Gaining knowledge about the various health care plans available can help you better manage your medical bills and out of pocket costs while finding the best health insurance for the patient. However, the problem is that health insurance can be confusing and terms like Insurance vs. out-of-pocket maximum can make your head spin if you don’t know the differences between them.

Difference between Insurance and Out of Pocket Maximum

Let’s taken an example, that your health care insurance provider, by the name of XYZ Insurance Co., offers you a health plan with an Insurance of $1,300 for single coverage, which also is the average annual Insurance in the U.S. That means you need to pay up at least $1,300 worth of pharmacy medical bills before your insurance starts to pay anything for your care. Some plans will cover things like yearly checkups in addition, but for actual procedures, you’re on the liable for all of the costs before your insurance kicks in at all.

So, now you’re probably thinking that once you hit that golden number of $1,300, you don’t owe pharmacist a thing. Well, you would be wrong. This is where out-of-pocket maximum comes into play. Once you hit your annual Insurance, you’ll still be responsible for a portion of your medical bills. The particular portion you are responsible for paying, which usually ranges from 10% to 30%, of costs, is called your “coinsurance.”

Here’s a rundown guide for understanding these terms:

Insurance: It is the amount of money you have to spend each year before your insurance starts to cover your medical expenses.

Out-of-Pocket Maximum: The out-of-pocket limit is the absolute maximum amount of money you will spend each year, including your co-insurance after you’ve hit your Insurance amount.

Patient Payment Plan: Parasail helps patients cover large medical bills from high Insurance s and co-insurance by finding them fixed-rate loans that typically have better interest rates than most credit cards. So you can buy a plan with lower premiums and still be able to cover higher Insurance s if you ever need to.

Coinsurance: The patient is likely responsible for paying co-insurance after you hit your Insurance, which usually can differ from 10% – 40% of your pharmacy medical billing and also depending on your plan.

Copay: Now this a fix, isn’t it? Astonishingly, insurance companies call the smaller fixed amount you pay for office visits, a co-pay and it’s often ranges somewhere from $20 – $50. Generally, your copay does not count toward your Insurance. So lots of office visits can add up.

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Physician Shortage

This initial shortage led to the expanded scope of practice for nurse practitioners and physician assistants. Since then, the shortage has continued to increase with fewer graduating physicians entering into the field of primary care.

Many reasons have been postulated to explain this consistent decline, such as a push for specialization and the high cost of medical school. This has left a gap in our ability to provide everyone with adequate health care services across our country. Numerous solutions have been presented to fill this healthcare gap. One solution that has been evolving in parallel consists of the changing role of pharmacists in healthcare.

New Role of Pharmacists in Healthcare

The role of a pharmacist has evolved over the past few decades from an auxiliary member of the healthcare team to direct patient care providers. Pharmacists have left traditional roles of “lick, stick, and pour” to now providing disease management. The escalating costs of healthcare and powerful medications with narrow therapeutic ranges have made the role of a pharmacist as a care provider more important than ever.

Pharmacists are trained to be care providers and, as such, have proven them able to improve efficacy and safety of medication use, positively impact the patient experience, and increase access to medications and vaccinations. Yet despite these advances, hurdles to the expansion of pharmacy services remain, including the lack of federal recognition as providers, slow adoption of pharmacist scope of practice acts at the state level, limited acceptance of the expanded role of pharmacists among leaders in health systems and other healthcare providers, and minimal ability to receive reimbursements for services. Hence, although evidence supports pharmacists’ expanded role, limitations to implementation, sustainability and scale remain, especially as it relates to providing preventative outpatient care.

Fixing The Solution

Fixing the doctor shortage requires a multi-pronged approach. This includes innovations such as team-based care and better use of technology to make care more effective and efficient. AAMC-member medical schools and teaching hospitals have been leading the movement to work better in teams with other health professionals like nurses, dentists, pharmacists, and public health professionals. These institutions also are developing new knowledge of what works in health care not only by reading the textbooks but writing the textbooks to advance the delivery of care.

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A key process to ensure correct billing and coding, to avoid rejection of improper claims, financial penalties, and overall revenue loss is ‘Monitoring and Auditing of medical claims’. These claim audits strengthen and improve the overall coding and billing process by ensuring there are no errors.

Common Errors in Coding and Billing

Common problem areas which pose a substantial threat to physicians and practices:

• Failure to attach the right codes to various diagnoses
• Not documenting the medical record properly
• Wrongly coding an office visit as a referral, and not a consultation
• Unbundling i.e. billing each component of a multiple-component service as a single service
• Manipulating billing by adding items and services
• Submitting unreasonable claims for equipment and medical supplies
• Up-coding the level of service provided to enjoy better financial increments

What is Medical Coding Auditing and why do perform one?

