Monday, January 30, 2023

Top Pharmacy Billing Guidelines

Must read

The importance of pharmacy billing services in healthcare cannot be overstated. Pharmaceutical companies have several billing issues common to other healthcare billing specialties. The fact that some medications and injections are not covered by insurance makes pharmacy billing even more complicated. Therefore, in-depth professional knowledge is required to determine whether incorporating or removing pharmaceuticals from the pharmacy billing procedure is most effective. Therefore, pharmacy billing services are essential to providing patients with quality care.

What is pharmacy billing?

When a prescription is sent to the pharmacy, the pharmacy bills the patient’s drug insurance and dispenses the medication directly to the patient or the provider’s office, this process is known as pharmacy billing.

When is pharmacy billing appropriate?

The drug will be given to patients in the doctor’s office once they pay any necessary copays and obtain it. To find a specialized pharmacy that can handle the complexity of these medications, it is best to use pharmacy billing. A specialty pharmacy should have URAC certification.

Pharmacy billing can be done in two ways: brown bagging and white bagging.

Brown bagging is the practice of the patient picking up or receiving the medication by mail and delivering it to the provider’s office for administration after the pharmacy bills for it and receives payment.

White bagging sends a prescription directly to the clinician’s office or another administration location rather than to the patient. The provider delivers the medicine to the pharmacist, who bills the medication and collects payment.

Drug pricing and cost management

The US pharmaceutical reimbursement system has many facets and offers different prices for various customers. Medicine corporations are free to set whatever sticker price they see fit because drug costs are not directly regulated in the US.

Medicare, which provides insurance to Americans over 65 and is the pharmaceutical industry’s largest single client, does not receive the statutory discount Medicaid, the federal program to pay the medical expenditures of low-income individuals, accepts.

Many Americans who do not have access to Medicare or Medicaid are covered by the private insurance system, which is fragmented into hundreds of different businesses and insurance providers, making it difficult for them to negotiate significant savings.

Following pharmacy billing guidelines is essential to a seamless, error-free billing procedure. All pharmacies must follow the following billing guidelines in all states:

The Fundamental Compliances

To be able to bill, a pharmacy needs to register with NCPDP, a database service. Each pharmacy receives a unique identification number from NCPDP as its billing identification.

Each pharmacy is in charge of monitoring adherence to the ordering standards, which call for medication orders to include the patient’s name, drug name, dose, age, weight, date and time of the order, frequency, name of the prescribing physician, and other detailed usage instructions.

Unless a contract has been executed, a pharmacy cannot bill a pharmaceutical benefits manager. The PBM’s payment to the pharmacy is specified in that contract. Additionally, a pharmacy is prohibited from billing any third party with whom it has not agreed.

Pharmacies must use the HIPAA-compliant National Council for Prescription Drugs Program.

Simple billing procedures and claim submission for faster billing: All pharmacy claims must be submitted electronically using the Point of Sale system. When a pharmacy files a paper claim, it must use the Universal Claim Form to get paid for the medications and pharmaceuticals the insurer has allowed. The claim might be refunded if not.

Reconciliation: It is essential to check the total number of medications billed and administered to the patient.

Assessments of Claim Denial: Periodically, denials and corrected claims should be assessed for the reasonableness of quantities and the efficacy of pre-billing changes.

Verification: It is necessary to check the drug’s coverage in light of formulary restrictions, DESI status, out-of-date dates, and rebate closures. Additionally, before filling prescriptions, pharmacies must complete Provider Prospective DUR and conflict detection.

The need for an internal audit that examines the revenue cycle is considerably more significant when it involves multidisciplinary tasks involving pharmacists, pharmacy purchasers, coding, billing, and patient financial services. Internal audits offer better solutions to increase revenues and decrease potential billing problems in pharmacy billing.

Medicare Compatibility

Drug administration: The pharmacist may submit a Medicare Part D claim for medications that patients can administer on their own, such as insulin. However, drugs that a doctor or other healthcare provider must help with are regarded as “incident to a physician’s service,” which means the doctor must buy the drugs before giving them to the patient.

Drug administration documentation should include essential details such as dosage, administration date, intervals, start and stop times, and prescriber information.

Medicare compliance should be evaluated, including which drugs are covered under Medicare’s medical and prescription drug benefits. To submit the claim correctly and avoid financial and satisfaction concerns, pharmacies must know the products that may be covered under either use and understand why.

