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Pharmacy Medical Billing 101: What is It and How to Master Your Pharmacy’s Revenue Cycle Management
Pharmacy Medical Billing 101: What is It and How to Master Your Pharmacy’s Revenue Cycle Management
By: Mick Polo | Read Time: 7 minutes
Nearly 9/10 Americans live in a 5 mile radius of a community pharmacy, making pharmacists some of the most easily accessible healthcare professionals.
Pharmacists can often be the go-to first contact for patients seeking medical services, help, and advice, especially in more rural locations. A key part of the medical process, physicians are imperative to providing advice about prescriptions and medications that ensure safe use while increasing in care-type services as well.
However, there are many pharmacy billing challenges that arise from the heightened role pharmacies have taken on in their communities. Between issues like regulatory changes, denials, and an increase of pharmacists providing clinical care services, pharmacy medical billing can be very complex.
NCDS Medical Billing knows how to expertly navigate that complexity. Read on for pharmacy medical billing clarity.
Pharmacy Medical Billing
As of May 11 2022, retail pharmacies across the United States have administered over 248.8 million doses of the COVID-19 vaccine, and are a critical part of the COVID-19 vaccination efforts.
The federal government recognizes the accessibility that pharmacies provide to American citizens. With the increasing level of responsibilities for pharmacies, understanding pharmacy medical billing is more important than ever.
How Immunization Clinics and Pharmacies are Different from Other Healthcare Organizations
While other healthcare providers primarily are focused on providing care and diagnosis, immunization clinics and pharmacies are traditionally focused on providing immunizations and prescriptions.
A pharmacist’s primary job involves prescriptions, with duties such as:
- Follow prescription instructions written by a physician
- Dispense type and dosage of medication identified by the prescription
- Inform and educate patients of how to properly take their prescriptions
A pharmacist wears many hats in the community, as shown below.
However, with the scope of practice and responsibilities expanding in recent years, pharmacists are taking on more medical responsibilities outside of the traditional pharmacist role.
Infographic about typical pharmacist responsibilities by pharmacist Ravi Morisetty
Medical Billing Versus Immunization Clinics and Pharmacy Billing - What's the Difference?
Medical billing and immunization clinic and pharmacy billing have key differences that are necessary to learn to ensure your organization is compensated where pay is due and that revenue cycle management is efficient.
Differences in Ease of Submission
Pharmacy claims are typically easier to submit than medical billing claims.
Pharmacy Billing
Typically, pharmacies encounter relative ease when submitting prescription claims to the pharmacy benefit manager (PBM). Provided the medication was prescribed by a physician and the drug is officially listed on the patient’s insurance plan, pharmacy claims are typically approved.
Medical Billing
Varying medical billing policies often lead to a more complicated process than pharmacy billing. Providing all the necessary and accurate documentation of the service is a key aspect of medical billing, but can often be overlooked. A medical billing solution helps avoid denials rejections, which incur large costs.
Formatting Differences
Pharmacists attempting to complete the medical billing process will immediately notice some key differences in formatting.
Pharmacy Billing
Pharmacists billing third-parties for prescriptions relies particularly on National Drug Codes and prescription numbers.
Medical Billing
Medical billing has a whole new set of codes. Medical billing coding has a particular system called the Healthcare Common Procedure Coding System (HCPCS) and Current Procedural Terminology (CPT). A knowledge of these codes is vital to properly completing the medical billing process.
NCDS SOLUTION: Using our clearinghouse solutions powered by Change Healthcare, we stay up to date with all the current ANSI X12 standards so claims are processed accurately and timely with no technical errors or issues to interrupt reimbursement.
Time Until Reimbursement
Pharmacists working through medical billing will also note a different timing in reimbursements.
Pharmacy Billing
Prescription billing is typically denied or approved almost instantaneously through a PBM.
Medical Billing
Medical billing has a longer wait time for payment, which can extend even longer if a claim is denied and needs a resubmission. In those cases, it can take up to months to be repaid for services, echoing the importance of accurately submitting claims the first time around.
NCDS SOLUTION: Our aging process by payer contract flags claims for follow up as soon as they are past due per the exact insurance contract reimbursement terms, avoiding unnecessary delays and cash flow interruptions caused by following traditional 30-60-90 day aging rules.
