Financial Issues

1. Financial Issues Chapter 14

2. Financial issues • In 1985, the average prescription price was $10. By 2006 the average price approached $70. • The increase is due in part from inflation, the aging population, and new medicines that enhance the quality of health care.

3. Third Party Payments • Third party programs are another party besides the patient or the pharmacy that pays for some or all the cost of medication, the insurer. • Basic health insurance, Medicaid, Medicare, or HMOs

4. Pharmacy Tech and the Prescription Process • The pharmacy tech must understand the different types of health insurance and how drug benefits differ among programs. • Insurance policies may limit the quantity of medication dispensed, the number of refills, and generic substitutions may be required, etc.

5. Computers and Third Party Billing • Most insurance claims are now filed electronically by online claim submission and online adjudication of claims. • This process benefits both the pharmacy and third party programs because of improved accuracy and control of claims. It is also much faster and more direct than processing paper claims.

6. Co-Pays • This is an agreement between the insurer and the insured to share the cost of the prescription. The patient must pay a portion of the price of the medication and insurance company is billed for the remainder. Will pay the usual and customary amount depending on geographical location. • Some have duel co-pays, which means that a lower co-pay applies to prescriptions filled with generic drugs and a higher co-pay applies to prescriptions filled with brand name drugs that have no generic equivalent.

7. Third Party Programs • Traditional (private) health insurance policies have the added benefit of prescription drug coverage. • Prescription drug benefit cards – card that contains third party billing information for prescription purchases.

8. Managed Care Programs • Health maintenance organizations (HMOs) • Unlike traditional health coverage, an HMO sets guidelines under which doctors can operate. Health care coverage through the use of an HMO costs less than traditional health insurance, with limitations on the range of treatments available. • Preferred provider organizations (PPOs) • A PPO is a group of doctors and/or hospitals that provides medical service only to a specific group or association. • Point-of-service programs (POS) • combines characteristics of the HMO and the PPO.

9. Public Health Insurance • Medicare – a federal program that covers people over the age of 65, disabled people under the age of 65, and people with kidney failure. • May purchase a Prescription Drug Plan and pay a monthly fee. • Some people covered by Medicare have no prescription coverage.

10. Public Health Insurance • Medicaid is a federal-state program. State welfare department usually operate Medicaid. Each state decides who is eligible for benefits and what services will be covered. • Prescription drug formularies are determined by each state.

11. Other Programs • Workers’ Compensation • Compensation for employees accidentally injured on-the-job. • Patient Assistance Programs • Offered by some pharmaceutical manufacturers to help needy patients who require medication that they cannot afford and do not have insurance.

12. Online Adjudication • In online adjudication, the technician uses the computer to determine the exact coverage for each prescription. • The Online Process • Obtain information from the patient: prescription, billing information, and personal information. • This information is entered in the computer and is transmitted to the insurer. • After an online response is received (paid, not paid, co-pay amount) the pharmacy tech prints a label and gives the okay to process the prescription. • Pharmacies must keep records to verify that the prescription was filled and dispensed.

13. Online Claim Information • Information required for online processing • Cardholder ID number • Group number • Name of patient • Birth date • Sex • Relationship to cardholder • Date Rx is written • Date Rx is dispensed

14. Online Claim Information • National drug code (NDC) of drug • Dispense as written (DAW) indication • Amount or quantity dispensed • Is this a new or refill • Days supply • ID number of prescriber • National Provider Identifier (pharmacy ID) • Medication cost • Dispensing fee • Total price • Deductible or co-pay amount

15. Rejected Claims • In the online adjudication process, the insurer sometimes rejects the claim, • Usually rejected can be resolved by the pharmacy tech either by reviewing the claim for errors, speaking with the prescriber, or the insurer.

16. Common reasons for third party rejected claims • Dependent coverage expired • Invalid birth date • Invalid person code • Invalid sex • Prescriber not part of network • Unable to connect with insurer’s computer • Coverage is terminated • Refill is to soon • Refills not covered • NDC not covered

17. Other Billing Procedures • Paper Claims – universal claim form. • In-House Billing procedures – example elderly with legal custodian filling prescriptions. • Disease State management Service --IDDM, asthma, hypertension • Medication Therapy Management Services – Medicare benefit