According to the Henry J. Kaiser Family Foundation, pharmacies across the country filled 10.5 million prescriptions per day in 2018. Of those, only five percent were paid for without a third-party payer involved. That leaves 95 percent of the average pharmacy’s prescription revenue tied up with private insurance companies and government health insurance programs. That’s a lot of money floating out there. Do you have time to keep track of it? Is claims reconciliation an option?
Of course not. You’re busy filling an average of 200 prescriptions per day. For some of you, it’s even more than that. In some cases, a lot more.
Claims Reconciliation: It’s Time for Your Pharmacy to Get Paid
No business owner wants to leave money on the table. And, while pharmacy owners are in the business of improving the health of their patients and their communities, they’re still in a business. If they want to stay open and continue helping their customers, they have to make sure that business is profitable. And since 95 percent of their prescription revenue comes in the form of reimbursements, the way to do that is with claims reconciliation.
For pharmacies, claims reconciliation sounds simple. It’s merely a matter of tracking claim payments from third-party payers. But it gets more complicated.
Remember that most independent pharmacies fill an average of 200 prescriptions per day. Since 95 percent of those prescriptions are filled through an insurance program, 190 of those prescriptions will require filing a reimbursement claim. That’s 1,330 claims per week to keep track of. Even worse, it’s not merely a matter of connecting the payment to the claim. Often, the insurance company doesn’t pay the entire claim amount. Unless you go through the report line by line, you will never know. But your bottom line will.
In years past, this was a manual process. For many pharmacies across the country, it still is. But it doesn’t have to be.
Better Claims Reconciliation Through Technology
Before reconciling claims became an automated process, it was a matter of going through pages of reports and double-checking numbers. For many pharmacy owners and bookkeepers, it meant a lot of long nights and blurry eyes. The ones who didn’t have time simply hoped the numbers were right and they were getting paid what they expected.
With advances in technology came automation. Why spend time performing a task when a program can perform that same task more quickly and more accurately? Programs don’t get tired. Programs don’t mind doing the same thing over and over. Programs don’t accidentally skip a line in a reimbursement report and throw off hours’ worth of work. Best of all, when you leave this kind of work for software to handle, it frees you up to do the kind of work you wanted to do all along: help your patients.
Taking Action: Follow the (Missing) Money
When working with claims reconciliation software, it’s not just about tracking reimbursements. It should be able to target missing payments and 835 files. It should also be able to find claims reversals, secondary payments, taxes, e-vouchers, copay cards, DIR fees, and other admin fees that could be draining your revenue. Consider it a financial checkup for your pharmacy. Want to know how payment adjustments are impacting your profitability? How much money are you losing to processing fees? This is how you find out.
When you dig deeper into your financial data, it might surprise you. After switching to the Elevate Provider Network, White Cross Pharmacy in Orange County, California used the PSAO’s claims reconciliation software to handle its third-party claims. During the transition, their Elevate Concierge analyst discovered over $100,000 in missing payments from a large payer. “I did not even know the money was missing,” said Dr. Sameer Rakholia, COO and Pharmacist in Charge of White Cross Pharmacy. Sometimes, it literally pays to do a little research.
You can’t help your patients if you can’t keep the doors open. And with 95 percent of your prescription revenue in the hands of third-party payers, you need to do everything you can to hold them accountable and get paid. As long as third-party payers exist, claims reconciliation will continue to be a vital part of your pharmacy business — so make sure you’re doing it the best way you can.