1. From Prescription to Payment: Becoming a Pharmacy Technician Insurance Specialist Chapter 1
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2. Key Terms Copayment Accounts receivable (A/R) Adjudication Benefits
Billing cycle
Coinsurance
Copayment
Deductible
EDI (electronic data interchange)
Electronic prescribing (eRx)
Explanation of benefits (EOB)
Formulary
Health plan
Insurance payers
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3. Key Terms (Continued) Managed care Managed care organization (MCO)
Maximum benefit limit
Medical insurance
Medically necessary
Noncovered (excluded) services
Pharmacy benefit
Pharmacy claim
Pharmacy management (PM) system
Pharmacy technician insurance specialist
Point of sale (POS)
Policyholder
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4. Key Terms (Continued) Preferred drug list Premium
Prescription drug list (PDL)
Providers
Remittance advice (RA)
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5. The Importance of Pharmacy Benefits
In an average year Americans spend around $180 billion on outpatient prescription medications
Pharmacy insurance technician specialists fill many vital roles in the field:
Collecting payment for prescriptions
Interacting with patients, physicians, and health insurance companies
Processing prescriptions
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6. Medical Insurance Basics
Medical insurance is an agreement between a person, known as a policyholder , and health plan (or insurance payer)
People purchase medical insurance to be able to afford the expenses of medical care, such as preventative care and medications and treatments for sicknesses, accidents, and injuries
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7. Medical Insurance Basics (Cont.)
The Insurance Contract
The policyholder pays a premium to the health plan
In exchange, the health plan provides benefits for medical services
These services include care provided by hospitals, physicians, etc.
Benefits usually start once the policyholder has met their deductible
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8. Medical Insurance Basics (Cont.)
Medically Necessary
Described by The Health Association of America as “medical treatment that is appropriate and rendered in accordance with generally accepted standards of medical practice”
Consists of medical procedures and medications that are considered necessary
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9. Medical Insurance Basics (Cont.)
Covered Services
Pharmacy benefits usually cover a selection of prescription medications
A plan’s prescription drug list (or preferred drug list) contains a formulary, listing the covered drugs
Noncovered (excluded) Services
Medical services not covered as part of a health plan
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10. Medical Insurance Basics (Cont.)
Health Plan Limitations
A maximum benefit limit places a monetary coverage limit on particular services for the duration of the plan
Beneficiaries may be required to choose from a list of physicians and hospitals
Various specialists’ services and hospital benefits may not be covered
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11. Medical Insurance Plans
Indemnity Plans
The type of most medical insurance policies in the United States in the past
The plan policy lists the covered services and amounts that will be paid
Coinsurance, a payment by the beneficiary for a percentage of the medical costs, is often required
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12. Medical Insurance Plans (Cont.)
Managed Care Plans
Designed to supervise medical care to provide needed services in the most appropriate, cost-effective setting
Managed care organizations establish links among providers, patients, and payers
Patients are often required to make a copayment, usually a small fixed fee
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13. Sources of Medical Insurance
Private Plans
Offer a variety of types of medical insurance coverage
Most enrollees are part of a group contract, which are bought by employers or other organizations
Private insurance can be purchased for people not belonging to any groups
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14. Sources of Medical Insurance (Cont.)
Government Programs
Medicare – federal health plan for most citizens aged sixty-five and over, people with disabilities, end-stage renal disease (ESRD), and dependent widows
Medicaid – designed for low-income people; cosponsored by federal and state governments
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15. The Pharmacy Billing Cycle
Step 1: Receipt of Prescription
Step 2: Patient Interview
Step 3: Filling of Prescription
Step 4: Pharmacy Claim Transmittal
Step 5: Payer Adjudication
Step 6: Point-of-Sale Patient Payment
Step 7: Calculation of Payer Claim Balance
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16. The Pharmacy Billing Cycle (Cont.)
Step 8: Accounts Receivable Follow-Up
Step 9: Payment Processing
Step 10: Collections and Problem Resolution
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17. The Pharmacy Billing Cycle (Cont.)
