Posted on March 15, 2020 in: Professional Practice
Vishnuprabha D. Vogel, Pharm.D., BCOP, BCPS, pharmacy manager, Henry Ford Health System
The juxtaposition of the rapidly evolving healthcare environment paired with increasing volume of exponentially expensive pharmaceutical agents requires proactive establishment of pharmacy revenue integrity (PRI) framework, policy and procedures. Ensuring optimal PRI requires oversight of steps throughout the revenue continuum (Figure 1). While many strategies are frequently employed to optimize revenue capture, there are a few common challenges faced by healthcare systems:
PRI optimization requires interdepartmental integration. This article provides considerations for each of the steps in the revenue continuum to optimize PRI.
Procurement Optimization and Formulary Management
The foundation of PRI starts with procurement optimization and strategic formulary management. While most organizations belong to a group purchasing organization and monitor expenses on a routine cadence, the opportunity lies in the ability to agilely switch to a lower cost, comparable product. Similarly, as alternatives, generic products and biosimilars enter the market, it is vital to leverage contracting opportunities.
Charge Data Master (CDM) Accuracy
As drug utilization changes, pharmaceutical CDM should be updated with the most accurate information. In addition, implementation of regulatory changes to ensure revenue capture requires continuous monitoring (i.e., requirements for National Drug Codes (NDC) on Medicare/Medicaid claims). Pharmacy departments may or may not have direct responsibility in maintaining the CDM.
Authorizations and Medical Necessity
Securing authorization requires proactive assessment depending on the type of care: acute, subacute or elective. The process includes completing a benefits assessment and submission of required forms. One challenge is that the benefits and the requirements not only change from payer to payer but within different plans under the same payer. Furthermore, some payers, including CMS, do not offer upfront authorizations. In addition, for those requiring authorization, securing authorization does not guarantee reimbursement. Thus, for all J-codes utilized, securing the authorization and validating medical necessity is necessary. The combination of the technical expertise of pharmacy technicians (i.e., vials sizes, dosage forms, etc.) and clinical expertise of pharmacists add tremendous value to a revenue integrity team.
Site of Care
In efforts to minimize expenses, many payers have established site of care policies requiring specific infusions be administered in a free-standing infusion center or via home infusion. In theory, the utilization of these alternative sites should result in lower healthcare expenses. However, for those institutions without free-standing infusion services, transitioning patients completely to home infusion, might result in a negative margin. Each institution should complete a financial assessment comparing revenue generation to expenses to determine whether to continue to offer these services or coordinate care with an external entity. Furthermore, site of care policies are continually evolving and require prospective monitoring.
Billing and Coding
Inconsistencies and errors with billing units, diagnosis codes, charge data master, etc. can lead to compromised revenue capture. The accuracy of billing and coding is optimized when there is a strategic integration of interdepartmental workflow established between pharmacy, finance and information technology. Many institutions are faced with multiple systems that do not interface and cannot cross reference misaligned variables in the billing process. For example, comparing the volume billed with units purchased or situations where reimbursement is lower than expenses. Regardless of whether manual, automated or combinations of both are implemented, the inclusion of pharmacy into finance processes optimizes revenue capture.
Key factors contributing to denials include manual processes, billing and coding errors, variability from payer to payer, increasing complexity of the authorization process and medical necessity expectations. While the primary goal is to minimize the denial rate by optimizing factors discussed above, formalizing a role for pharmacy in the denial appeals process and investing strategically in analytics/software that can integrate denials information is essential.
In summary, PRI optimization requires a robust approach involving interdepartmental integration. All opportunities discussed above are symbiotic with the overarching goal of providing the highest quality care at the lowest expense. It is imperative to leverage analytics, technology and automation into process across the pharmaceutical revenue continuum.