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Mastering Pharmacy Medical Billing + Claims Submission

Your Comprehensive Guide to Effortless Reimbursement in 2024

By James Lott, PharmD

LAST UPDATED 05/16/2024

Everything pharmacists need to know about medical billing and claims.

  • This guide is designed to help pharmacists navigate the complexities of pharmacy medical billing to ensure maximum reimbursement for expanded clinical roles.

  • We explain the transition from traditional pharmacy billing handled by Pharmacy Benefit Managers (PBMs) to the adoption of medical claims submission using Current Procedural Terminology (CPT) codes and Healthcare Common Procedure Coding System (HCPCS) codes.

  • The key components of pharmacy medical claims submission include establishing contracts with payers, credentialing staff, selecting technology partners, and providing comprehensive training.

  • This guide article also highlights essential CPT and ICD-10 codes for pharmacists, outlines the pharmacy medical claims submission process, and provides strategies for overcoming billing challenges to maximize revenue.

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#   OVERVIEW: 3 STEPS TO A SUCCESSFUL BILLING PROGRAM 

#   SECTION 1: ESTABLISH A SOLID FOUNDATION

#   SECTION 2: SELECTING REVENUE-ENHANCING CLINICAL SERVICES

#   SECTION 3: MANAGING THE BILLING PROCESS EFFECTIVELY

#   CHART: ESSENTIAL CPT AND ICD-10 CODES FOR PHARMACISTS

#   WRAP-UP: MASTERING MEDICAL CLAIMS AND REVENUE CYCLE MANAGEMENT

As you know, getting paid for pharmacy care services is pretty important. And with new laws expanding our clinical roles, pharmacists are now able to bill for more services than ever before. But navigating the ins and outs of pharmacy medical billing can be a real head-scratcher. That’s why we’ve put together this guide to help you decode the billing system and make sure you’re getting the dough you deserve. 

In this guide, we’ll dive into the world of medical claims submission, giving you the tools you need to navigate the reimbursement landscape like a pro. We’ll cover everything from understanding the different billing codes to tracking reimbursement timelines. So, whether you’re a seasoned pharmacy administrator or just starting out, this guide is your one-stop shop for mastering pharmacy billing of medical claims.

Demystifying Pharmacy Medical Claims Submission – The Old Way

Pharmacy billing encompasses submitting claims to insurance payers for reimbursement for pharmacy services. These services range from dispensing medications to providing medication therapy management (MTM) and other clinical interventions. 

Pharmacy claims are typically submitted as D.0 billing – This standard is set by the  National Council for Prescription Drug Programs (NCPDP) to bill for (mostly) prescription medications that are dispensed through a PBM.

Traditionally, pharmacy billing has been handled by PBMs, but the increasing focus on pharmacist-provided clinical services has led to the adoption of medical claims submission. 

 

Understanding Pharmacy Medical Claims Submission – The New Way

Medical claims submission involves utilizing Current Procedural Terminology (CPT) codes and Healthcare Common Procedure Coding System (HCPCS) codes to represent the services provided by pharmacists accurately. These codes are how physicians, nurse practitioners, and other providers bill for services. They are standardized and reviewed annually by the American Medical Association. Similarly, the codes are essential for communicating the value of pharmacist-provided care to insurance payers and securing fair and competitive reimbursements.

 

Pharmacy vs Medical Claim Submission (Billing)
FeaturePharmacy d.0Medical Claim Submission
PayerPharmacy Benefit ManagerHealth Plan
Services CoveredPrescription Services, Some Vaccines, Basic MTM servicesClinical Services – Vaccines, Tests, Comprehensive Medication Reviews
Reimbursement RatesLowerHigher
Billing CodesNational Drug CodesCurrent Procedural Terminology (CPT) codes and Healthcare Common Procedure Coding System (HCPCS) codes
Submission MethodElectronicElectronic or Paper
Reimbursement Time< 1 month> 1 month
DIR feesYesNo

 

To ensure the success of an efficient billing program, accurate and timely pharmacy billing hinges on several critical components, including:

SECTION 01:

Establish a Solid Foundation

Begin your medical billing journey by securing contracts with payers, credentialing your staff, selecting reliable technology partners, and providing comprehensive training to your team. This crucial step can take between 3 to 6 months to complete.

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SECTION 02:

Select Revenue-Enhancing Services

Ensure your billing efforts focus on services that generate substantial revenue, align with patient and payer needs, and address service gaps within your community. This strategic approach maximizes revenue and optimizes patient care.

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SECTION 03:

Managing the Billing Process Effectively

Accurately assign appropriate CPT or HCPCS codes to services provided to ensure timely and accurate reimbursement. Employ Revenue Cycle Management (RCM) techniques to streamline the billing process.

