Pharmacy Billing Facts you Need to Know



Pharmacy billing encompasses a huge array of facts to understand prior to billing. Like all other specialties, pharmacy comes with its own set of problems associated with reimbursement and profitability. To add to the existing woes, reimbursement requires handling of data at multiple levels along with a constant follow up in most cases, posing challenges. Although pharmacy claims are distinct from those of a hospital, they are still subjected to HIPPA rules.

Following are few billing facts about Pharmacy that you need to be aware of-

  • The first step is signing up with the NCPDP, service that allows Pharmacies to bill. A unique number is provided by the NCPDP to each pharmacy which it identifies for billing.
  • Every insurance company has a third party- a Pharmacy Benefit Manager (PBM). These intermediaries are billed on filing a prescription and they audit to ensure everything is appropriate.
  • Signing a contract is an essential part however, you must understand and read through well prior to signing any such contracts. Realizing allowable and payable charges is important for a successful billing cycle.
  • A pharmacy will not be able to bill to a PBM unless it has signed a contract which entitles the payment to be paid to the pharmacy, co-pays etc. Every PBM has different contracts.
  • Technology is an inevitable part and for pharmacy too, billing is made through billing software such as QS1. Most of the processes are automated in the billing process, however there may be some cases needing prior approval and specific billing. For these, it is necessary to verify with an insurance company if the drug is reimbursable.
  • On receiving a prescription by the community pharmacy, it is important to note the source the prescription to understand if it is for a Medicaid or Medicare patient. This is tracked using origin codes which are as below-

0- Unknown is used when the way in which the original prescription was received is not known, which may be the case in a transferred prescription.

1- Written prescription via paper, which comprises of computer printed prescriptions that a physician signs as well as tradition prescription forms.

2- Telephone prescription obtained through oral instruction or interactive voice response.

3- E-prescriptions transferred from a computer to the pharmacy.

4- Facsimile prescription obtained through fax transmission, including an e-Fax where a scanned image is sent to the pharmacy, and displayed on a screen.

Pharmacy billing can get simpler once all facts are known and desired methodologies adopted for a smooth billing cycle. This eventually impacts the bottom line of the Pharmacy, ensuring faster and better reimbursements.

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