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6 Cards in this Set
- Front
- Back
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Receipt of Payment for Pharmacy Services |
There are basically two ways in which the pharmacy can receive payment for services. One is self pay, in which the patient pays the pharmacy directly. The second is payment by a third party payer. The third party payer can be used in two ways: The patient can pay the pharmacy and be reimbursed (out of pocket), in which case the pharmacist must fill out an insurance affidavit stating the drugs received, price, and other information required by the insurance company. The patient can pay a small amount (co-payment or co-pay) and the pharmacy bills the insurance company for the balance of the charge. |
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Third Party Payers Health Plan Benefits and Exclusions |
The technician needs to be familiar with the billing of third party payers. These payers may include:
-Traditional Insurance Companies, such as those received under an employee benefit package -Government plans such as Medicare and Medicaid -Private Insurance Companies
The Technician must be familiar with the various insurance plans and what they cover
Each health care plan has specific benefits and may or may not include payments for medications. Those plans that cover prescription medications may limit coverage in various ways, such as exclusion of outpatient prescriptions, limitation of outpatient coverage to oral dosage forms, exclusion of proprietary drugs, or limitations on quantity. Some health care plans have a "closed" formulary. This means that they will only pay for specific drugs for specific diagnosis. Exceptions may be considered, but often the patient ends up paying the difference between the cost of what they (health care plan) would cover and the exception drug requested. Insurance coverage must be verified at the time the prescription is received. Specific coverage information may be contained in the pharmacy's computer database. It should be noted that some insurance plans allow only generic drugs to be dispensed. If the patient or prescriber requests a brand name ( proprietary label), the patient would have to pay the difference in price. Exceptions to plan policy may be made by the insurance company under certain circumstances (eg. the condition is life-threatening or there is no generic brand marketed). Once the insurance coverage or method of payment has been established, the forms to be submitted to the insurance company must be identified and completed and the price of the medication calculated.Each health care plan has specific benefits and may exclude certain drugs, or limit quantities dispensed. |
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Institutional Pharmacy Billing - Role of the medication Administration Record |
In an institutional pharmacy setting, charges are billed to the patients account based on information form the medication administration record (MAR). Normally, charges are billed to the patients account at the time the medication is dispensed, which simplifies the billing process and improves billing accuracy. Medications that are dispensed but not administered are returned to the pharmacy and appropriate credit issued to the patients account. Insurance coverage verification and billing in a hospital setting are normally done by a separate billing or accounting department within the institution. In an institutional setting, charges for medications are billed to the patients account as the medication is dispensed. |
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Calculation of the Price of the Medication |
The selling price of a medication begins with the cost of the medication to the pharmacy (cost price). This is then increased by a certain percentage or dollar amount to the selling price. |
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The Dispensing Fee |
All medications dispensed by prescription will also include a dispensing fee. This may be either a percentage of the price or a flat fee added to the cost of the prescription. |
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Profit and Markup |
The markup rate or percentage of a drug is normally expressed as a percentage of the cost. For example, a markup of 100% would mean that the increase in price would be equal to the cost. (Since 100% is the same as multiplying a number by one, the markup is the same as the cost.) Example: The cost of a drug is $10. The markup is 100%, so 10 x 1 = $10. $10 (cost) + $10 (markup) = $20 The cost of a drug is $10. The markup is 50%, so $10 x .5 = $5 $10 (cost) + $5 (markup) = $15 The markup of a drug is not the same as the net profit that is made on the drug, as the cost of storing, inventory, and general overhead expenses must be taken into account when calculating the actual profit made. A discussion of the calculation of profit and markup may be found in Chapter 19. |