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SECTION 01:

Establish a solid foundation

 

A solid foundation for your pharmacy’s medical billing has four key parts:

01:

Payer enrollment

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02:

Credentialing Process

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03:

Technology Partners

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04:

Training

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Payer Enrollment

Pharmacies must establish medical contracts with payers, such as insurance companies and government programs (Medicaid and Medicare), to be reimbursed for their services. The contract is called a “provider agreement”. The process to secure the agreement involves negotiating payment rates and agreeing to the terms and conditions of the contract.


Before seeking a provider agreement, utilizing resources like AHIP (America’s Health Insurance Plans), which offers a comprehensive guide outlining payer market share in each state, is advisable. This valuable information can help you identify which payer networks you should prioritize joining. Additionally, consider the patient populations you serve most frequently in your community, particularly for employer-sponsored or local health plans. Directly contact these plans to inquire about enrollment procedures and eligibility requirements.


Another essential factor is whether the plan allows pharmacies to join their medical network. In many states, such as California, Texas, and Washington, laws have been enacted to mandate the enrollment of pharmacists into health plans. If you encounter challenges joining a network, consider approaching physicians in your area or MSO groups to explore potential strategic partnerships.

Credentialing Process

Pharmacists and other pharmacy staff who will be providing services that are reimbursable through medical claims must be credentialed with the appropriate payers. This process involves verifying their credentials and ensuring they meet the payers’ requirements.

The process for completing the credentialing requirements and the turnaround for being credentialed can be extensive. It usually takes 2-4 months to be credentialed by a payer. The specific requirements may vary depending on the payer and the pharmacist’s specialty, but they typically include the following:

  1. Education and Licensure: Pharmacists must have a Doctor of Pharmacy (PharmD) degree or equivalent from an accredited institution. They must also be licensed to practice pharmacy in the state where they apply for credentialing.

  2. Experience: Payers may require pharmacists to have a certain amount of experience in a particular practice setting or with a specific patient population before they will grant credentialing.

  3. Training and Certifications: Pharmacists may be required to complete additional training or certifications in medication therapy management (MTM), immunizations, or diabetes management.

  4. Malpractice Insurance: Pharmacists must carry malpractice insurance to protect themselves from liability claims arising from their practice.

  5. Background Check: Payers may conduct a background check on pharmacists to verify their identity, education, and licensure and to identify any criminal or disciplinary records.

  6. Professional References: Pharmacists may be asked to provide professional references from colleagues or supervisors who can attest to their qualifications and performance.

  7. Annual Re-credentialing: Pharmacists must typically re-credential with payers every one to four years (depending on the payer) to maintain their in-network status. This may involve updating their information and providing documentation of any new certifications or training they have completed.

A tool that streamlines the credentialing process is CAQH. CAQH, which stands for the Council for Affordable Quality Healthcare, is a non-profit organization that aims to improve the efficiency and effectiveness of the healthcare administrative system by standardizing processes.

CAQH Proview is an online portal allowing providers to create and maintain a comprehensive profile of their professional and practice information. This profile can then be shared with multiple payers, eliminating the need to submit the same information repeatedly.

CAQH can be a valuable resource for healthcare providers looking to improve their credentialing. It can take some time to complete the credentialing, so it’s always recommended to begin this process as soon as possible.

Technology Partners

Pharmacies should select technology partners to provide the software and systems to manage medical claims submissions. This includes software for billing, coding, and claims tracking. Traditional EHR and EMR systems used for physicians may not meet the pharmacy’s needs due to the pharmacy’s unique workflows or billing needs.

Training

Pharmacists and pharmacy technicians should be trained to accurately code and submit medical claims. This training should cover the different types of claims, the appropriate codes for each service type, and the submission process.


Because pharmacy medical claims submissions usually relate to a limited set of billing codes, it may be worth exploring the establishment of a customized in-house training program tailored to your pharmacy’s specific needs and requirements.

If you cannot develop an in-house training program, websites like AAPC (free and paid courses), and Udemy (free courses), might be an excellent place to educate your pharmacy staff.

SECTION 02:

Select Revenue-Enhancing Clinical Services

Identify reimbursable services

Pharmacies need to identify the services they provide that are reimbursable through medical claims. This includes services such as medication therapy management (MTM), immunizations, acute and chronic care services (i.e., test to treat, smoking cessation, wellness visits, etc.,), and comprehensive medication reviews

Evaluate service demand

Pharmacies should evaluate the demand for reimbursable services in their community. This can help them determine which services to focus on and which may not be worth pursuing.

Align services with payer requirements

Pharmacies must ensure that their services align with the payer reimbursement requirements. This includes understanding the payers’ coverage policies and coding requirements.

