Inside: Don’t let IOUs from insurance companies and other providers slip past your notice. Master the third-party reconciliation process for a fatter wallet.
Only about 5 percent of pharmacy patients pay for their medications in cash, according to a 2018 study by the Kaiser Family Foundation.
That means the other 95 percent of the prescriptions you dispense are being paid for by a third party like Medicare, Medicaid, or private insurance.
With so many reimbursements being made after the fact, you have to stay on top of reconciling claims. If you don’t, remittances will begin to pile up, and it becomes difficult to know who owes you money for the services you’ve provided—and how much.
In order to keep your pharmacy in business, make certain you’re getting paid what you’re owed.
Making a Plan for Reconciling Claims Is Worth Your Time
If you are documenting all of your reimbursement claims on the fly, you’re most likely missing out on potential profits. By making a concerted effort to organize this element of your finances, you’ll see returns in more than one aspect of your business.
It Saves You Money…
Tracking each and every one of your third-party claims may be a pain, but neglecting it leaves money on the table. Unpaid claims mean you’re losing revenue, and without a method to the madness, you may not even know when you’re missing reimbursement checks.
Addressing third-party reimbursements without an efficient system in place isn’t good for the long-term financial health of your pharmacy, but it also can make you suffer in the short term.
When you are consistently collecting your third-party payments, you’ll have more reliable cash flow.
…And Time
Accurate record-keeping, while it may seem tedious in the moment, will also save you time.
By knowing who owes you what and when you can expect money to come in, you don’t have to spend your energy tracking down individual reimbursements.
With a proper paper trail, you’ll know which third parties are reliable and which are likely to be late on their payments, allowing you to become efficient in your reconciliation efforts.
How to Make Reconciling Easy
It may seem like a gargantuan task, but once you get organized, third-party reconciliations don’t have to be so formidable. Take these steps to make the process a seamless part of your business.
Keep Accurate Records
Organization is key to staying on top of your third-party reconciliations. Bad records mean mistakes, which mean lost money.
It’s not as simple as tracking what money has come in. Here are the things you should be documenting:
- Which filled prescriptions have a third-party claim attached to them.
- Which claims have been filed, and which need to be.
- Which claims have been paid, and which remain unpaid.
- If a claim has been paid in full, or only partially.
Knowing where you stand will make your reconciliation process a whole lot simpler.
Find Missing Money
One trick insurance companies might play is to pay a partial amount of the claim you submitted instead of the full amount. By not doing a line-by-line analysis of your third-party payments, there’s a big chance that they could get away with it, leaving you in the lurch.
When you’ve gotten your documentation in order, you’ll be able to see clearly who owes you money.
Be dogged about chasing those unreconciled claims down—there could be tens of thousands of dollars in missing payments.
Automate the Process
Just like most other parts of your pharmacy business, technology can aid you in your reconciliation efforts.
There are lots of programs that can make third-party reconciliation easier. A good solution will decrease your workload by speeding up the process, and should also integrate into your current pharmacy software.
A service that uses 835 electronic remittance files is best. That’s the industry standard method for receiving and processing claims, and it will ensure clear communication with everyone you work with.
Conduct Audits
You run your pharmacy knowing there’s a chance you could be audited by entities you do business with. Though the looming threat can be frustrating, it helps keep you on your toes.
Turn the practice on its head by auditing your third-party payers in return. If you aren’t being correctly compensated, let them know you’ve noticed that behavior, and you’re keeping an eye on them.
Audits help hold third parties to account. By regularly verifying that they’ve paid you what they owe—and showing them proof when they haven’t—you’ll send a clear message that you’re not a pharmacy to stiff.
Outsource It
If even after streamlining your process, third-party claims reconciliation feels too time-consuming or overwhelming, there’s another option: using a reconciliation service.
These services use two different payment models, and it’s important to understand the difference. A “central pay” model means that PBMs send reimbursement money to a firm, who then pass it onto you.
If adding another middleman into the mix doesn’t seem appealing, services with direct pay could be a better option for your pharmacy. In this model, the payments go straight to you.
Because you’re dealing with a complex process that has a lot of money on the line, questions are inevitable. Look for a service that makes it easy to get in contact with a real person who can provide support for any issues that arise.
Other perks offered by reconciliation services could include:
- Secure claims data
- Overnight processing
- Protection from billing and database errors
- Tracking for claims reversals and other fees
- Reports on individual carriers
- Alerts when discrepancies occur
Choosing a service could be difficult, but considering these elements alongside the needs of your pharmacy will help you settle on the right one for your business. The end result should always be less time spent agonizing over line items and tracking down missing payments.
A Member-Owned Company Serving Independent Pharmacies
PBA Health is dedicated to helping independent pharmacies reach their full potential on the buy-side of their business. Founded and owned by pharmacists, PBA Health serves independent pharmacies with group purchasing services, wholesaler contract negotiations, proprietary purchasing tools, and more.
An HDA member, PBA Health operates its own NABP-accredited secondary wholesaler with more than 6,000 SKUs, including brands, generics, narcotics CII-CV, cold-storage products, and over-the-counter (OTC) products — offering the lowest prices in the secondary market.
