By: Vicki Nahorn, Operations Manager, Net-Rx
When it comes to optimizing prescription claim billing with third party
payers and PBMs, effective use of both pre edit and post edit solutions can
improve pharmacy revenue. Understanding correct billing and coding procedures
for prescriptions continues to become more and more complex. Being vigilant in
understanding claim coding and using accurate data is now more important as
ever. Pharmacies work hard to earn
their revenue. Pre edit, post edit, and effective reporting can help pharmacies
spend less effort on getting paid for what they’ve already earned, and more
time focusing on how to grow the business.
In this article, we will discuss how having both a pre and post edit solution can help you to develop
financial discipline and improve workflow while you navigate the complexities
of this ever-changing prescription billing landscape full of DIR fees, SCCs, changing AWPs, and formulary requirements, to name a few.
What if you could identify and fix errors prior to adjudicating the
claim? When claims are processed through the Script-IQ® pre edit solution, they
are processed through a rules-based engine that checks for errors originating
from either the user or from the pharmacy system configuration. If an error is
found the pre edit will either adjust the claim based on how the pharmacy has
configured the edit or send messaging back to the pharmacy with suggestions on
what data elements in the claim need further evaluation. Catching and resolving
errors before the PBM or payor adjudicates the claim can have the following
impacts:
- Reduced transaction fees - When you can identify
and resolve claims data errors before initiating transmission to the switch
with the Script-IQ pre edit solution, you reduce subsequent transaction fees associated
with transmitting a claim multiple times.
- Fewer workflow interruptions - As one example, changes
to a drug’s average wholesale price (AWP) is a common error not typically
caught early on. A pre edit service can correct the AWP real time, allowing for
correct reimbursement with no intervention needed. Conversely, a post edit will
report the non-matched AWP so you can update data in your dispensing software, thus
all subsequent claims for that NDC, not transmitting to a third party, such as
cash claims are priced based on the most current AWP.
- Cash-flow optimization – Utilizing a pre edit can
reduce the need to reverse paid claims to make corrections and then rebill
which can delay the ultimate payment of your claim by weeks or even months.
- Audit assistance - A pre edit solution could
help to identify coding errors, such as the dispense quantity for packaged
items. Submitting correct coding may reduce your risk of being audited and
reduce time spent researching when you are audited. A quality pre edit may even
help improve the positive outcome of those audits.
- Time to grow your business – The claim quality
check offered by a pre edit solution allows you to focus on the growth of your
business, rather than monitoring of claims. By reducing the possibility for
errors and confusion in the billing process, managers can spend more time on
increasing value rather than capturing value that’s already been earned.
While both pre and post
edit services on the surface can appear duplicative, having both in your toolbox
can bring great benefits. Moving eligible claim edits upstream, reduces the
need for post adjudication activities such as reversing and rebilling to chase
after nickels and dimes by capturing those coins up front in the process and
thus improving both workflow and cash flow. However, not all errors can be identified
by a pre edit solution as they need the payer responses to perform a complete
evaluation. This is where a post edit solution like EditRx steps in. Using an effective suite of post edit reports
can provide the following benefits:
- Identify and fix data errors – post edit reports
help you identify when incorrect data has been utilized by either your claims
dispensing software or in the PBM’s software to communicate specific things
about that claim that can impact reimbursement. Those anomalies can result in
lower reimbursement rates in already narrowing profit margins for pharmacies (Issues In Pharmaceutical Reimbursement, n.d.). Override codes,
drug classifications, pricing calculations, NDC selection, MAC application, LTC
designations, and many more areas are evaluated by post editing services
ensuring the codes submitted were interpreted and therefore paid correctly by
the payer. Consider a post edit as your
“audit” of the payer.
- Manage pricing strategies – post edit reports
help identify claims paid at the usual and customary (U&C) rate, otherwise
known as the cash price. Most contracts with third party payers state that the reimbursement
amount will be determined based on the lowest of these three pricing matrices;
AWP - x% + Dispensing Fee, Maximum Allowable Cost (MAC) + Dispensing Fee or
U&C, whichever is less. When a pharmacy is reimbursed at the
U&C rate, it means the payer was most likely willing to pay more (The Art of the Claw-Back, 2016). Having insight into
these claims allows you to make informed decisions on defining cash prices.
- Identify claims paid at a loss – post edit
reports identify claims reimbursed at a rate lower than the cost of the drug.
The pharmacy staff can use this information when making purchasing decisions.
Some NDCs may be less expensive depending on the brand and quantity. If cost effective alternatives are not
available from their wholesaler, you can file a MAC appeal requesting the payer
to review and increase the reimbursement rate. Typically, these lower
reimbursements, when not attributed to a low U&C, will be a result of a MAC
placed on the drug. If the pharmacy cannot purchase the drug at a low enough
rate, the payer may be willing to increase the MAC on the drug.
As outlined, the two services, pre and post edits, while good alone, can together
be very complimentary, optimizing reimbursement at differing points within the
life cycle of the claim. Net-Rx does just this by ensuring the amount billed is
greater than the contract rate for Medicare D plans and verifying there was no
money left on the table when payment is received. This can create a win-win for
you and your business protecting the revenue you already earned and opening
time for your team to grow your business with the potential to earn even more.
If you would like to learn more about the pre and post edit solutions
offered by Net-Rx, please reach out to us at www.net-rx.com/Contact_and_Support/ or
call us at (866) 336-3879.
Read Next: DIR Fees - Do you know what they are
and why transparency matters?
References
Issues In Pharmaceutical Reimbursement. (n.d.). Retrieved from Medical Billers and Coders:
https://www.medicalbillersandcoders.com/articles/revenue-cycle-management/issues-in-pharmaceutical-reimbursement.html
The Art of the Claw-Back. (2016, November 27). Retrieved from The Thriving
Pharmacist:
http://www.thethrivingpharmacist.com/2016/11/27/the-art-of-the-claw-back/