Transcript Glencoe Medical Insurance

Claim Preparation
and Transmission
Chapter 6
1
© 2010 The McGraw-Hill Companies, Inc. All rights reserved.
Key Terms
• Average wholesale
price (AWP)
• Birthday rule
•CMS-1500
• Compounding
• Coordination of
benefits (COB)
• Dispense as written
(DAW) codes
Dispensing fee
• Durable medical
equipment (DME)
• Maximum allowable
cost (MAC)
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Key Terms (Continued)
•National Council for
Prescription Drug
Programs (NCPDP)
Telecommunications
Standard Version 5.1
and Batch Standard
1.1
• National Drug Code
(NDC)
• Primary insurance
Chapter 6
• Real-time claims
management systems
• Secondary insurance
• Switch vendors
• Universal Claim
Form (UCF)
• Usual and
customary price
(U&C)
3
Claim Content
•
•
•
When a patient fills a prescription with the
aid of any type of medical insurance, a
claim is sent to the necessary third parties
Proper filing saves the pharmacy from
unnecessary penalties and delays, and
ensure that the maximum benefit is
received
Most claims are now filed electronically
through online claim submission, although
paper claims are still sometimes used
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Claim Content (Cont.)
•
Five components must be recorded when a
claim is submitted:
1. Patient information
2. Prescriber information
3. Pharmacy information
4. Insurance information
5. Prescription information
• The correct insurance plan, codes, pricing,
and fees need to be assigned
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Claim Content (Cont.)
Patient information
– Recording the correct patient information is
vital to a successful claim submission
– The general beginning point for filing a claim
• Patient information includes:
– Basic information – name, gender, address,
date of birth, and phone number
– Relationship to cardholder, if applicable
– Pharmacy/Prescriber’s Internal Patient ID
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Claim Content (Cont.)
Prescriber information
– Correct information about the prescribing
physician must be recorded on the claim
– Must be verified in order for a prescription to
be valid
• Prescriber information includes:
– Prescriber ID (NPI or DEA)
– Prescriber last name
– Prescriber phone number
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Claim Content (Cont.)
Pharmacy information
– Identifies the pharmacy filling a prescription
– Will be consistent for every prescription the
pharmacy fills for a patient
• Pharmacy information includes:
– Identifier (NPI), formerly known as the
NABP number
– Basic information – pharmacy and
pharmacist name, address, and phone
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Claim Content (Cont.)
Insurance information
– For patients who have medical insurance, all
the relevant information is collected and
proper steps are taken to determine how to
file the claim
• Insurance information includes:
– Cardholder ID
– Group ID
– Patient relationship
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Claim Content (Cont.)
Prescription information
– Vital in determining how any applicable
medical insurance provider handles the claim
and what benefits will be assigned
• Prescription information includes:
– Drug name
– Drug dosage
– DEA number (required for controlled
medications)
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Coordination of Benefits
•
•
•
A provision that ensures that when a
patient is covered under more than one
policy, maximum appropriate benefits are
paid, but without duplication
Some patients have more than one
insurance policy
The primary plan is billed first and after
adjudication, the second plan can be billed
for any eligible, unreimbursed amount
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Determining the Primary Plan
•
•
•
Primary insurance is the first insurance
that the patient will use for claims, while
secondary insurance is used afterwards for
any remaining expense
Specific facts are used to determine which
plan is primary by technician specialists
A child’s primary insurance is usually
determined by the birthday rule
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Dispense As Written (DAW)
Codes
•
•
•
Set of NCPDP codes used to inform third
parties of the reason why a brand or
generic product was used to fill a
prescription
Prescribers and pharmacies must
prescribe and dispense the generic form of
a drug whenever possible
DAW codes indicates whether or not the
prescriber’s instructions regarding generic
substitution were followed
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National Drug Codes (NDC)
•
All outpatient prescription drugs are billed
using the drug’s NDC
• Services for pharmaceuticals must be
submitted using NDCs in 11-digit format
• The three segments of the NDC are:
1. Labeler code
2. Product code
3. Package size
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Pricing Prescriptions
•
Four main methods are used to price
