Government or commercial health plan? The pharmacist’s challenge of uncertainty

While an insurance card contains a lot of information and is an important part of the pharmacy transaction, there are times when it doesn’t tell the whole story.

The insurance card indicates only the current plan covering the patient. What it cannot tell the pharmacist is whether or not there is additional coverage, or what specific type of coverage the patient has. Even when the pharmacy sends the claim to be adjudicated by the plan, the messaging returned does not indicate if the coverage is for a commercial or government plan, such as Managed Medicaid.

Helping patients, preventing problems

When a pharmacist knows the available coverage, he or she may be able to reduce a patient’s financial obligation and prevent improper or inadvertent incentives.

The former is important because a patient’s financial situation may significantly impact medication adherence. A recent report, “Adherence and Health Care Cost,” characterized it as “an important public health consideration, affecting health outcomes and overall healthcare costs.” The report estimated between 20% and 50% of patients are noncompliant with drug therapy, and stated that “reducing out-of-pocket costs leads to better medication adherence across many diagnoses.” A recent report in Annals of Internal Medicine estimated that a lack of adherence causes nearly 125,000 deaths, 10% of hospitalizations and costs between $100 billion–$289 billion per year.

Knowing the full extent of a patient’s insurance coverage helps reduce out-of-pocket costs and can lead to better medication adherence and better overall health/outcomes. If a patient only has commercial coverage, a pharmacist can offer any available manufacturer coupons or incentives, such as a promotional gift card.

Moreover, as stories of recent lawsuits have demonstrated, failing to properly determine coverage can result in inadvertent incentives and may lead to financial penalties. According to news reports, within the last five years, two pharmacy store chains had to pay $1.4 million and $7.9 million to resolve allegations that they violated the False Claims Act. Real-life examples of inadvertent incentives can be as simple as improperly using such in-store or company incentives as gasoline discounts and/or drug manufacturer coupons to reduce costs for Medicare patients. Federal law prohibits influencing a Medicare patient’s choice of provider with this type of offer.

Seeking solutions

Finding a solution to identifying complete coverage could improve healthcare outcomes and reduce costs, while allowing patients to take advantage of available incentives to save them money, when appropriate.

LexisNexis Risk Solutions Health Care is exploring the use of socioeconomic and claims data for determining if the patient is on a government plan. Additionally, we welcome collaboration with industry stakeholders to develop solutions that would allow pharmacies to identify the plan type in real time, simultaneously with prescriber verification. We invite state governments, pharmacy benefit managers, health plans and data and analytics vendors to join efforts to ensure pharmacies have full and accurate insight into the patient coverage.  

Until a viable solution is identified and implemented, there are best practices pharmacies employ to determine a patient’s coverage, including:

  • Knowing and engaging the patient to better understand any coverage that patient may have, including commercial, Medicare, Medicaid/Managed Medicaid;
  • Working with the pharmacy’s system vendor to use the BIN/PCN/group designations in the industry to help determine if the coverage is commercial or government when assisting with coupons; and
  • Reporting suspected cases of fraud to the proper authorities.

Bobbie Riley, RPh, is the vertical market lead, pharmacy, at LexisNexis Risk Solutions - Health Care

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