The goals of a medical coding audit are to improve the financial health of your practice. These audits evaluate procedural and diagnosis code selection as determined by physician documentation. If any area of weakness is revealed through an audit, one can identify opportunities for training in your health care organization. Audits are the best way to improve your clinical documentation and to determine areas that require improvements and corrections.

Reasons to perform medical coding audits:

• To reveal if there is any inappropriate coding, insufficient documentation or revenue loss
• A proactive step to identify and correct problem areas before any insurance or government payer challenges it for inappropriate coding.
• To resolve issues of under-coding, code overuse, bad unbundling etc and to bill appropriately for documented procedures only.
• To stop the use of outdated or incorrect codes for procedures
• To verify ICD-10-CM and electronic health record (EHR) readiness
• To identify reimbursement deficiencies and suggest opportunities for appropriate reimbursement
• Overall, to protect against fraudulent claims and billing activity

How a medical coding audit process is conducted?

A medical coding audit involves a comprehensive review of medical and hospital records, documents, medical claims, billing histories, provider contracts and fee schedules to thoroughly investigate billing and coding process.

The Auditor documents and presents all the findings of the audit at the end. These audit results must be leveraged by the medical practitioners to develop corrective action plans to improve his/her overall coding and billing practices.

Claims audits are usually conducted annually with a follow-up audit.

Challenges in Auditing:

• Complex Data Analysis: With an enormous number of medical claims in a year, it’s important to choose sample claims with the highest probability for an error. This task of selecting a sample to conduct an audit can be tedious and complex.
• Thorough Review of Medical Record Documentation: Any mismatch of medical records documentation and selection of appropriate codes are termed as false claims and might even be investigated under the False Claims Act. So, the medical records should be complete and legible. An auditor should study and investigate medical records documentation rigorously for not missing any loophole that could direct any irregularities in coding and billing.
• Manual Documentation: There are many healthcare providers who still follow a manual documentation system that is long, cumbersome and time consuming and thus have a high probability of any error.

• Remote Departments and Functions: Many healthcare companies function in isolation, so auditing a medical coding and billing practice can be a tedious process.
• Lack of advanced systems for spotting fraud/abuse: Most of the healthcare practices lack foolproof methodologies for a detailed analysis of medical claims. They often do not use the right tools that alert healthcare providers to irregularities and help eliminate billing errors before and after the claims are paid.

How Coding Audits and Suggestions can help?

Coding Audits help healthcare providers to implement best practices and ultimately strengthens their coding and billing practices. Implementing suggestions of an audit helps to:

• Ensure that a healthcare provider’s operations consistently remain within its acceptable risk threshold.
• Enable healthcare providers to identify a well-integrated training program on claims audit, focused on coding and billing
• Enhance document and data management
• Design and implement appropriate corrective action and preventive action processes, in accordance with the audit findings
• Strengthen strategic decision-making through powerful reporting and analytics that provide valuable business insights.

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Monitoring Scheduling Inefficiencies

A major area of shortcomings which hamper the profitability of a medical practice can be scheduling inefficiencies. Numerous discrepancies while appointment scheduling by medical office like overbooking of slots, miss-managed no show scenarios and allotment of unnecessary downtime among others can bring down the revenues of the business. It’s important the office checks upon the arrival time with the healthcare provider before fixing appointments to help prevent any losses to the business in terms of revenue and reputation. Similarly, seasonal-volume variation in the number of patients and type of health problems is a common phenomenon depending on the geographic conditions and need to be kept in mind keeping scope of adjustment in schedules. It is as important to plan for upcoming peak demand cycles in advance to avoid hassles later. The number of inefficiencies is inversely proportional to the economic prosperity of any medical unit.

Any healthy functioning medical practice lays full attention to scheduling appointments in ways that are beneficial to both care seeker and provider. It’s the basic responsibility of a medical office at any work-oriented healthcare establishment to proceed towards achieving a well-scrutinized and flawless scheduling process so as to maximize the care provider’s productivity, all the while ensuring patient’s comfort.

