T3: Third Party Flashcards
What is a third party?
An organization that reimburses a pharmacy or patient for all or part of the patients prescription drug costs
What are the types of third party payers?
Public and Private
What are private TPP?
- Usually an insurance company.
- May be a manufacturer or other discount program.
What are public Public TPP?
Government entities that pay for prescriptions through a government program.
What is medicare?
the government program that provides health insurance for the elderly and disabled, implemented a voluntary Medicare Part D program in 2006.
What is Medicaid?
funded jointly by federal and state governments, with each state determining its own prescription drug reimbursement rates.
What are PBMs?
Provide prescription claims processing and other services
What type is the most TPP?
Private but more recently it has shifted toward public
What is difference between pharmacies and TPP?
- Pharmacies determine the price they want to charge private pay patient
- TPP is determined by a contract between the third party and pharmacy
Describe TP prescriptions?
the pharmacy staff must verify patient eligibility, submit and reconcile claims, wait for payment, and comply with third-party rules and requirements, such as formularies.
What are the benefits of TPP?
- Require that patient obtain their prescription from a network pharmacy, or they may allow patients to use non-network pharamcies
- May have preferred pharm network within broad network
What do pharmacies choosing to be a preferred pharmacies obtain?
Additional prescription volume, but usulally at the cost of lower reimbursement rates
What is a service benefit plan?
The patient may pay the pharmacy a predetermined portion of the prescription cost, but the pharmacy is reimbursed directly by the third party for most of the prescription cost
What are third party reimbursements?
- Payments are based on a reimbursement-rate formula that is specified in the contract between the pharmacy and the third-party payer.
- Product cost + dispensing fee
Most third-party contracts state that the reimbursement rate for a prescription of what lower prices?
- The price of from the reimbursement rate formula
- The usual and customary pharmacy prices
What is Actual acquisition cost (AAC)?
The price that the pharmacy pays the drug wholesaler or manufacturer to obtain the drug product.
What is Average actual acquisition cost (AvAC) or (AAAC)?
An average of the prices paid by different pharmacies for drug products. Must be determined via pharmacy survey.
What is average manufacturer price (AMP)?
The average price received by a manufacturer from wholesalers for drugs distributed to the retail class of trade.
What is average wholesaler price (AWP)?
A list price for what drug wholesalers charge pharmacies. This is an overestimate of what the wholesaler actually charges the pharmacy.
What is Estimated acquisition cost (EAC)?
The third-party’s estimate of what the pharmacy pays the drug wholesaler or manufacturer.
What is Generic drug utilization rate (GDUR)?
The percent of prescriptions at a pharmacy that are dispensed with a generic drug. Also called generic dispensing rate.
What is is Generic effective rate (GER)?
The average third-party reimbursement rate for generic prescription drugs across all generic drug products.
What is Maximum allowable cost (MAC)?
The maximum cost that the third party will pay for a multisource drug. This typically is an average of the generic drug price from several manufacturers.
What is Wholesaler acquisition cost (WAC)?
A list price for what pharmaceutical manufacturers charge drug wholesalers. This is an overestimate of what manufacturers actually charge wholesalers.
What is the bank ID number (RX bin)
used to identify how a prescription drug will be reimbursed and where a pharmacy can send a reimbursement claim to
What is the processor control number (Rx PCN)?
secondary identifier that may be used in routing of pharmacy transactions. A PBM/processor/plan may choose to differentiate different plans/benefit packages with the use of unique PCNs
What is the group number (Rx group)?
your employer identification number. Health insurance providers assign a GRP number to each employer plan.
Describe the PBM money flow route?
What is ID number/member Id/Subscriber ID?
patient specific. May end with a different number if coverage includes more than one person (person code).
How many prescriptions have been filled by paying third party?
89%
Describe third part rejections (TPRs)?
- Resolving these rejections takes time and effort
- Communicating the status of a patients rejected prescription is another opportunity to build trust
What are the types of common TPRs?
- Prior authorization (75)
- Non formulary item (MR)
- Refill too soon (79)
- Plan limitations exceeded
- Cost exceeds maximum
- Submit to primary (41)
What are prior authorization?
- Requires documetation from prescriber
- May take several days to resolve
- No guaranteed approval
- May have higher copay
What communications are used during prior authorization?
- Communicate with prescriber via fax, phone, or electronic message.
Communicate with patient/caregiver in their preferred method.
What do non formulary item require?
- Requires changing medication.
- Patient/Prescriber may be able to submit an appeal.
- Often alternatives will be presented.
What communications are used for non-formualry item?
- Communicate with prescriber via fax, phone, or electronic message.
- Communicate with patient/caregiver in their preferred method.
What are required for refill too soon?
- Requires setting a prescription to fill on a future date.
- Insurance may allow for overrides in special circumstances.
What communications are involved with refill too soon?
Communicate with patient/caregiver in their preferred method.
What is required when plan limitation exceeded?
- Requires a change in quantity/days supply.
- Rejection screen should indicate what amount will be covered within a specified time period.
What is required for cost exceeds maximum?
- May require an override.
- May require a change in quantity/day supply.
What is required to submit to primary?
- Patient has another prescription insurance company.
- May require patient reaching out to both companies.
What communications are involved with plan limitations exceeded?
Communicate with patient/caregiver in their preferred method.
What communications are involved with cost exceeds maximum?
- Communicate with prescriber as necessary.
- Communicate with patient/caregiver in their preferred method.
What communications are involved with submit to primary?
Communicate with patient/caregiver in their preferred method.
How do we resolve TPRs?
- Rx accepted/entered at pharmacy
- Insurance company returns a rejection in real time
- Inform the patient/caregiver
- Notify prescriber and provide guidance for next steps
- Communicate outcome to patient/caregiver
