Third-party reimbursement

JM Ganther, DH Kreling. Effect of a change in third party reimbursement rates on prescription gross margin. J Am Pharm Assoc 39(3) 346-3 52, 1999. 

Discuss the history of third-party reimbursement for prescription drugs and its impact on pharmacy management. 

Evaluate the financial impact of third-party reimbursement on the pharmacy using an average net profit comparison, a differential analysis, and a pro forma analysis. 

OVERVIEW OF THE IMPACT OF THIRD-PARTY REIMBURSEMENT IN PHARMACY... 

A significant concern in pharmacy is the level of reimbursement specified in these contracts. In 2000, the average third-party reimbursement for a prescription was 15 percent lower than what a patient would pay for the prescription without third-party reimbursement (USDHHS, 2000). This difference may have increased in recent years because third-party payers have continued to decrease their reimbursement rates. There also are substantial differences in reimbursement rates across third-party payers. For example, many state Medicaid programs reimburse at far better rates than private third-party payers. 

Lower third-party reimbursement combined with higher third-party cost of dispensing means that average net profit is lower for third-party prescriptions than for private-pay prescriptions. This implies that pharmacy owners and managers need to evaluate carefully the financial impact of accepting third-party contracts. Tools for this evaluation are discussed later in this chapter. Pharmacy managers also need to consider many nonfinancial factors when making a third-party contract decisions, and these factors will also be discussed in this chapter. 

CONCLUSION AND FUTURE THIRD-PARTY REIMBURSEMENT ISSUES... 

A third-party payer issue that will continue to be important is declining reimbursement rates. Private third-party reimbursement rates are likely to continue to decrease. Medicare prescription drugs plans now are... 

GantherJM. 2002. Third-party reimbursement for pharmacist services Why has it been so difficult to obtain and is it really the answer for pharmacy J Am Pharm Assoc... 

For the pharmaceutical industry, it is ironic that attention to these special populations is now proving good business , either because of an extension of protected patent life, or because of the development of special business units. These units have increased market penetration and retention of drugs for third-party reimbursement and allowed niche dominance. The latest of the four major special populations rulings by ICH, the final rule on Acceptability of Foreign Data, was implemented in July 1998. While it is the latest, it will... 

American Diabetes Association (2014) Third-party reimbursement for diabetes cate, selfmanagement education, and supplies. Diabetes Care 37(Suppl 1) S118-S119... 

Financial issues are major barriers to entry into mental health programs. Financial barriers include (1) a lack of insurance coverage for children and their families, (2) differential rates of third-party reimbursement for mental health versus physical health problems, and (3) a family s restricted access to preferred providers. Not surprisingly, families from low-income households are much more vulnerable to these financial barriers than higher-income groups. It is estimated that 11 million children under the age of 18 years are not insured (Children s Defense Fund, 2001). A very h percentage of these children live in families with income levels well below the federal poverty threshold (Children s Defense Fund, 2001). 

---