T3: Third Party

Question 1

What is a third party?

Answer 1

An organization that reimburses a pharmacy or patient for all or part of the patients prescription drug costs

Question 2

What are the types of third party payers?

Answer 2

Public and Private

Question 3

What are private TPP?

Answer 3

1. Usually an insurance company.
2. May be a manufacturer or other discount program.

Question 4

What are public Public TPP?

Answer 4

Government entities that pay for prescriptions through a government program.

Question 5

What is medicare?

Answer 5

the government program that provides health insurance for the elderly and disabled, implemented a voluntary Medicare Part D program in 2006.

Question 6

What is Medicaid?

Answer 6

funded jointly by federal and state governments, with each state determining its own prescription drug reimbursement rates.

Question 7

What are PBMs?

Answer 7

Provide prescription claims processing and other services

Question 8

What type is the most TPP?

Answer 8

Private but more recently it has shifted toward public

Question 9

What is difference between pharmacies and TPP?

Answer 9

1. Pharmacies determine the price they want to charge private pay patient
2. TPP is determined by a contract between the third party and pharmacy

Question 10

Describe TP prescriptions?

Answer 10

the pharmacy staff must verify patient eligibility, submit and reconcile claims, wait for payment, and comply with third-party rules and requirements, such as formularies.

Question 11

What are the benefits of TPP?

Answer 11

1. Require that patient obtain their prescription from a network pharmacy, or they may allow patients to use non-network pharamcies
2. May have preferred pharm network within broad network

Question 12

What do pharmacies choosing to be a preferred pharmacies obtain?

Answer 12

Additional prescription volume, but usulally at the cost of lower reimbursement rates

Question 13

What is a service benefit plan?

Answer 13

The patient may pay the pharmacy a predetermined portion of the prescription cost, but the pharmacy is reimbursed directly by the third party for most of the prescription cost

Question 14

What are third party reimbursements?

Answer 14

1. Payments are based on a reimbursement-rate formula that is specified in the contract between the pharmacy and the third-party payer.
2. Product cost + dispensing fee

Question 15

Most third-party contracts state that the reimbursement rate for a prescription of what lower prices?

Answer 15

1. The price of from the reimbursement rate formula
2. The usual and customary pharmacy prices

Question 16

What is Actual acquisition cost (AAC)?

Answer 16

The price that the pharmacy pays the drug wholesaler or manufacturer to obtain the drug product.

Question 17

What is Average actual acquisition cost (AvAC) or (AAAC)?

Answer 17

An average of the prices paid by different pharmacies for drug products. Must be determined via pharmacy survey.

Question 18

What is average manufacturer price (AMP)?

Answer 18

The average price received by a manufacturer from wholesalers for drugs distributed to the retail class of trade.

Question 19

What is average wholesaler price (AWP)?

Answer 19

A list price for what drug wholesalers charge pharmacies. This is an overestimate of what the wholesaler actually charges the pharmacy.

Question 20

What is Estimated acquisition cost (EAC)?

Answer 20

The third-party’s estimate of what the pharmacy pays the drug wholesaler or manufacturer.

Question 21

What is Generic drug utilization rate (GDUR)?

Answer 21

The percent of prescriptions at a pharmacy that are dispensed with a generic drug. Also called generic dispensing rate.

Question 22

What is is Generic effective rate (GER)?

Answer 22

The average third-party reimbursement rate for generic prescription drugs across all generic drug products.

Question 23

What is Maximum allowable cost (MAC)?

Answer 23

The maximum cost that the third party will pay for a multisource drug. This typically is an average of the generic drug price from several manufacturers.

Question 24

What is Wholesaler acquisition cost (WAC)?

Answer 24

A list price for what pharmaceutical manufacturers charge drug wholesalers. This is an overestimate of what manufacturers actually charge wholesalers.

Question 25

What is the bank ID number (RX bin)

Answer 25

used to identify how a prescription drug will be reimbursed and where a pharmacy can send a reimbursement claim to

Question 26

What is the processor control number (Rx PCN)?

Answer 26

secondary identifier that may be used in routing of pharmacy transactions. A PBM/processor/plan may choose to differentiate different plans/benefit packages with the use of unique PCNs

Question 27

What is the group number (Rx group)?

Answer 27

your employer identification number. Health insurance providers assign a GRP number to each employer plan.

Question 28

Describe the PBM money flow route?

Answer 28

Question 29

What is ID number/member Id/Subscriber ID?

Answer 29

patient specific. May end with a different number if coverage includes more than one person (person code).

Question 30

How many prescriptions have been filled by paying third party?

Answer 30

89%

Question 31

Describe third part rejections (TPRs)?

Answer 31

1. Resolving these rejections takes time and effort 2. Communicating the status of a patients rejected prescription is another opportunity to build trust

Question 32

What are the types of common TPRs?

Answer 32

1. Prior authorization (75) 2. Non formulary item (MR) 3. Refill too soon (79) 4. Plan limitations exceeded 5. Cost exceeds maximum 6. Submit to primary (41)

Question 33

What are prior authorization?

Answer 33

1. Requires documetation from prescriber 2. May take several days to resolve 3. No guaranteed approval 4. May have higher copay

Question 34

What communications are used during prior authorization?

Answer 34

5. Communicate with prescriber via fax, phone, or electronic message. Communicate with patient/caregiver in their preferred method.

Question 35

What do non formulary item require?

Answer 35

1. Requires changing medication. 2. Patient/Prescriber may be able to submit an appeal. 3. Often alternatives will be presented.

Question 36

What communications are used for non-formualry item?

Answer 36

1. Communicate with prescriber via fax, phone, or electronic message. 2. Communicate with patient/caregiver in their preferred method.

Question 37

What are required for refill too soon?

Answer 37

1. Requires setting a prescription to fill on a future date. 2. Insurance may allow for overrides in special circumstances.

Question 38

What communications are involved with refill too soon?

Answer 38

Communicate with patient/caregiver in their preferred method.

Question 39

What is required when plan limitation exceeded?

Answer 39

1. Requires a change in quantity/days supply. 2. Rejection screen should indicate what amount will be covered within a specified time period.

Question 40

What is required for cost exceeds maximum?

Answer 40

1. May require an override. 2. May require a change in quantity/day supply.

Question 41

What is required to submit to primary?

Answer 41

1. Patient has another prescription insurance company. 2. May require patient reaching out to both companies.

Question 42

What communications are involved with plan limitations exceeded?

Answer 42

Communicate with patient/caregiver in their preferred method.

Question 43

What communications are involved with cost exceeds maximum?

Answer 43

1. Communicate with prescriber as necessary. 2. Communicate with patient/caregiver in their preferred method.

Question 44

What communications are involved with submit to primary?

Answer 44

Communicate with patient/caregiver in their preferred method.

Question 45

How do we resolve TPRs?

Answer 45

1. Rx accepted/entered at pharmacy 2. Insurance company returns a rejection in real time 3. Inform the patient/caregiver 4. Notify prescriber and provide guidance for next steps 5. Communicate outcome to patient/caregiver