Pricing Systems and Structures Flashcards
Define National Provider Identifier (NPI)
Replacement of the social security number as the provider’s identity who do electronic submissions
Who needs an NPI?
Pharmacists who engage in MTM activities or bill electronically for any Medicare or Medicaid services
Medicare Part B recognizes pharmacist to bill for what services?
Immunizations
Durable medical equipment
Certified diabetic educators can bill for self management training
Lab tests
Define Billing code 99605
Initial encounter
Face-to-face
~15 minutes
Includes assessment and intervention
Define Billing code 99606
Established patient
~15 minutes
Define Billing code 99607
Each additional 15 minutes
3 components of costs
Fixed costs
Indirect cost
Variable cost
Define Fixed costs
Cost are incurred regardless of the volume of services provided
Aka equipment cost
Define Indirect costs
Cost are incurred even if you have no patients
aka utilities or rent
Define Variable costs
Costs increase as the volume of service increases
aka salary, materials, benefits
Define Direct Billing
Pharmacists submits a bill directly to the patient, insurance company or payer for services
Medicare B/D, nursing home consults or diabetes management
So how does direct billing start/work?
Starts with a contract
Set fee
Types of documentation required to be provided
Usually online
Define Indirect Billing
Requires submitting a bill in the name of provider and is most used for patient care for Medicare Part B
Incident-to-physician billing
What code is used for indirect billing?
Evaluation and management (E&M) code 99211
What must occur in order to bill this way?
- Collaborative practice agreement
- Patient has to be established under the physician
- Physician must be on premises
- Must be medically necessary
- Physician must still be involved with the patient
- 99211 only if physician did not see the pt
- Non-hospital based clinic
- Pharmacists must document the reason for the visit
Define Upcoding
99212-99215
Require some type of physical evaluation by the physician
Pharmacist do all the documentation by physician must see and eval the pt
Who sets the rules for E&M codes?
Center of Medicare/Medicaid Services but sometimes regional administrators will interpret and reject
What barriers to pharmacists have to overcome?
Lack of provider status limits reimbursement to cash in most cases
Unresolved issues with Stark which prohibits self-referral
Define Patient Centered Medical Homes
Moves away from fee for service to outcome based reimbursement
Mandates a team approach to care including pharmacy services
What does ACA mandate with pharmacists?
Medicare patients have a yearly review of medication that is compensated
Define Accountable Care Organizations
Led by primary care providers, and MTM services are integrated into the care model
What does a medical Home Model rely on?
A team effort to coordinate all care and payment for those services based on the quality of care
They share the amount of money provided to the responsible group
Define DRGs
Diagnosis Related Groups
Fixed rate reimbursement to the hospital for the diagnosis
The role of a clinical pharmacists is?
To lower costs to keep the hospital under the DRG max NOT drive more revenue
Define AWP
Average Wholesale Price
Not a real price but a regional average
Define WAC
Wholesale Acquisition Cost
Manufacturers published list price to the wholesaler but don’t normally pay this bc of contracts
Sometimes what pharmacies will pay for brand name drugs
Define AMP
Average Manufacturer’s Price
Average price paid by wholesalers to manufacturers for drugs sold to retail pharmacies
- Basis for Medicaid generic meds
Define AAC
Actual Acquisition Cost
Actual amount paid by a pharmacy to a supplier
- States move to use this for reimbursements
Define EAC
Estimated Acquisition Cost
Estimate what pharmacies actually pay for brand products
- Used to calculate reimbursement levels for PBMs
Define MAC
Maximum Allowable Cost
When you have a multi-source generic products; max dollar that will be paid per unit
Define FUL
Federal Upper Limit
Max dollar amounts for multi-source generic product
A professional fee is composed of?
An amount that recovers a portion of the overhead
+
Measure of desired profit per prescription
Retail Price Formula =
Acquisition Cost + Cost-to-dispense + Profit
What part of the retail price formula includes the professional fee?
Cost-to-dispense + Profit
Define Supply Channel
How we get the drugs from the original sourc eof ingredients to the patient
Define Pedigree or chain of custody
The ability to track from the source to the patient
Define PBM
Prescription Benefit Managers
Process claims and handle the disbursement of money back to the pharmacy
PBM’s manage?
The prescription benefit for employers and their interest is to show the employer that they can control the cost of dispensed prescriptions
Negotiators to determine prices between the drug manufacturers and the insurers
Define CTD
Cost-To-Dispense
Cost to produce one unit of service
Average of what is costs in terms of salaries and overhead to dispense on prescription
What is the amount needed to break-even?
Sum of the acquisition cost and the cost-to-dispense
Two functions of PBMs?
- Benefit design, administrative management, provider relations
- Control of drug utilization through efforts with physicians, pharmacists, formulary, mail-order, MTM and rebate
Define rebates
PBM gets a kickback from the manufacturer for selling their drug
- Seems illegal but are consider “legal kickbacks”
