Top Pharmacy Billing Guidelines

March 14, 2016

Top Pharmacy Billing Guidelines

There are certain Billing Guidelines that all pharmacies across all states must follow:

The Basics Compliances

  • A pharmacy needs to sign up with NCPDP, a database service that allows it to bill. NCPDP provides each pharmacy with a unique number that identifies it for billing purposes.
  • Pharmacies are required to use the HIPAA compliant National Council for Prescription Drugs Program (NCPDP)
  • A pharmacy can't bill to a Pharmacy Benefit Manager (PBM) unless it has signed a contract. That contract designates how much the PBM pays to the pharmacy, the co-pays, etc. Each PBM has different contracts. Further, a pharmacy cannot bill claims to any third party with which it has not signed a contract.
  • Every pharmacy is responsible for determining compliance with ordering guidelines - a medication order that contains the patient name; age and weight; date and time of the order; drug name; dose, frequency, name of prescriber; and where applicable, the exact strength/concentration, quantity/duration, and other specific instructions for use.

Medicare Compliance

  • Medicare Compliance-
    which prescriptions are covered by Medicare medical benefits (Part A and Part B) and Medicare's prescription drug benefit (Part D) should be assessed. Coverage is dependent on multiple factors – as some drug categories are never covered by Medicare under any of its plans. Pharmacies need to recognize the drugs that may be covered under either benefit and understand why in order to submit the claim effectively & avert financial and satisfaction issues
  • Administration of drugs:
    Drugs that patients can administer on their own, such as insulin, can be billed by the pharmacy to Medicare Part D. However, drugs that must be administered by a physician or health care professional are considered "incident to a physician's service," meaning they must be purchased by the physician and then supplied to the patient. Medicare will not reimburse pharmacies that dispense such drugs to a patient who must take it to their physician for administration.
  • DME Drugs:
    For a pharmacy to file claims for DME drugs under Part B, it must be through a participating DME provider in the Medicare Part B program or a provider with the Medicare Part B DME Regional Carrier

Basic Billing Processes & Claims for easier billing-

  • Submission of Claims: All pharmacy claims to be submitted electronically through the Point of Sale system (POS). If a pharmacy needs to submit a claim on paper, it must use the Universal Claim Form when requesting payment for drugs and pharmaceutical products authorized under by the insurer. If not, the claim may be returned.
  • Verification: Every pharmacy must perform on-line duplicate services detection and drug caps. Verification of coverage of the drug due to formulary restrictions, DESI status, obsolete dates and rebate closures must be conducted. Besides, pharmacies must also perform Provider Prospective DUR, and detection of conflicts prior to filling the prescriptions.
  • Reconciliation:
    Reconciling the total drugs administered to the patient against the total drugs billed should be reviewed. Any kind of charge variance noted should be promptly taken up and the discrepancy determined.
  • Documentation of Drug administration:
    Key elements like quantity, administration date, administration intervals, start and stop times, and prescriber information should always be monitored. Periodical reviews of drug administration should be conducted.
  • Assessments of Claim Denial:
    Assessment of denials and corrected claims for reasonableness of volumes and evaluating the effectiveness of pre-billing edits should be conducted periodically.

An internal Audit that reviews the revenue cycle is critical, more so when the multi-disciplinary responsibilities stretch across from pharmacists, pharmacy buyers, coding, billing, to patient financial services. Internal audits help reduce the potential billing errors in Pharmacy Billing and provide better ways to improve revenues.


Category : Best Billing and Coding Practices