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Ncpdp Adjudication - Physician Dispensing For A Loss
By www.menhealthonline.biz

Ncpdp Adjudication - Physician Dispensing For A Loss
By www.menhealthonline.biz

For years, physicians have dreamed of adjudicating pharmacy claims like the corner drugstore. In order to prevent dispensing medications to patients for which they will not be reimbursed, physicians have to do what is called "real time" claim adjudication before the patient leaves the practice. Much like a pharmacy, software is used by the physician practice to transmit a NCPDP claim and get a response in seconds with coverage information, co-pay amounts and other important information. So why don't the majority of physician practices doing this for extra income today?

Turns out that there are several business problems in doing this. There are some special cases, but for the most part overcoming the issues below will require more effort than most physician practices are willing to invest.

Issue #1: Contracting with PBM's and payers

You probably guessed that you cannot simply take a NCPDP ID or NPI number and start sending pharmacy claims. Physicians have to be contracted with payers in some fashion. In addition, the physician will need an account with a switch to route the claims. (Typically PerSe.com or WebMD.com) Most physician practices do not have the resources and contacts to accomplish this on their own. In addition, many payers require the physician's practice to carry additional insurance for liability. To the rescue are companies willing to do all this for fees around $5000 per physician per year. (That does not include any transaction fees or higher repackager prices.) Bottom line is that now there is another company with its hand in the pot, and the practice soon realizes that they are doing the majority of the work and receiving little income.

Issue #2: Untrained personnel

The NCPDP standard for transmitting claims handles a many aspects of claim adjudication. Each payer has their own payer sheets making the transmission of claims slightly different depending on the payer. In addition, payers do Drug Utilization Review (DUR) checks as part of the claim. This results in messages back to the transmitter like "Too Soon" because of a previous fill, or "Call 800 Number" in order to get authorization codes. This is everyday stuff for the pharmacist at the corner drugstore, but extremely challenging to untrained medical office staff. Medical practices do not tell patients to return in 30 minutes so the patient is held up typically in patient examination room or checkout counter while all this is going on. Some practices attempt to use a full-time dedicated resource to handle this but quickly realize that there better be significant volume to pay for this and a backup for vacation days.

Issue #3: Name brands

Practices find that in order to dispense to the majority of their patients, they will have to dispense and adjudicate

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name brand medications. The first problem is that having name brands in inventory costs thousands of dollars, typically more than the line of credit a repackager is willing to give to a new customer. The next problem is that the amount the payer compensates on name brands medications is LESS than the cost of the medication from the repackger. With margins so tight on name brands, there is no way a repackager can get the name brand medications, repackage them, and deliver them to a practice at a price below the amount payers are contracted to pay for the medication. (Remember, pharmacies buy name brands by the bucket and count them themselves.) The practices soon realize that they can lose from $5 to $20 per pharmacy claim when adjudicating name brand medications. These losses eat up the profits from the generic medications. In addition, payers pay a minimum Net 30 so in addition to inventory costs, the practice has to put months of name brand medications on the street before seeing a single dime.

Issue #4: No chips or soft drinks

Ever wonder why your local pharmacy store has the pharmacy at the back of the building and why they don't call you when the prescription is ready? It's because they need you to shop there in order to pay for the costs of running a pharmacy. At 300 to 500 prescriptions a day, pharmacies need a little more to pay for that nice store on the corner lot. Unfortunately, practices don't have retail items on display to help pay for the dispensing operations. For doctor practices, pharmacy dispensing must be a self-sustaining operation.

Then there are sales people roaming around physician's practices telling them the solution is to bill payers like Medicaid for the maximum possible price. The problem? There's this little issue where practices are required to bill federal programs "normal and customary" amounts. The solution? Don't dispense to any cash paying patients so that your normal and customary prices remain high. The problem? You have to be dispensing and operating to pass your Medicaid inspection before you can bill them. Who would have guess that one?

We hope that some of the issues raised in this article will make physician's practices think about the business aspects related to NCPDP pharmacy claim adjudication. Some additional tips: Do not over estimate the number of prescriptions that your practice writes in order to make the numbers look better. Ask companies about any prior lawsuits or regulatory issues they have encountered. Get medication costs and reimbursement amounts for the medications your practice dispenses in writing. A little homework up front can save you lots of trouble and money.

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