Hiring Skilled Front Office Staff

In order to realize an optimum level of revenue potential at any medi-aid clinic it’s imperative that the staff recruited at the front office and at back end is skilled enough to tackle the management exercise, paperwork and recurring issues in the most efficient way possible. A number of billing shortcomings can be overcome once the staff at the front desk is trained with the know-how of insurance rules, filing procedures and has experience in dealing with codes. Incorrectly filed claims run high risk of running unpaid and adversely affect the Revenue Cycle Management of any clinic. To maintain good relations with payers and renegotiate managed care contracts, special emphasis needs to be laid on training of staff. It thus is important that only dedicated and trained individuals are employed at the medical offices so that they can help to increase the profitability of the business.

Devising Health Management Programs

Being ‘healthcare’ business medical establishments have the privilege of insight into the health patterns prevalent in their vicinity at any given time. This unique awareness of statistics and figures about the kind of diseases people are most prone to, general health risks that run in the geographic boundaries and other important information makes medical offices agencies fit to device Health Management Programs customized for the locale they are in. Access to health data analytics of local patients equips medical offices with knowledge of potential health disasters that might affect the population. With such prescience the offices stand in a profitable position if they decide to run health management programs trying to mitigate the disorders before they become chronic.

Embrace Technology to Enable Efficient Medical Management

With the introduction of Electronic Health Records (EHRs) into the medical management arena, things at the desk front have streamlined themselves and for good. In addition to the monetary benefits that the EHR technology has brought, there have been noticeable improvements in productivity, record keeping at the desk along with enhanced security for patients. More efficient, one man show and less space consuming EHRs are everything a well-established medical business is looking for.

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There are two Components of Pharmacy Reimbursement:

• Dispensing Fee

A dispensing fee compensates the pharmacy for transferring the drug/medication from the pharmacy to the patient, stocking and storing medications and patient counseling. Under the Medicare drug reimbursement system, the pharmacist is paid $2.27 per prescription.

• Prescription Drug Cost

The prescription drug cost component of reimbursement is still in process of being reformulated. Currently, most third-party payers pay for prescription drug costs based on a fixed discount from the AWP, for example: AWP minus 10 percent.

How are the reimbursements processed for Medicare Pharmacy Claim?

The pharmacy reimbursement process can be broken into the following steps:

Receiving the prescription: Whenever a pharmacy receives a prescription, it is important to track its source (i.e. from where the prescription is coming). This is tracked using a prescription origin code (POC). The prescription origin codes are:

• 0= Unknown (when the manner in which the original prescription was received is not known)
• 1= Written prescription via paper (it includes traditional prescription forms and computer printed prescriptions)
• 2= Telephone prescription (one obtained via oral instruction or interactive voice call)
• 3= E-prescriptions (prescriptions that are securely transferred from a computer to the pharmacy)
• 4= Facsimile prescriptions (ones obtained via fax transmission, including an e-Fax where a scanned image is sent to the pharmacy, and either printed or displayed on a monitor/screen)

Patient data entry : It’s important for a pharmacy to gather the patient data such as- name, address, date of birth, contact information, and any other pertinent data related to allergy, insurance name, group number, member number, bank identification number (BIN) etc. Apart from that, in order to process a prescription, following information is required to be entered in pharmacy billing software:

• Prescriber’s name and contact information, medical license number
• Prescription date
• DAW (dispense as written) code
• Third party payer information (if a patient has multiple insurance plans, enter them as primary, secondary, etc.)
• Drug information such as the manufacturer, expiration dates, price, stock availability etc.

Pharmacy claim transmittal: At this point, the pharmacy is ready to transmit the prescription. First it goes through the switch vendor and is either accepted or sent on to the PBM (pharmacy benefit manager). If declined, the pharmacy, the prescriber and/or the patient will need to contact the PBM to obtain approval. If a patient has multiple insurance plans, most pharmacy software systems are capable of performing split-billing.

A prescription can be declined due to:

• a non-covered medication/ a medication requiring prior authorization,
• invalid quantity of medication dispensed
• patient’s insurance is not currently active/ or the details are incorrectly entered
• prescriber’s information is either incomplete/ incorrect
• Third-party payer negotiation: Once the prescription is accepted, the claim is adjusted by the payer. The payer compares the terms of the patient’s benefit plan and the charges and determines what the insurance plan is financially responsible for and what the patient owes. This information is

returned to the pharmacy electronically.

• Point-of-sale: After the medication has been filed and checked, a patient can pick it up after paying the charges (copays, deductibles, or if a particular medication is not covered, then the usual and customary price).
• Payment processing: The insurance companies then send out payments (electronically or by cheque) to the pharmacies every thirty to sixty days for all prescriptions processed within a particular time frame for their pharmacy services. These payments are accompanied by a remittance advice (RA) providing the details about the paid claims.

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