November 19, 2004:
Reconciliation of Third-Party Claims
There is an assumption made by pharmacists that when a third-party company electronically accepts a prescription for reimbursement at a specific dollar amount, the pharmacist will receive a check for that same amount. This seems to be a reasonable assumption, but is it true?
The NCPA Foundation
through its Research Grant Program awarded a grant
to explore this issue to researchers at the
University oft Arkansas for Medical Sciences
(UAMS) College of Pharmacy. The researchers found
that initially few of the pharmacies in this study
reconciled their third-party reimbursement
statements and that significant dollars were lost
as a result of not reconciling these claims. The
results of the study are excerpted
Seven independent pharmacies in central Arkansas participated in the study. The pharmacy owners served as clinical preceptors for senior pharmacy students enrolled in a doctor of pharmacy curriculum at the UAMS College of Pharmacy. Students sided in the reconciliation process and data evaluation.
The study evaluated all insurance reimbursement checks received at each pharmacy during a three-month period. When a reimbursement check was received by the pharmacy, the researchers retrieved prescription records for the period covered by the check.
The amounts listed on the pharmacy books as due
and payable by the insurance company (i.e.,
plus any copays from patients, were compared to the amounts actually paid by the insurance company. When discrepancies were noted, the researcher recorded the company name, date, and any differences in dollar amounts. If claims were denied or returned as pending, the reason for the denial or pending status, if stated, was recorded.
Additionally, researchers kept records on the time involved in performing the reconciliation, the average days from billing to reimbursement, and the total number of prescriptions billed to each insurance company during the period of the study. At no time during the study was patient confidentiality breached. The researchers collected no patient-specific data.
Descriptive statistics (e.g., mean and standard deviation) were calculated for all cost information. Claims from 20 insurance companies were reviewed at the seven pharmacies. The total number of insurance claims reviewed was 21,068. The total number of claims with a difference between approved amount and amount paid was 206 (i.e., approximately 1 percent). There was great variation in the dollar amounts of the differences,which ranged from $53.99 in a pharmacy's favor to a $359.30 loss to the pharmacy. However, on average, the pharmacies lost $20.68 + $6.15 (95 percent confidence interval for average difference [CI]) each time a difference occurred (see Table 1).
Payors rarely offered explanation for the differences. Out of 206 differences
examined, reasons were given in only 12 cases
(5.8 percent). When explanations were offered,
they typically could be placed in one of four
categories: a) patient not covered; b) a pharmacy
adjustment; c) an online claim charge; and d) a
point-of-service transaction fee. Obviously,
depending on the reason for the difference, some
of these claims could have been resubmitted for
payment or billed to the patient. Whether or not
the pharmacies rebilled the claims or received any
monies due was outside the scope of this
UAMS students and the authors spent a total of 24.5 hours over the course of three months performing reconciliation activities at the seven pharmacies. The effort translates to each pharmacy needing to spend approximately 1.17 hours or 1 hour and 10 minutes each month performing reconciliation activities.
In Arkansas, the average technician is paid
between $8 and $10 per hour. Therefore, the
average cost per month to perform reconciliations
on claim reimbursements would be $9.35 to $11.67
for a total cost per year of 112 to $140. This is
a very conservative estimate of time and cost
because a ) information collected for this survey
was in excess of the information that would
normally be considered during a routine
reconciliation; b) once the person assigned the
job of reconciliation learned the process, less
time would be required; and c) some idle time
exists for present employees that could be used
performing claims reconciliation, instead of
hiring another person to do these tasks.