Transcript Pharmacy Technician*s Course. LaGuardia Community College

Third Party Payers
 Direct Payment is when the patient pays for pharmacy
services and drug directly out of pocket; very common
before 1970’s
 Today most pharmacy reimbursement comes from
Third Party Payers
 Patients hold insurance for medical expenses
 As a part of the insured’s coverage the third party payer
contracts with a PBM (Pharmacy Benefits Manager) to
provide pharmacy coverage
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Express Scripts is an example
 Medicare
 Government insurance for those over 65
 Patients young that 65 with certain disabilities
 Any age patient with end stage renal disease
 Part A=hospital (nursing home, skilled nursing care, hospice)
 Part B= MD office and physical therapy (also covers DMEPOS
durable medical equipment, prosthetics, orthotics and supplies).
For this patient pay a premium deducted from the social security
check
 Part C= Medicare advantage
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Offered by private companies who work with the government
Part A and Part B is required
Offers extra coverage like dental, vision
Larger Premiums but more coverage
 Part D= Rx drug coverage
 Part D was signed into law in 2003
 Provide Rx coverage to seniors
 Premium depends on plan
 Most drug classes are covered except, most notably, the BDZ’s
 All plans have coverage up to about $2,700/year after which
the patient covers all the cost of the drug
 After the patients reaches about $4,500 in cost, Plan D kicks
in as catastrophic Rx coverage where it pays 100% of the cost
 This gap in coverage is called the “donuthole”
 Open enrollment for any given year is October 15-December 7
Medicaid
 Government health insurance for needy people,
pregnant women, teenagers, individuals who are
legally blind
 State splits the cost with the federal government
 When a pharmacy submits a claim, we are paid at the
MAC (maximum allowable cost) or the EAC
 Often patients are allowed to combine a managed care
plan with their Medicaid. Common managed care
plan are Fedelis card, Metroplus. Managed care pays
for legend drugs and Medicaid picks up OTC and
generic drugs
Other government programs
 Worker’s Compensation
 A worker injured on the job and that requires
prescription medications will have no copay for drugs
 Pharmacy files paperwork with employer to the state
and federal governments
 TRICARE is the health insurance plan that services
uniformed armed services men and women
 CHAMPVA (civilian health and medical program of
the veteran administration) is insurance for
permanently disabled veterans and their family
members
Private Third Party Payers
 Health Maintenance Organization (HMO)
 Insurance provider that contracts with medical providers,
hospitals, and other institutions to provide services under an
agreed upon fee called a capitation fee. Once agreed upon,
the provider is now a “network provider”
 The insured person is to select a PCP (primary care provider)
who controls access to specialist via referrals; specialist must
also be in network
 Coverage is not provided for out of network providers
 Lowest premiums and no deductables
 Blue Cross/Blue Shield is an example of an HMO
 Point of Services Plans (POS)
 Similar to HMO
 In network doctor called a Primary Care Provider (PCP)
acts as a “point of service”
 PCP can make a referral for specialists out of the
network
 Out of network providers can be seen
 Slightly higher premium and deductibles (not with
HMO) but more freedom
 CIGNA health is an example
 Preferred Provider Organization (PPO)
 Similar to a POS
 Main advantage is that referral are not needed to see
specialists
 Provides most freedom but costs more
 Adjudication formulas and Reimbursement
 Pharmacy Pricing Benchmarks
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AWP- Average Wholesale Price is published by the wholesalers across the
country for the drug. The data is compiled by First Databank, a data collection
company
U&C – usual and customary is published by the manufacturer, wholesalers and
government. Often your pharmacy software creates it own U&C based on your
actual acquisition cost. This is often the cash price a customer with no insurance
pays
MAC – maximum allowable cost : used in calculating the reimbursement for
older generic drugs by PBM’s
A PBM will pay either
 MAC (for generics)
 AWP – a certain percentage
 U&C
 Which ever is smaller
 Actual Acquisition cost=AAC
 Estimated Acquisition cost (EAC)= what medicaid pays the pharmacy for drugs
 Profit, or the spread= what pharmacy is reimbursed- AAC +
dispensing fee
 Capitation Fee
 Insurance company agrees to pay a flat fee per every covered patient
that is client of the pharmacy. Patient only goes to that pharmacy
Paper Claims
 Some claims are still paid after submission of a paper
claim form
 Standard form is the CMS1500
 Billing codes include
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CPT for medications and the newly created MTM
HCPCS for durable medical equipment and supplies (walkers)
ICD 10 codes for other procedures
Prescription Drug Card
 When patients receive medical coverage cards they usually receive two cards
 One card provide office visit information
 Second card provide pharmacy coverage information
 Information on the Rx card
 Managed care plan (insurance company)
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Affinity Health
Fidelis Care
HIP
MetroPlus
 Pharmacy Benefits Manager
 Express Scripts
 CVS Caremark (CVS health)
 Medco (acquired by Express Scripts)
 Prime Therapeutics (BCBS)
 United Health/OptumRx
 RX BIN (bank Identification number) identifies the PBM and the payor
 RX BIN for express scripts 003858 for example
 PCN (processor control number) may or may not be
needed
 Group Code: identifies the group that contracted with the
managed care plan, may be a large group of employers
 i.e. RX1199 identify 1199 union members
 Cardholder: name of the primary beneficiary
 Person code: relationship to cardholder
 primary beneficiary is 01
 Spouse is 02
 Sequential dependents are 03,04, etc
Rejection Codes
 National Council for Prescription Drug Program
(NCPDP) rejection codes
 Claims that are rejected have at least one or more
rejection codes
 Rejection codes are standardized across the country
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Code 1= missing BIN
Code 8= invalid person code
Code 19 = invalid day supply
Code 71= Prescriber not covered
 Knowledge of the actual code is not required on the
PCTE but the meaning should be understood
 Common Rejections
 Invalid DOB, or person code
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Enter corrected information and resubmit claim
 Filled after coverage terminated
 Ask for new insurance card; patient may have changed insurance or
insurance may have new PBM or patient may have new ID#
 Quantity exceeds plan limitation
 Try to enter prescription with a reduced quantity with more refills
and resubmit. i.e. 90 tablets with 2 refills = 30 tablets with 8 refills
 Refill too soon
 Patient must come back for refill
 75 % time allotment on regular RX
 If vacation supply is needed, may obtain override code from PBM
and resubmit
 Prescriber is not covered
 Prescriber is out of the network for the plan; patient must pay full
price
Prospective Drug Utilization Review
ProDUR Rejections
 DUR errors and rejections results from a proDUR that
flags a problem from the prescription and the patient’s
current patient profile information as required by
OBRA90
 Normally these rejections can be overridden by the
pharmacist or pharmacy technician with special
NCPDP codes called conflict codes, intervention codes
and outcome codes
 Conflict Codes (Common ones)
 TD= Therapeutic duplication
 ER= Early Refill
 DD= Drug Drug Interaction
 HD= high dose
 LD= low dose
 DC= drug contraindicated with patient’s disease states
 Intervention codes (most common)
 M0 (zero)= MD consulted
 P0 (Zero)= patient consulted
 R0 (zero)= Pharmacist consulted other reference
 Outcome code
 1B= filled as is