By Carlo Lupano, RPh, MBA
In order to properly address issues with ambulatory pharmacy reimbursement, it is necessary to first acknowledge the vast differences between ambulatory and inpatient pharmacy reimbursement models. Unlike the inpatient pharmacy, where drug costs are usually included in the room charge, the per-day charge, or a rate for a specific diagnosis, many drugs can be reimbursed individually in ambulatory pharmacy.
Making sure drugs are reimbursed correctly is a critical concern because a charge mistake made on a patient’s bill can lead to disqualification of that charge and the hospital then is liable to refund the money. For example, if the service date listed is off by one day or the patient received a medication on a particular day, but a credit is listed on the following day, these errors can trigger an audit.
While ensuring that drugs are being billed for correctly can be challenging, there are many ways to help mitigate potential reimbursement issues.
One of the most effective ways to reduce reimbursement issues in the ambulatory pharmacy is through proper education. Often, problems arise as a result of unfamiliarity with all the different processes and technologies associated with reimbursement. Working closely with the patient accounts and finance departments is a great way to become better educated on the intricacies of the reimbursement system. Also look to outside sources for education opportunities. The various pharmacy professional societies, such as ASHP, often offer education resources. In addition, it is important to stay apprised of changes in the health care industry that impact reimbursement; Centers for Medicare & Medicaid Services (CMS) is constantly updating how they approach reimbursement.
We meet monthly with the finance and patient accounts departments to discuss reimbursement issues and how to better approach and prevent them. We assign a specific topic, such as the chargemaster, to discuss at each meeting. Finance is usually very willing to work with pharmacy; oftentimes it is just a matter of reaching out and making the first phone call.
Another way to help mitigate reimbursement problems is to perform internal audits. If there is an external audit because of a billing error, chances are that error has occurred more than once—and the error usually involves either a wrong code or multiplier entered in the chargemaster.
These mistakes are most likely to occur when adding a new drug to the formulary or when CMS changes the rates or rules by which it pays on drugs (a frequent occurrence). It is good practice to run a test bill on any new drugs added to the formulary. However, even if the new drug is tested in the system and everything seems fine, the bills of the first five to 10 patients that receive the new drug should be reviewed to make sure that you are being reimbursed correctly. Keep in mind, whether you are over paid or under paid, it is considered fraud and abuse by CMS.
One example of an effective internal audit practice is to focus on one particular drug and look at all the bills that contained that drug during the previous month. I also would recommend performing an audit on your 10 most costly drugs. If there is even a slight error in the chargemaster set up for these drugs, that can dramatically impact reimbursement. Another good audit practice is to take a few patient bills every month and scrutinize all of the drugs on those bills
In today’s current economic environment, there is a great deal of incentive for CMS and insurance companies to perform audits and look for reasons to disqualify a claim or a charge. With this in mind, it is critical to be vigilant with patient billing. Historically, pharmacists have not been trained on the financial concepts related to medication administration, and the increasing complexity of issues related to reimbursement can be challenging. To meet these challenges, pharmacy must reevaluate their traditional role and work with finance to manage the medication process in its entirety: from ordering and administration through billing and financial analysis.
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