Pharmacies today are home to various financial challenges that result from their limited role, rising medication cost, complex contracts with insurance providers and ever-evolving regulatory policies that tend to work in favor of the patients. They often face cost pressures that impact their revenue cycle management. While focusing on various aspects of running a pharmacy and trying to steer traditional profits in the process; a pharmacist might overlook the importance of recouping the maximum on insurance reimbursement claims. Stabilizing the cost and obtaining fair margins are important for revolutionizing the pharmacy reimbursement system. Most pharmacies are marred by reduction in reimbursements due to the inflation of generic drugs. However, here is an exhaustive list of ways through which a pharmacy can shoot up the reimbursements they get for medications they dispense:
Keep a Check on U & C Price Points
It is common knowledge that payers often neglect updating their pricing as often as wholesalers or pharmacies do. Hence, there are chances that they are paying reimbursements based on older pricing that is outdated. With the help of technology fortify your pharmacy management software to point out such discrepancies. It should highlight all the payments that were paid at Usual and Customary (U & C), implying that you were paid in full.
Be Accurate With DAW Claim Codes
Dispense as Written Codes (DAW) are of importance in dispensing prescriptions in a pharmacy. These are simple codes comprising of one or two digit that indicate important information to the pharmacist. These Dispense as Written codes were introduced to formulate a standard method of denoting why a pharmacist used or did not use a certain brand of drug. In the view of availability of similar drugs from multiple wholesale companies and other sources, these DAW Codes help attain a level of transparency, clearly indicating why a drug is being dispensed over other similar options. These codes help medical insurance companies and pharmacy benefit managers in organizing claims and determine prescription coverage. Being inattentive with DAW codes can negatively affect the profitability and efficiency of your pharmacy; as the reimbursements will be inaccurate. In these cases the pharmacy will also lose time over claim re submission and may invite a pharmacy audit.
Update AWP Information
The reimbursements made by Insurance companies to pharmacies are most generally based on the average wholesale price (AWP). However, these third party payers seldom have the most up-to-date AWP prices loaded in their system when you bill. This can be a major reason of discrepancy in third-party reimbursement and needs to be carefully monitored. Pharmacy owners need to make sure that their software is updated daily and with the latest pricing information.
Track Reimbursement Compliance
It is a trend that when a drug manufacturer raises the price for its medications, pharmacy benefit managers (PBMs) and payers are slow in updating the maximum allowable cost (MAC). The result is that pharmacies are reimbursed at a very less acquisition cost. On the other hand when the cost of the drug goes down, PBMs are quick to update the MAC list, to over-reimbursing their pharmacies at all costs. It is thus important for pharmacies to track compliance of reimbursements from PBMs for patients that have been served. It is important that they are reimbursed at the correct contract rates. Best strategy would be to compare the reimbursements that pharmacies get from various payers and PBMs against Maximum Allowable Cost (MAC) levels. By employing the right analytical solution, this can be done right.
Focus On Favorable Contracts
They key to increasing pharmacy reimbursements is putting all the information in one place to compare. By linking together contracts against plans and patient medication adherence, pharmacy can generate valuable big data about contracts based on volume, adherence patterns, PBM compliance behavior and other factors. This knowledge provides full picture of the health of the pharmacy business and its performance. Pharmacies can then enter negotiations with PBMs and insurance providers with refurbished ability to enter into favorable contracts terms in future.