As a pharmacist, it’s important to have a clear understanding of medical billing, especially when dealing with insurance plans. This knowledge helps you better assist your patients and ensure they understand their costs for the services you provide. Here’s a straightforward guide to help you navigate in-network and out-of-network billing along with key terms such as deductible, copays, and co-insurance.
In-Network vs. Out-of-Network
- In Network: If you are in-network with a payer, you are an approved provider of services for their members. As an in-network provider you have a contract with the payer that assures you they will pay you an agreed upon rate for services you provide. It usually means that patients will pay a lower rate for working with you vs. working with an out of network pharmacist. The process to get a signed contract with a payer can take 3 to 9 months.
- Out-of-Network: If you are billing claims as an out-of-network provider, you don't have a contract with the payer. You are not guaranteed any reimbursement from the payer for the service you provide but this doesn't mean you won't get reimbursed.
What a pharmacist should know
Whether you are submitting claims in-network or out-of-network, your pharmacy staff will need to collect medical insurance information for your patients. This is usually different from the pharmacy benefit information your staff is used to collecting.
- When the pharmacy submits a claim as an in network provider the payer will reimburse you for your services at an agreed upon rate that is outlined in your contract. The patient's responsibility is determined by their individual plan.
- Claims submitted as an out-of-network provider are reimbursed at unpredictable rates but these rates can be similar to in network reimbursement. The patient responsibility is variable and we have seen coverage range from 0% - 100%.
- If your out-of-network claim gets denied, you will want to get paid for your services by billing the patient the cash price for the service. If you are submitting claims out-of-network it is a good idea to keep a patient's credit card information on file in case the claim is denied.
- If your out-of-network claim gets denied, you will want to get paid for your services by billing the patient the cash price for the service. If you are submitting claims out-of-network it is a good idea to keep a patient's credit card information on file in case the claim is denied.
- Medical claims do not get adjudicated in real time. It can take 2 to 3 weeks for medical claims to be adjudicated and sometimes longer if the submitted information is incomplete or incorrect. Pharmacies will not see their reimbursement rate and patients will not see their responsibility until the claim has been adjudicated.
- Claims submitted to medical insurance are not subject to clawbacks or DIR.
We recommend keeping a list of providers you are in network with nearby for your staff to refer to when talking to patients.
What to Tell Your Patients
As a service to your patients, you will want to make sure they are aware that medical billing is now happening at your pharmacy. Let them know pharmacists are able to provide services like those provided by their primary care providers or urgent care and, as such, it's important that pharmacists get paid for those services.
The most important thing is for patients to understand their insurance. They need to know how their plan works in the following instances:
- In-network providers
- Copays?
- Deductibles?
- Plan limits?
- Out-of-network providers
- How much does the plan cover?
- What is the patient responsibility?*
Whether you are in network or out of network with a payer, coverage can vary from patient to patient even if they are on the same plan. Always encourage your patients to review their insurance benefits and consult with their insurance provider to clarify any uncertainties.
Medical billing from pharmacists is a new process for pharmacists and patients. Providing clear information and support can significantly improve the patient experience and help them manage their healthcare expenses more effectively.
Key Terms to Know
- Deductible: This is the amount a patient must pay out-of-pocket before their insurance begins to cover any of their medical expenses. For example, if a patient has a $500 deductible, they need to pay the first $500 of the medical costs themselves. Once this deductible is met, the insurance company will start to cover services at a published amount.
Important things to know about deductibles:- Not all patients have a deductible
- Some patients will have separate deductibles for in-network providers and out-of-network providers. Each of these deductibles needs to be met separately depending on the network status of the provider.
- Deductibles start over at the beginning of every calendar year.
- Copay: A copay is a fixed amount that patients pay for specific services regardless of the total cost of the service. The copay can vary depending on whether the pharmacy is in-network or out-of-network.
- Co-Insurance: After meeting the deductible, co-insurance is the percentage of the cost of the service that a patient is responsible for. Co-insurance rates can be higher for out-of-network services.
- Annual Limit: Some insurance plans have an annual limit of the amount they will pay. Once this limit is reached, the patient is responsible for any additional expenses themselves for the rest of the year.