Increased Demand for Immunization Clinics and Pharmacy Medical Billing Services
Pharmacy revenue has steadily grown between 2009 and 2021, with a $20 billion jump between 2020 and 2021. As pharmacy industry revenue grows and capabilities expand, pharmacy medical billing complexity increases.
Pharmacy revenue in billion USD according to Statista
During the 2009 H1N1 outbreak, pharmacists played a major role in the medical response as mass immunizers.
This role has exponentially increased as a result of the COVID-19 outbreak impact, as pharmacists have taken on more of an active caregiver role.
Columbia University research indicates that the role of the pharmacist is expanding and predicts that by 2030, a majority of pharmacists will see a transition from transactional care to more direct patient care responsibilities.
Findings from Columbia University Mailman School of Public Health
With these increased roles and responsibilities, pharmacy medical billing services continue to rise in demand.
While pharmacists' roles have been evolving to include more clinical care focused work, medical billing for pharmacies is one challenge that pharmacists can outsource to save mental energy, costs, and resources.
Why Experience and Expertise Is a Necessity in Immunization Clinics and Pharmacy Medical Billing
Pharmacists have a uniquely strong position to help members of their community with preventative care and disease management.
Not only are pharmacists some of the most accessible healthcare providers, but they are respected by their communities. The majority of respondents in a Columbia University Mailman School of Public Health were at least somewhat comfortable with pharmacists performing key clinical activities.
Survey results from Columbia University Mailman School of Public Health
That same survey identified that the public has high degrees of trust in pharmacists, even outside of traditional “pharmacist” roles including health screenings and additional health support services.
Survey results from Columbia University Mailman School of Public Health
However, on top of growing expertise in providing medical care, pharmacists also need to build expertise in medical billing and medical claim management.
Medical Billing Helps Confirm Pharmacies are Paid in Full
Improper medical billing expertise can ultimately lead to a loss in revenue.
The pharmacist in charge needs proper medical billing expertise to guarantee that they get accurately paid for the new services that they’re providing. There are major differences in the medical billing process between pharmacy and medical billing, and this expertise can’t be skimped on.
Between confirming insurance coverage with insurance companies, accurately inputting information, avoiding unnecessary claim denials, following up on delayed or missing payments, and learning medical billing coding for starters, any pharmacist needs to ensure that they’re following every medical billing step properly to ensure correct payment.
Challenges in Pharmacy Medical Billing
For pharmacists leveling up in their medical care services, a new set of challenges are presented with medical billing.
Regulatory Changes
Changes in the healthcare industry happen regularly. Because of these regular updates, medical billing and coding staff often may need to be regularly trained with specialized skills. This staff must be frequently updated on medical billing coding, best practices, and policies for both pharmacy and medical billing. Additionally, the team needs to ensure to stay on top of recent government rules, local laws, and codes.
NCDS SOLUTION: Our Insurance Credentialing and Enrollment team will help you navigate these complex regulations and manage the application process to ensure your organization is set up properly with each carrier to eliminate administrative issues that can prevent payment.
Claim Denials
Claim denials are a challenge for anyone in healthcare services. Denials ultimately lead to revenue loss and decreases in pharmacy cash flow. Many denials are avoidable with the right expertise.
NCDS SOLUTION: According to the American Academy of Family Physicians, with the cost of rebilling a claim at $25 or more, the practice of reviewing denied claims needs to be efficient. NCDS uses a priority RMT (Receivables Management Task) system to identify, prioritize, track, and analyze denials to optimize the efforts of billing teams and produce the best results.
Insurance Coverage
Teams leading pharmacy medical billing may not always have complete awareness of the various insurance coverages for the many services, treatments, drugs, and injections offered. Experts need to assess these various items to determine whether they are to be included in medical billing. Patient eligibility is a key step in the pharmacy medical billing process.
NCDS SOLUTION: We offer tools for verifying insurance eligibility digitally through a realtime fully integrated API. Insurance eligibility is also available to you through the NCDS Client Logins. In addition, we offer outsourced Verification Of Benefits and Claim Prior Authorization services to help you streamline these front line processes, save time for your staff and customers, reduce denials, and improve your rate of return.
Doing Pharmacy Medical Billing Alone
Pharmacy medical billing is complex - but NCDS, a premier medical billing company, is here to simplify the process and maximize opportunities to grow the revenue for either your immunization clinic or pharmacy.
Contact NCDS Medical Billing to discuss the billing needs of your immunization clinic or pharmacy.
Questions?
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