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 below.


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., approved amounts),

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 study.

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.