Pharmacy Billing and Reimbursements: 7 Things You Should Know

Pharmacy Billing and Reimbursements

If you’re a physician with multiple offices, dispensing medications directly from your practice is a worthwhile option to consider. It can provide your medical business with an additional revenue source while offering a welcome convenience to your patients.

Health-care is a fast-changing environment and involvement with dispensing can get complicated. To pursue dispensing medication as a part of your practice, it is necessary to understand the processes involved. It also helps to familiarize yourself with any options that will simplify this endeavor.

Let’s look at 7 considerations regarding billing and reimbursement for this aspect of your practice.

1. Being Informed on Drug Prices

Drug prices are subject to similar market forces as any product. However, with medication, there are a few corridors via which they can be procured at lower prices. For example, hospitals can often buy drugs at more expensive prices than they are being paid by fixed-fee payers. Opportunities for cheaper generic alternatives are often not even considered. By having a way to regularly conduct price research and compare drug spending to reimbursement, you can achieve economies of scale.

2. Optimal Data Workflow

Knowing about pharmacy billing and how pharmacies balance their revenue and expenses is vital to keeping your dispensing program sustainable and open to growth. Starting with procurement to inventory, then storage and dispensing and finally closing of the revenue cycle with billing and reimbursement, you need to make sure that the process is controlled and monitored. All information must be entered correctly from the start to avoid time-consuming and costly errors.

3. Compliance, Rules and Regulations

The healthcare field and especially anything involving medication is a volatile space in terms of legality and standards. Failing to remain up-to-date with the ever-changing drug-related CMS regulations can place you at risk of finding your practice as non-compliant or missing reimbursement. In order to avoid this, pharmacies must follow the Current Procedural Terminology (CPT) codes assigned for the pharmacists performing Medication Therapy Management (MTM). It is important that pharmacies include the NPI as well as the prescriber’s NPI on all the claims.

4. Procurement

Procurement is the stage where information goes from referring to purchased quantities and pricing to denoting storage units of measure (UoM) and inventory costs. In most cases, data is entered manually. Figures uploaded from the wholesale distributor to the pharmacy’s system are also checked manually to avoid errors. This is done because the data transfer is a potential source of mistakes that can lead to proper revenue cycle management.

5. The Charge Master

The charge master, otherwise known as the pharmacy charge description master, is a main component of the medication revenue cycle. It is the starting point for the billing of patients and payers and is basically a list of the billable items to a patient or health insurance provider.

Proper attention needs to be given to this end as revenue loss can occur when separately reimbursable medications are miscoded or omitted in the charge master. The key is converting pharmaceutical quantities from purchased amounts to patient-administered quantities. Only at this stage should they be made billable to avoid conflating dosage amounts required for patients with amounts purchased. A good billing service can help you avoid costly errors and save time in the transfer of information.

6. Coding

A further point of attention to avoid costly errors is coding. Drugs need to have the appropriate HCPCS coding and be represented correctly in the charge master. Failure to have this done properly can lead to the pharmacy not receiving reimbursement.

7. Linkages Between Purchases and Billing

Hospitals may have different processes for the ordering, administering and reimbursement processing of drugs. Pharmacies can be called upon to reconcile the linkage between expenditures for drugs and the charge master, creating the potential for improper reimbursement. Having a system in place that simplifies the whole process can be a godsend for your medication dispensing operation.

Your patients will feel more comfortable getting their medication directly from their physician. Not only will it save them a trip to the pharmacy, but they can also rest assured that any questions they have about their medication will be answered to the fullest. By adhering to best pharmacy billing and reimbursement practices, you can make this part of your practice efficient, profitable and a selling point for your offices.

Simplifying Your Practice’s Medication Dispensing

Safeguarding your medical practice’s dispensing operation from the complexities that the healthcare system inherently possesses is key to your office’s viability. Advanced RX can make medication dispensing simple and help steer you clear of the complications of the system that can impact your bottom line.

Enhance the revenue and value of your pharmacy today with Advanced Rx.