinical roles.
• Enhanced Patient Care: With medical claims submission, pharmacists can provide more comprehensive patient care by offering a wider range of services beyond just dispensing medications.

Challenges of the Transition

However, there are also some challenges to consider during the transition:

• Increased Complexity: Medical claims submission requires learning and using a new set of codes (CPT and HCPCS), which can be complex and time-consuming.
• Longer Reimbursement Timeline: Medical billing often takes longer for reimbursement, and claim denials can result in delays of weeks or even months.
• Need for Expertise: Pharmacists and staff must gain expertise in medical billing and claim management to ensure accurate reimbursement and avoid revenue loss.

The importance of billing step in pharmacy

Billing is an essential step in the pharmacy process, and it is important to understand how the revenue cycle works in a pharmacy to navigate the nuances of the pharmacy billing process and reimbursement.

The Billing Step

The billing step in the pharmacy process involves documenting information about patient discharge, physician changes, and patient and prescriber insurance and DEA numbers (Drug Enforcement Administration). This information is crucial if a client wants to file a medical claim. Pharmacy billing also entails creating invoices and sending out reassurances for order deliveries, which can be automated. This automation demonstrates concern for the patient, strengthening their loyalty and confidence in the pharmacy, thus contributing to more sales.

The Importance of the Billing Step

The billing step is important because it ensures that pharmacies are compensated for the time and resources spent on patient care. It also helps to streamline the revenue cycle management (RCM) process, preventing costly errors. If any information is entered incorrectly into the pharmacy system during the billing step, it can impact both clinical and revenue cycle outcomes. Therefore, it is crucial to have accurate and efficient billing processes in place to avoid delays in reimbursement and ensure proper payment for services rendered.

Challenges in Pharmacy Billing

One of the challenges in pharmacy billing is that pharmacists are not federally recognized as medical providers in the US. As a result, they must work within the legal system of their state and use CPT/ICD-10 codes for medical provider services when billing for clinical care. Additionally, changes in regulations and insurance policies can make it difficult to keep up with the latest billing requirements, leading to claim denials and revenue loss.

Benefits of Pharmacy Billing

Pharmacy billing simplifies the clinic's workflow by reducing the time spent on billing and allowing pharmacists to double-check for drug interactions, dosing, and appropriateness of therapy. It also enables eligible patients to use copay or free-trial cards to reduce their out-of-pocket costs.

In conclusion, the billing step in pharmacy is crucial for ensuring accurate reimbursement, maintaining patient satisfaction, and streamlining the revenue cycle management process. By understanding and efficiently managing the various stages of the pharmacy billing process, pharmacies can improve income outcomes and enhance patient care.

Differences between medical billing and pharmacy billing

Billing Format

Pharmacy billing involves sending a prescription to the pharmacy, which then bills the patient's drug insurance and dispenses the medicine to the patient or their provider's office. Only prescription numbers and National Drug Codes (NDC) are used for billing third-party payers for prescriptions. On the other hand, medical billing uses a different set of codes such as CPT and HCPCS. Thus, pharmacists need to be familiar with medical billing codes to bill the medical benefit of their patients' insurance plans.

Timeline for Reimbursement

The billing timeline for pharmacy billing is shorter compared to medical billing. Pharmacy benefits managers (PBM) usually deny or approve claims almost instantly. In contrast, billing for medical benefit claims can take up to 14 days, and resubmitting denied claims can take weeks or even months.

Claim Submission Complexity

Pharmacy claims are generally easier to submit and are often approved as long as a medication is prescribed by a physician and the drug is on the patient's insurance plan. On the other hand, billing for medical benefits involves navigating several medical billing policies and providing proper documentation, making the process more complex.

Profitability

Medical billing can be more profitable for providers' offices, but it also comes with additional administrative time and the cost of purchasing and storing medications. With medical billing, providers can keep the profits from the drugs and increase revenue by finding lower prices. However, it also adds financial risk due to the associated expenses and time commitments.

Ease of Submission

Pharmacy benefit claims are generally easier to submit and are often approved quickly if a physician prescribes the medication and it is on the patient's approved list. Medical benefit claims, on the other hand, require adherence to several medical billing policies and comprehensive documentation of the services provided.

Invoice Formatting

In addition to prescription numbers and NDCs, pharmacy billing may require indicator codes such as disease state or override codes. Medical billing, however, uses an entirely different set of codes, including CPT and HCPCS, which pharmacists must be familiar with to get paid for services under a patient's medical benefit plan.

Reimbursement Timescale

Medical billing claims generally take longer to be reimbursed. Pharmacy billing claims are typically approved or denied much faster, while medical billing claim status processing can take up to 14 business days. If a medical billing claim is denied, it must be resubmitted, which can result in weeks or months of delay in receiving payment.

Access to Rebates

The pharmacy benefit has better access to rebates, which are usually passed on to the plan sponsors. Consequently, pharmacy benefit rebates tend to be higher than those billed under a medical benefit.

Pros and cons of pharmacy billing

Pros of Pharmacy Billing

• Pharmacy billing simplifies the clinic's workflow.
• It allows eligible patients to use copay or free-trial cards to reduce their out-of-pocket costs.
• It saves the clinic time by handling the billing for the medications. Most specialty pharmacies have staff who will complete prior authorisations on the provider's behalf.
• It allows the pharmacist to double-check for drug interactions, dosing and 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 because most of these medications have special storage requirements, like refrigeration, and the patient receives the medication and stores it at home.
• It increases the risk of waste because the medicine must be discarded if it was already dispensed and the patient then requires a therapy or dose change.

Frequently asked questions