Step 1: Receipt of Prescription
First step for a new prescription or a refill
The pharmacy receives a prescription through a patient or caregiver in person or by phone, by a physician or physician representative via phone or fax, or sometimes through electronic prescribing
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18. The Pharmacy Billing Cycle (Cont.)
Step 2: Patient Interview
The patient (or caregiver) is interviewed to determine if the patient is a returning or new customer, and if the patient is covered by a prescription drug plan
If prescription benefits are applicable, the patient’s answers to the appropriate demographic and health questions is inputted into a pharmacy management system
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19. The Pharmacy Billing Cycle (Cont.)
Step 3: Filling of Prescription
The assigned pharmacy staff member fills the prescription order after drug utilization and drug interactions are reviewed by the pharmacist
Medication is filled properly utilizing NDC numbers
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20. The Pharmacy Billing Cycle (Cont.)
Step 4: Pharmacy Claim Transmittal
A pharmacy claim is sent to the payer to identify the policyholder, prescriber, pharmacy, and prescription information for a payment decision
Most claims are sent electronically by electronic data interchange (EDI), although paper forms are an option too
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21. The Pharmacy Billing Cycle (Cont.)
Step 5: Payer Adjudication
The payer processes the claim to decide if the drug is covered and being used properly
The payer uses the benefit plan to calculate what the patient owes and what the insurance plan will pay
Real-time claim adjudication allows the pharmacy to receive the decision in seconds
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22. The Pharmacy Billing Cycle (Cont.)
Step 6: Point-of-Sale Patient Payment
The pharmacy gives the patient the prescription and collects the payment via cash, check, credit card, or debit card
Pharmacist consultation is offered on drug administration and the patient signs an insurance log verifying the prescription was received
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23. The Pharmacy Billing Cycle (Cont.)
Step 7: Calculation of Payer Claim Balance
The payer begins internal processing of the claim for payment to the pharmacy
The patient’s payment is subtracted from the total payer-specified payment, and the payer then owes the pharmacy this amount
The remaining balance is recorded by the pharmacy as accounts receivable
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24. The Pharmacy Billing Cycle (Cont.)
Step 8: Accounts Receivable Follow-Up
Most balances due are paid thirty to sixty days after the date of service
Pharmacy technician insurance specialists follow up on the balances due from payers
Accounts receivable is collected as rapidly as possible to provide funds for the continued operation of the pharmacy practice
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25. The Pharmacy Billing Cycle (Cont.)
Step 9: Payment Processing
Most payments are made electronically into the pharmacy’s bank account, or by check in a single transaction
A remittance advice (or explanation of benefits) is sent to the pharmacy showing the claim details, which is checked to verify it is correct through the process of reconciliation
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26. The Pharmacy Billing Cycle (Cont.)
Step 10: Collections and Problem Resolution
In some cases there will be payment problems, potentially from the payer or patient
Pharmacy technician insurance specialists follow up uncollected sums, track down and solve problems, and work to ensure maximum appropriate payment for the pharmacy practice
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27. Procedures, Communication, and Information Technology in the Pharmacy Billing Cycle
Each step of the pharmacy billing cycle has three parts:
Following procedures
Communicating effectively
Using information technology
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28. Following Procedures Administrative Duties
Entering data and updating patients’ records
Compliance
Securing computer files from unauthorized viewers
In most pharmacies, policy and procedure manuals are available that describe how to perform major duties
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29. Using Information Technology
Computer hardware and software information systems are in use in the pharmacy every day, making pharmacies more efficient and productive
Information must be inputted carefully and correctly in order for programs to function properly
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30. Communicating Effectively
Good communication is as important as knowing specific codes and regulations
A pleasant tone, friendly attitude, and helpful manner increases customer satisfaction
Conversations between pharmacy staff must be brief and effective
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31. Effects of Pharmacy Claim Errors
Errors Result in Problems
Lower Payment or Denied/Delayed Claims – incorrect coding causes claim denials and payment delays
Disruption of Other Work – time spent correcting errors can effect all pharmacy staff and slow operations
Problematic Customer Relations – pharmacy staff may have to spend time handling complaints and inquiries
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