Pharmacy Billing for Clinical Services - Part 1

You’ve probably noticed headlines in states like Maryland, North Dakota, and Wyoming: expansions to pharmacists' ability to bill for medical services. But how do you move from news headline to daily workflow?

Recent laws are enacting a long-held goal for the pharmacy community, recognizing pharmacists as providers through Medicaid and managed health insurance issuers, including reimbursement and inclusion in medical networks.

But after cheering a well-deserved victory, the first question to ask is: how does a pharmacist actually do this? We’ll provide some answers here.

How does medical billing differ from pharmacy claims?

To begin, there are definite similarities in pharmacy and medical claims. For both, key questions are:

  1. Is this patient covered? (Do they have active coverage? Have they met their deductibles?)
  2. What is the service in question (prescription/vaccine/testing)?
  3. Is the pharmacy/pharmacist in the patient’s insurance network?
  4. What does it cost (The real-time price – pharmacist’s reimbursement and cost to the patient)?

The pharmacy claims process for RedSail customers, for example, involves submission from the pharmacy management system > through the PowerLine® claims switch > to the pharmacy benefit organization, and back again.

A pharmacy claim has these attributes:

  • Real-time
  • Reversible
  • Includes eligibility and claims submission in a single transaction
  • Trusted adjudicated rates
  • Contracting possible through pharmacy services administrative organizations (PSAOs)
  • Uses the NCPDP® pathway

While still involving the four key questions above, the medical claims process is more complex. Pharmacies would submit a claim from their pharmacy management system > to a medical clearinghouse (for both eligibility and claims) > to the medical benefit organization (again, both eligibility and claims), and back again.

Traditional medical claims billing only addresses some of the important questions of a given claim. The process verifies patient active coverage and deductibles but does not often confirm that the service is covered or that the pharmacy/pharmacist is in network. It also does not help with real-time price (pharmacist’s reimbursement and cost to the patient).

A medical claim has the following attributes:

  • Eligibility and claims submission are separate events
  • Generally non-reversible
  • Requires separate contract from pharmacy contract
  • Eligibility generally does not check all eligibility requirements
  • Uses X12 pathway, not NCPDP

To successfully provide the clinical services that fall under medical billing, pharmacists need to know what price to charge and what they’ll be reimbursed. They also need to reconcile paid claims and manage rejected claims. That’s why some companies in the market are seeking to better help pharmacists submit medical claims to payers and get fuller answers to the previously mentioned four key questions.

How to submit a medical claim

Some programs, like those provided by RedSail Medical Billing (by TransactRx), seek to mimic the pharmacy claims process with medical claims. With medical eligibility and this program’s checks and edits, important information is determined during claims submission: for patients, diagnosis requirements; for services, that it’s a known covered service, specific CPT codes to use, reimbursed price, and % cost to the patient after the deductible. And for providers, known network inclusion.

This way, the medical claims process for a RedSail customer can look like this: get connected to the payer (generally called credentialing/contracting) > connect with your medical billing organization > submit the claim.

Key steps toward a medical contract through credentialing

When it comes to credentialing and contracting, it helps to think of the requirements as “declaring yourself” and “describing yourself.” To begin, you’ll need to declare that you and your pharmacy offer clinical services.

For Medicare, enroll as a pharmacy and independent laboratory. RedSail Medical Billing can help with this. Note that this is not a Mass Immunizer enrollment.

If you’re not sure how you’re currently enrolled, visit the Medicare Revalidation List. You’ll be given a Medicare ID number or PTAN. For other payers, visit the payer website and complete the initial provider enrollment form to get started.

When credentialing and contracting with payers, you’ll need to describe yourself, including your expertise as a pharmacist/pharmacy.

You can describe yourself in two ways: with taxonomy codes attached to your NPI number and via Council for Affordable Quality Healthcare (CAQH, which allows insurance companies to use a single, uniform application for credentialing).

For your organization, you’ll only need to describe yourself through the taxonomy codes. When billing for clinical services, you’ll also need to describe yourself. You’ll need both an organizational and individual NPI, because most insurances will require an individual NPI. The National Plan & Provider Enumeration System (NPPES) is the place for you to add or modify your NPIs.

Find out how you’ve described yourself so far at the NPPES NPI Registry. Update your NPI taxonomy codes for both your organization and yourself. For example, when billing diabetes education, update your taxonomy codes to Diabetes Educator (163WD0400X). You may be rejected by networks if you don’t describe yourself properly through your NPI.

To summarize:

  • Declare yourself: Enroll properly with Medicare and complete initial forms with other payers.
  • Describe yourself: Update NPI taxonomy codes for your organization and yourself and get the CAQH profile started.
  • Get connected: Connect with a medical claims processor to submit claims and ensure enhanced eligibility.

Remember the foundational requirements of credentialing and contracting will be required regardless of the clinical service you choose to implement in your pharmacy, so now is the time to start laying the groundwork.

Coming soon: Part 2 will address how to use immunizations as a primary driver for clinical services, billing considerations for other types of clinical services, and workflow best practices, including a paperless experience.

Written by:
Emily Smith
Product Marketing Manager, RedSail Technologies
Emily Smith

Emily loves to learn and connect ideas in new ways, with a focus on customers' needs and empathy for their challenges. In her role as RedSail product marketing manager, Emily educates on innovation and encourages its use to improve pharmacy care.

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