DME Medications: A participating DME provider in the Medicare Part B program or a provider with the Medicare Part B DME Regional Carrier is required for a pharmacy to submit claims for DME drugs under Part B.

For billing pharmacist patient care services, there are numerous options. 

1. Recoveries based on contracts

Pharmacists or pharmacies may be compensated following agreements with payers or through contracts for professional services with or between providers. These agreements currently need more standardization. Payment options include fee-for-service, capitation, global rates, and other similar arrangements.

2.” Incident-to” billing

Pharmacist services may be provided in various patient care settings, such as a doctor’s office or clinic. “Incident to” billing, when the practitioner bills for the pharmacist’s services, is a typical billing strategy in these settings. The billing company collects money and pays the pharmacist back.

3. Paying patients directly

Pharmacists can charge patients directly through cash transactions for their services. The pharmacy or pharmacist determines the pricing structure. Patients may be provided with documentation to pursue potential reimbursement through their health plan or a flexible benefits program after paying out-of-pocket for the service.

4. Using procedure codes when billing

The HCPCS and Level I American Medical Association CPT® codes contain procedure codes. The accepted HCPCS/CPT®, diagnosis (ICD-10), and other regulations for reimbursement may be specified in the payer contract. Practices, where pharmacists are part of the patient care team or function in that capacity, have access to the most recent payment coding and billing techniques.

5. Payment formats

Depending on the billing mechanisms, pharmacy patient care services can be billed in various ways. The benefit being billed is often identified using CPT® codes. The invoicing format, however, can be either X12N 837 or NCPDP Telecommunication Standard, depending on the trading partner agreement. Implementing the current NCPDP Telecommunication Standard offers many pharmacies a cost-effective alternative for administratively simplifying the pharmacy billing process.

Since Medicare now counts physicians among the healthcare providers who can give patients services and charge directly, using specific codes when invoicing for pharmacy services is crucial for increasing revenues. Knowing the intricacies of billing is a significant benefit that can help a pharmacy develop a Revenue Cycle Management (RCM) approach that is successful and efficient. Outsourcing pharmacy billing services can help focus on improving patient health while operating as a retailer or from a hospital location, which will lower administrative and operational costs.

Medication errors and safety

Drug mistakes can cause serious harm, incapacity, or even death when inadequate medication systems and human factors like exhaustion, unfavorable working circumstances, or a lack of employees impact prescribing, transcribing, dispensing, administering, and monitoring practices.

The entire system for using medications is susceptible to medication mistakes. For instance, writing a prescription, putting data into a computer system, preparing or dispensing the drug, or giving or administering it to a patient.

Attempting to find solutions to lessen medication errors

The US Food and Drug Administration works for solutions to avoid drug mistakes. The FDA examines the medicine name, labeling, packaging, and product design before pharmaceuticals are approved for marketing to find and correct information that could lead to medication errors.

Pharmacy inspections and quality control

An objective, systematic audit of pharmaceutical quality will determine whether the operations carried out by your business comply with industry standards. Additionally, you’ll check to see if they’re used efficiently to accomplish the specified goals.

Different Forms of Audits in the Pharmaceutical Sector

Pharmaceutical companies typically encounter three different categories of quality audits:

  • internal audits
  • external audits
  • unexpected audits

Internal Audits – These audits are carried out regularly, so you must have policies and plans for carrying them out.

Outside audits – Second- and third-party audits are other names for external audits.

Second-Party Audits

Third parties interested in the audited company carry out second-party audits.

They might serve as both suppliers and customers.

Third-Party Audits

External, impartial groups like notified bodies or agencies perform third-party audits.

Unannounced Audits

Regulatory organizations periodically conduct unannounced audits of pharmaceutical product manufacturers. Your third-party vendors, who provide essential raw ingredients for your products, may also be subject to such audits.

More articles

I am a medical biller, a blogger and have 20 years of experience in medical billing, medical billing management, and medical assistant. My background includes positions as a clinical medical assistant, medical records technician, medical office manager, biller, and coder. I am certified by the American Academy of Professional Coders (AAPC) as a Certified Professional Coder (CPC) and by the Practice Management Institute (PMI) as a Certified Medical Office Manager (CMOM). As an office manager/biller/coder, I was a member of the Michigan Medical Group Managers, Michigan Medical Billers Association. I also served as a committee member of the Michigan Osteopathic Association of Practice Managers Education Committee.

Latest article