Managing drug manufacturer and medical rebates at healthcare organizations requires the optimization of interconnected processes in order to ensure positive clinical and business outcomes. This article details the important aspects of rebate management, claims adjudication, and the power of therapeutic interchange programs to enhance formulary adherence.
1) Rebate Management
By capturing pharmaceutical and medical rebates, organizations can reduce their net drug cost and free up vital resources to support profitability and deliver quality care.
Understanding your organization's eligibility to receive rebate revenue is an essential part of rebate management. Review agreements with Group Purchasing Organizations (GPO), partner organizations, and payers before submitting rebate claims to avoid any duplicate submissions.
Rebate Management Outlined
- Collect drug purchase data - Monthly invoices contain information about all drugs purchased or billed within the last month. Analyzing these invoices will help you identify how many are rebate eligible and calculate potential rebate values.
- Collect claims data - For organizations that deliver care (hospitals, LTC facilities, or outpatient centers), medical rebates can be captured for administered drugs. Pharmaceutical rebates also require claims data to ensure the associated treatment was appropriate according to plan benefits and manufacturer rules.
- Create rebate claims - Gather the required information in the correct format and submit it to the manufacturer. Ensuring accurate and compliant rebate claims is essential to maintaining access to manufacturer rebates.
- Collect rebate values - Rebates are often paid out quarterly once claims have been adjudicated to ensure accuracy and no duplicates have been submitted. This is a complex process for manufacturers and payers, but essential to ensure compliance in the industry.
Pharmaceutical rebates can lower net drug costs by 5-10%
For many organizations, rebate management is a time-intensive process that relies heavily on the accuracy of claims data. In addition, each manufacturer may require claims in specific formats.
Most organizations partner with a rebate management service, like Thirdwave RX, to handle data ingestion, claims submissions, and payment passthrough. Unlike other services, we deliver rebates on a monthly basis and automate rebate submissions, thereby delivering an unrivaled, cost-effective rebate solution.
2) The Importance of Claims Adjudication
Adjudicating claims at healthcare organizations ensures the claims being submitted to payers contain accurate information. Doing so lowers workloads for all entities involved in the reimbursement chain-payers, PBMs, and manufacturers.
Organizations that don't adjudicate claims may see higher denial rates due to missing information or incorrect formatting. This can lead to higher workloads on billing departments (retrospective corrections and appeals) and potentially lost reimbursement.
Common Errors Adjudication Can Prevent:
- Incorrect ICD-10 or CPT codes
- Typos in patient information and codes
- Missing or incorrect patient information
- Bundling, downcoding, upcoding, and unbundling errors
- Incomplete patient data
- Duplicate claims
In larger organizations, long-term care operators, health systems, pharmacies, and specialty practices, the need to adjudicate claims in-house becomes increasingly important to support the operational efficiency of the organization.
With claims being adjudicated for correctness before submission, revenue cycles become more streamlined.
When it comes to rebate claims, adjudicating claims data is equally important to ensure they contain accurate data and formatting, and prevent duplicate claims from being submitted. Some platforms integrate with multiple entities to identify instances where a claim has already been submitted for a specific drug or procedure.
Since manufacturers also have to adjudicate rebate claims, doing so within your organization reduces complications for all parties involved. While manufacturer rebates increase drug utilization while lowering net costs, creating undue burdens due to inaccurate or duplicate claims jeopardizes future rebate opportunities.
Real-Time Adjudication Platforms
Real-time adjudication platforms gather required data from EHRs and billing systems to identify errors and missing information before claims are submitted. This is a far more efficient way to adjudicate claims and significantly reduces staff workloads.
Thirdwave RX offers real-time adjudication capable of handling hundreds of thousands of claims daily with unrivaled accuracy.
3) Therapeutic Interchange Programs
In addition to a well-designed formulary, therapeutic interchange programs enable formulary decisions to be enforced across more complex healthcare organizations. When off-formulary medications are prescribed, a therapeutic interchange enables an organization to automatically change the medication to a therapeutically equivalent drug that adheres to formulary decisions or optimizes a specific process.
Implementing a therapeutic interchange (TI) program requires an advanced understanding of state regulations, clinical considerations, and business processes. As such, TI programs tailor medications to individual organizations.
NOTE: Therapeutic interchange programs can only be performed in specific states. To find out if your organization can implement TI tools, contact one of our experts.
TI programs are commonly designed by pharmacy benefit managers (PBMs) and approved by an organization's clinical team. These entities are most familiar with active formulary decisions. Partners like Thirdwave RX have implemented TI programs for health systems and long-term care operators with great success.
As an actively managed process, it is a best practice to delegate this operation to the team that also handles formulary or benefit design. Doing so will ensure the ability to contain excessive costs caused by off-formulary prescribing.
All-In-One Rebate Management
Thirdwave RX offers a complete rebate management platform that ensures comprehensive drug manufacturer rebate revenue and ongoing optimization to lower net drug costs. Our unrivaled expertise and technology help health systems, LTC pharmacies and operators, specialty providers, and mid-market PBMs contain costs and significantly improve revenue opportunities.
Thirdwave RX is a rebate administration solution that helps healthcare providers achieve their lowest net drug cost. Our team of healthcare, pharmacy, and financial professionals solve critical challenges in the healthcare ecosystem. With a proprietary technology stack and proven automation, Thirdwave offers the most innovative rebate product and services on the market.
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