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Prescription Claim Billing – Benefits of a Pre and Post Edit Solution

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 net-rx.com/Contact_and_Support/ or call us at (866) 336-3879.

 

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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/

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