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INTRODUCTION

Learning Objectives

  1. Explain how healthcare benefits are administered in the United States.

  2. Differentiate the types of healthcare benefits and payers that pharmacists can contract with for payment of products and services.

  3. Define the types of pharmacy benefit network structures.

  4. Describe how financial terms of pharmacy benefit contracts are structured.

Setting the Scene

After graduating and working as a staff pharmacist for 2 years, you decide to take the plunge into ownership. Your new pharmacy seems very successful offering a wide range of services in addition to accepting all major third-party plans. After you dig into the books, it appears the previous owner was not charging or was undercharging for services and third-party profit dropped by 10% each of the last 2 years. A few weeks later, you receive a notice that the pharmacy owes $20 000 to a major Medicare plan for something called DIR fees. Quickly, you realize understanding how to get paid is the key to survival for your pharmacy.

In 2019, 95% of all prescriptions purchased in the United States were paid or processed through a third-party payer.1 Understanding how to manage and maximize third-party revenue is now an essential role of all pharmacists and pharmacy technicians—not just owners and managers. Additionally, profit from prescription revenue will likely shrink in the future as new competitors enter the marketplace, politicians and the public continue to scrutinize the cost of prescription drugs and technology and convenience force change within the pharmacy marketplace.

The U.S. healthcare payment model is highly complex with multiple benefit structures, payers, and billing formats. As the role of the pharmacist in patient care services grows, getting paid will depend on understanding each of these components.

BENEFIT STRUCTURES

The U.S. healthcare payment system is a collection of different benefit structures. For instance, a dental benefit pays for services at the dentist, the medical benefit covers doctor and hospital visits and the pharmacy benefit offsets costs of prescription drugs. Pharmacies frequently bill claims under both the prescription and medical benefit.

Within each benefit structure there is also a plan design. Elements of a plan design include the premium, deductible, list of covered services, cost-sharing amounts and, in the instance of the pharmacy benefit, the formulary.

  • Premiums are routine payments made to an insurance plan. For instance, an employee may pay a monthly premium of $200 to participate in the company-sponsored health coverage.

  • Deductibles are the amount paid by the insured (the individual covered by the insurance plan) out-of-pocket before the plan begins to cover, or pay, for a portion of the services.

  • Covered services are the services in which some or all of the cost is paid by the plan.

  • Cost-sharing is the amount paid by the insured for a covered service. Cost-sharing is sometimes divided into copayments (e.g., copays) and coinsurance. Copayments are standard flat dollar amounts. ...

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