SECTION 03:

Managing the Billing Process Effectively

Utilize appropriate CPT or HCPCS codes

Pharmacies must use the appropriate CPT or HCPCS codes for their services. Payers use these codes to identify and classify medical services. 

It’s important to note that codes may vary by each health plan, contract, and region.

Submit claims accurately and electronically

Pharmacies need to submit claims accurately and electronically to payers. This includes providing the required information and ensuring the claims are formatted correctly.

Track claims status and reimbursement

Pharmacies need to track the status of their claims and follow up with payers if necessary. They should also keep track of reimbursement rates and ensure they are being reimbursed correctly.

Stay informed of regulatory changes

Pharmacies must stay informed of any changes to medical claims regulations. This includes changes to coding requirements and payer policies.

Essential CPT and ICD-10 Codes for Pharmacists

ServiceCPT CodeICD-10 Code RangeDescription
Immunizations90460 – 90474Z23Immunization administration for vaccines/toxoids. Community pharmacists may use these codes when providing vaccinations to patients.
Comprehensive Medication ReviewsVarious E/M codesVariousPharmacists may use Evaluation and Management (E/M) codes, such as 99213 or 99214, for comprehensive medication reviews. Relevant ICD-10 codes should align with the patient’s condition.
Medication Therapy Management99605, 99606No specific ICD-10 code is requiredCPT codes 99605 and 99606 are used for medication therapy management services provided by pharmacists. These codes reflect face-to-face patient encounters.
Acute Care Visits and Services99202, 99212VariousPharmacists engaging in acute care visits, test to treat, vaccines, smoking cessation, Pep, and Prep services may use E/M codes such as 99202 and 99212. These codes reflect comprehensive assessments and management during patient encounters.
Point-of-Care TestingVariesVariousWhile not strictly CPT codes, pharmacists may use specific codes or identifiers for point-of-care testing services, depending on the type of test performed.
Health ScreeningsVariesVariousDepending on the specific health screening service offered, pharmacists may use relevant CPT codes for billing purposes. Common codes vary based on the screening type.

Need more info on CPT and ICD-10 codes?

We go deep into specific detail on each of these code varieties and what they mean for your pharmacy on our Ultimate CPT and ICD-10 Code Breakdown. 

Check out our Ultimate CPT and ICD-10 Code Breakdown for Pharmacies

Understanding the claims submission and revenue cycle management process

The pharmacy billing process follows a step-by-step sequence:

 

  1. Patient Encounter: The pharmacist meets with the patient to verify insurance coverage (and eligibility), assess their needs, and treat them appropriately for the encounter while ensuring appropriate documentation.

  2. Coding and Claim Preparation: The pharmacist assigns appropriate CPT or HCPCS codes and generates a claim form. Documentation is typically necessary for audit and purposes.

  3. Claim Submission: The claim is processed electronically to the insurance payer.

  4. Reimbursement Processing: The insurance payer reviews the claim and determines the reimbursement amount.

  5. Payment Reconciliation: The pharmacy receives payment from the insurance payer and reconciles it with the submitted claim.

Addressing Billing Challenges

Pharmacists often encounter challenges during the billing process, such as:

  • Coding Errors: Incorrect coding can lead to denied or delayed reimbursement.

  • Claim Submission Errors: Improper claim submission can result in rejected claims.

  • Payer Denial: Insurance payers may deny claims for various reasons, such as insufficient documentation or lack of coverage for the service.

Strategies for Success

To overcome billing challenges and maximize revenue, pharmacists can adopt effective strategies:

  • Coding Accuracy: Employ coding references and stay updated on coding guidelines to ensure accuracy.

  • Timely Claim Submission: Submit claims promptly to minimize the risk of reimbursement delays.

  • Thorough Documentation: Maintain detailed patient records and prescription documentation to support claims.

  • Appeal Denied Claims: Appeal denied claims with appropriate documentation and justification.

WRAPPING UP:

By mastering medical claims and revenue cycle management, you can expand pharmacy revenue on the services you perform.

As pharmacists expand their clinical roles and provide comprehensive patient care, navigating the complexities of pharmacy billing becomes increasingly important. This guide has equipped pharmacists with the knowledge and strategies to effectively manage pharmacy billing,


Scripted is the Best Pharmacy Billing Software for Seamless Medical Billing

This guide is designed to help pharmacists achieve any medical credentialing and billing goals they have. But you should know: Scripted makes everything in this guide vastly easier!

Scripted is as a game-changer in the pharmacy billing landscape, offering a comprehensive solution to streamline the process and enhance revenue capture.

Scripted’s user-friendly interface simplifies claim submission, reduces coding errors, and automates claim follow-up, freeing pharmacists to focus on patient care.

Bring medical claims submissions to your pharmacy

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