Author: Jennifer Brink, Product Lead, Net-Rx™
What is split billing?
Split billing, in pharmacy, is the process of submitting a single claim to multiple payers for combined reimbursement. When a patient has dual coverage, a coupon card, or is entering/leaving a facility – the billing procedure changes (and then is considered split billing). Split billing can introduce many subtle but complex scenarios that can result in reimbursement issues and delays. The extra time to process and complicated coding (such as other coverage codes) impacts the pharmacy workflow and reimbursement.
As a Pharmacy Technician, the main goal, is to provide patients with the medication they need in a timely manner. Processing prescriptions quickly to get medication out the door is ideal for patient satisfaction as well as pharmacy workflow efficiencies. Beyond some typical things that could slow down the process of billing prescriptions (such as rejections, formulary restrictions, inventory challenges, eligibility issues), the intricacy of split billing and the associated coverage codes make it even more complex. Split billing takes additional time to process and includes complicated coding that can unexpectedly impact reimbursement. It is important to review claims before, during, and after adjudication especially in a split bill scenario for accuracy to help reduce underpayments/losses, retroactive adjustments on your claim, and copay/deductible changes for the patient. When you bill every claim correctly to begin with, or use pre edit technology to help ensure claim accuracy, it saves time for everyone, and your billing expertise and consistent results will undoubtedly impress your Pharmacy Manager and help your pharmacy’s profitability.
There are different types of split billing including 340B, secondary coupon cards, Coordination of Benefits (COB), or even Med-A (facility/hospital) split billing.
• When a pharmacy claim must be divided between 340B eligible areas and the inpatient or hospital charges, a claim can be 340B split billed.
• Coupon cards are common in retail pharmacies but are not eligible with Medicare Part D reimbursement. A coupon card, or a pharmacy discount card, is usually a free card that allows the patient to save a little extra on certain medications. Some are marketed by drug manufactures and some are offered by companies or other commercially available organizations. It is important for a pharmacy to ensure they reconcile coupon card claims to ensure they do not have negative impact.
• Coordination of Benefits refers to the fact that you are billing the same prescription and expecting a cost share arrangement when there is more than one active coverage. The primary insurer pays a portion and the secondary pays any remaining amount, in most cases to help eliminate or lower the cost to the patient. Although COB is generally used when one of the payers is Medicare D, it is also referenced when there is more than one active Commercial Insurance for a patient, or even Medicaid in addition to Med D or Commercial.
• With Med-A split bills, the payment arrangement is between coverage for a hospital/facility and the normal prescription insurance. When the patient is discharged/admitted or moves to/from a facility – the prescription quantity remaining must be billed to the alternative coverage. NCPDP defines Submission Clarification Code 19 as “Split Billing - Indicates the quantity dispensed is the remainder billed to a subsequent payer when Medicare Part A expires. Used only in long-term care settings.” In many cases, the Medicare A invoices are not adjudicated, so this code is utilized to tell the prescription coverage payer when the quantity being billed is the remaining quantity.
The coding that is required for any type of split billed claim can be complicated and difficult to understand. It can even be different for each payer. Formulary conflicts between two plans can also impact this process. To get the medication to the patient who is waiting, you want to get the claim paid as fast as possible. It can be tempting to enter override codes that may be accepted but could result in inaccuracy; however this can lead to underpayment and potential losses.
When a patient has secondary insurance coverage and a claim is being split billed, the pharmacy technician and/or the billing team needs to understand other coverage code definitions and ensure they are applied correctly. Ensuring that the other coverage code is accurate ensures the patient’s pay amount is correct, to alleviate any retrospective updates for the patient. To help take the guess work out of it, here are the available other coverage codes, which should be populated in field 308-C8, as applicable:
• 0 = Not specified by patient (used when the pharmacy cannot verify additional insurance beyond the primary)
• 1 = No other coverage (used when the pharmacy has verified there is no additional insurance coverage, beyond the primary)
• 2 = Other coverage exists – payment collected (you billed the previous insurance who accepted and returned a dollar amount as payment to the pharmacy)
• 3 = Other coverage billed – claim not covered (you billed the previous insurer but they rejected – using this code will ensure the rejection codes are sent to the subsequent payer)
• 4 = Other coverage exists – payment not collected – (you billed the previous but they did not return a dollar amount in their response (possibly 100% copay))
• 8 = Claim is billing for patient financial responsibility only (primary insurance was billed and replied with an accepted response. This code is used if the subsequent payer requests patient copay only)
As you can see, communicating claim information to the downstream payer(s) when split billing can affect the patients’ copay amount. Other Coverage Codes are not the only codes critical for accurate billing. Here are some additional fields that affect your patients and your claims:
• 337-4C Coordination of Benefits/Other Payments Count
• 338-5C Other Payer Coverage Type
• 339-6C Other Payer ID Qualifier
• 34Ø-7C Other Payer ID
• 443-E8 Other Payer Date
• 353-NR Other Payer – Patient Responsibility Amount Count
• 351-NP Other Payer - Patient Responsibility Amount Count Qualifier
• 352-NQ Other Payer - Patient Responsibility Amount
Each Payer publishes a payer sheet that is based on the NCPDP standards for prescription coding. When you are trying to get your claims paid so you can fill prescriptions quickly, there is little time to reference payer sheets. Therefore, it is important to know the coding required for split billing up front and how it impacts your claims.
Changes in a patient’s insurance coverage can cause additional challenges in the billing workflow. When resubmitting a claim from one insurance and/or facility to another (split billing), it is crucial that you recalculate or update the pricing on that claim. For example, from Med A facility to Med D, or even Med D to commercial, if this step is not completed (or is completed incorrectly), an inaccurate AWP, gross amount due, or total amount billed may be submitted to the secondary payer, causing inaccurate reimbursement. It is easy to forget this step but it is critical for proper reimbursement. If this is part of your workflow, or better yet built into your pre edit solution, your claim is better equipped for smooth processing.
Each pharmacy dispensing software may recalculate or update split bill pricing differently. So, this step in the billing process may be initiated at different times and in different ways. Sometimes it is initiated by pressing the space bar or “Tab” within the prescription editing screen. Some dispense systems have a button to “re-calculate” or “update pricing”. Others require you to re-enter the prescription quantity and press “Enter”. It is important to know how your pharmacy software works and what steps need to be taken between each stage or step in your prescription billing process. If you are unsure, or just need some expert guidance, ask your Net-Rx analyst. If your dispensing software isn’t updating the pricing when you shift from facility pay to PBM, or from one payer to another, reach out to your software vendor’s support team to ensure you are following the best practices for that system. Also confirm that your software system is updated regularly, to ensure it is operating properly. Software updates are important not only for security patching but also for other operational and regulatory updates.
Split billing does have its complications. As a pharmacy technician, a biller, or even a pharmacy manager, accurately completing each billing transaction associated with a prescription, especially during split billing, is essential for a smooth and efficient billing function and a profitable pharmacy. There are manual ways to mitigate issues, or better yet, a technology solution such as a pre & post edit check can save pharmacy staff time, while optimizing reimbursements and ensuring the patient has an accurate copayment.
To learn more about the when to use pre-edit and post edits, read “Prescription Claim Billing – Benefits of a Pre and Post Edit Solution.”
This post is related to:Claims Processing & Reconciliation