pharmacy prescriptions in the retail
setting:
1. Usual and customary price (U&C)
2. Maximum allowable cost (MAC)
3. Average wholesale price (AWP)
4. Pending AMC Price
• Mathematical calculations are often
required to find the appropriate price
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Usual and Customary Price
(U&C)
•
•
•
•
Price the provider most frequently charges
the general public for the same drug
Generally determined at the corporate
level by providers
Computers in pharmacies are often
programmed to calculate the U&C price
automatically
Also known as Usual, Customary, and
Reasonable Payment Structure (UCR)
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Maximum Allowable Cost (MAC)
•
•
The greatest unit price that the payer or
PBM will pay
If the pharmacy has a contract as a
network member of a health plan run by
third-party payers and PBMs that covers
the customer, charges for prescriptions are
based on the terms of that contract
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Average Wholesale Price (AWP)
•
•
•
The AWP of a prescription drug is the
average price at which a wholesaler sells
drugs to pharmacies, physicians, and other
consumers
The pricing information is based upon
data obtained from various distributors,
manufacturers, and other suppliers
Generally used as a drug pricing
benchmark for payers
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Compounded Drugs
•
•
•
Procedure of creating combinations of
drugs that are prepared or mixed prior to
purchase is called compounding
Pricing structure is generally U&C, and
fees are usually higher
Compounding may require a pharmacist
to utilize medication knowledge and
expertise to mix, assemble, package and
label, and prepare drugs (and other
components) in a specific manner
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Dispensing Fees
•
•
Fee for a pharmacy’s professional services
Determined by several factors specific to a
pharmacy, including the following
components of pharmacy operating costs:
• Staffing
• Store operations and overhead
• Prescription preparation
• Assurance of proper medication use
• Allowing for a reasonable profit
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Creating Claims
•
Within the pharmacy system, three claim
submission options are in use:
1. Electronic (real-time)
2. Electronic (batch)
3. Paper
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Electronic Claims
•
In pharmacy billing, electronic claims can
be adjudicated in real time or in several
batches throughout the day
• Real-time claims management systems
enable providers to submit electronic
pharmacy claims in an online real-time
environment
• Within seconds, a patient’s eligibility is
confirmed and the provider receives a
response indicating payment or denial
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Electronic Claims (Cont.)
•
•
•
In some cases, the claim is routed to a
switch vendor before being sent on to the
payer
Switch vendors verify that a claim
conforms to NCPDP transaction standards
before forwarding it to the payer’s claim
system
Real-time systems perform many other
functions as well
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National Council for Prescription
Drug Programs Standards
•
The National Council for Prescription
Drug Programs (NCPDP)
Telecommunications Standard Version 5.1
and Batch Standard 1.1 is the HIPAA
standard for electronic retail pharmacy
drug claims
• Defines the record layout for
prescription claim transactions between
providers and adjudicators
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Paper Claims
•
Most payers require the NCPDP universal
claim form (UCF) for paper claims
• A two-sided document
• Requires the patient’s information and
their signature
• Details about the prescription are
included
• Paper claims are processed through the
pharmacy system but do not result in realtime claim responses to the provider
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Drug Utilization Review (DUR)
•
•
Once a claim has been submitted, whether
electronically or on paper, it is subjected to
editing for drug utilization review
Process by which prescribed medications
are evaluated against explicit criteria to
improve the quality of drug therapy and
reduce unnecessary expenditures
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Drug Utilization Review (Cont.)
•
Examples of DUR issues include:
• Early refill
• High or low dose
• Ingredient or therapeutic duplication
• Maximum duration
• Drug-drug interaction
• Late refill monitoring
• Several other precautions
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Durable Medical Equipment
•
Another type of pharmacy billing that will
occur from time to time
• DME is comprised of certain medical
equipment that is ordered by a doctor for
use in the home
• Such as walkers, wheelchairs, and
hospital beds
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