Financial Issues Chapter 14

Financial Issues Financial issues have a substantial influence on health care and pharmacy practice. In 1985 the average prescription price was $ In 2002 the average price of a prescription was about $ Financial issues have a substantial influence on health care and pharmacy practice. In 1985 the average prescription price was $ In 2002 the average price of a prescription was about $60.00.

Financial Issues Why the increase? Inflation The aging of the population New treatments Advances in technology Direct to consumer advertising The use of third party programs to pay for Rx’s has increased in response to the rising Rx costs. Why the increase? Inflation The aging of the population New treatments Advances in technology Direct to consumer advertising The use of third party programs to pay for Rx’s has increased in response to the rising Rx costs.

Financial Issues Because of the pharmacy technician’s role in the Rx filling process, you must understand the different types of health insurance programs and how drug benefits differ between each program.

Terms PBM – Pharmacy benefits manager: companies that administer drug benefit programs. Online adjudication – the resolution of prescription coverage by communication between the pharmacy’s computer & the insurer’s computer. PBM – Pharmacy benefits manager: companies that administer drug benefit programs. Online adjudication – the resolution of prescription coverage by communication between the pharmacy’s computer & the insurer’s computer.

Terms Co-pay – the portion of the price of the medication that the patient is required to pay. MAC (maximum allowable cost) – the maximum price per tablet (or dispensed unit) that an insurer or PBM will pay. NOTE: **Pharmacies bill at the time of filling, & will know a patient’s eligibility, copay and what the insurer will allow as payment. Co-pay – the portion of the price of the medication that the patient is required to pay. MAC (maximum allowable cost) – the maximum price per tablet (or dispensed unit) that an insurer or PBM will pay. NOTE: **Pharmacies bill at the time of filling, & will know a patient’s eligibility, copay and what the insurer will allow as payment.

Managed Care Programs HMOs – Health Maintenance Organizations HMOs are made up of a network of providers who are either employed by the HMO or contractually obligated to abide by the HMO’s policies. Services are covered in network, but not if outside network providers are used. HMOs – Health Maintenance Organizations HMOs are made up of a network of providers who are either employed by the HMO or contractually obligated to abide by the HMO’s policies. Services are covered in network, but not if outside network providers are used.

Managed Care Programs POS – Point of Service A network of providers where the insured’s primary care physician (PCP) must be a member. Costs incurred outside the network, may be partially reimbursed, but patient usually must have a referral from the PCP. POS – Point of Service A network of providers where the insured’s primary care physician (PCP) must be a member. Costs incurred outside the network, may be partially reimbursed, but patient usually must have a referral from the PCP.

Managed Care Programs PPO – Preferred Provider Organization A network of providers, contracted by an insurer. The patient’s primary care physician (PCP) need not be a member, Costs to the patient are reimbursed according to the use of the preferred providers. Cost from non- preferred providers may be partially reimbursed. PPO – Preferred Provider Organization A network of providers, contracted by an insurer. The patient’s primary care physician (PCP) need not be a member, Costs to the patient are reimbursed according to the use of the preferred providers. Cost from non- preferred providers may be partially reimbursed.

Third Party Programs Medicare A federal program that funds health care to people over 65 years or with certain disabilities. Part A – covers inpatient hospital & some hospice services. Part B – covers doctor services and some additional medical services. Part C – advantage plans; patients can choose to receive all benefits from a managed plan provider. Part D – covers prescription drugs Medicare A federal program that funds health care to people over 65 years or with certain disabilities. Part A – covers inpatient hospital & some hospice services. Part B – covers doctor services and some additional medical services. Part C – advantage plans; patients can choose to receive all benefits from a managed plan provider. Part D – covers prescription drugs

Third Party Programs Medicaid Called Medi-Cal in California A federal/state funded program, administered by the state providing health care for the needy. Worker’s Compensation An employer compensation program for employees accidentally injured on the job. Medicaid Called Medi-Cal in California A federal/state funded program, administered by the state providing health care for the needy. Worker’s Compensation An employer compensation program for employees accidentally injured on the job.

Online Adjudication In online adjudication, the technician uses the computer to determine exact coverage for each Rx with the appropriate third party. When brand name drugs are dispensed, dispensed as written (DAW) numbers must be entered into the DAW field to ensure proper payment. See codes on page 339 In online adjudication, the technician uses the computer to determine exact coverage for each Rx with the appropriate third party. When brand name drugs are dispensed, dispensed as written (DAW) numbers must be entered into the DAW field to ensure proper payment. See codes on page 339

Rejected Claims In the online adjudication process, sometimes the insurer rejects the submitted claim. When a claim is rejected, the pharmacy tech can call the insurance plan’s help desk for assistance in correctly billing the claim. (Detective work) In the online adjudication process, sometimes the insurer rejects the submitted claim. When a claim is rejected, the pharmacy tech can call the insurance plan’s help desk for assistance in correctly billing the claim. (Detective work)

Chapter 14 Read Chapter 14 Review: Terms Third party programs Online claim process Online claim information DAW codes Rejected claim issues Read Key Concepts Review Self Test Read Chapter 14 Review: Terms Third party programs Online claim process Online claim information DAW codes Rejected claim issues Read Key Concepts Review Self Test