When it comes to speeding up the revenue cycle, the hospital pharmacy has its own part to play.
“There are a lot of decisions taking place in the pharmacy that can have an impact on the financial health of the entire hospital,” said Durwin Logan, manager of pharmacy operations at Effingham Hospital in Springfield, Ga.
When Effingham Hospital initially began to look at the pharmacy’s contribution to the revenue cycle, the amount of money involved hit home rather quickly.
For instance, making sure the National Drug Code (NDC) number is correct is vital. “There are a lot of generic medications and the Centers for Medicare & Medicaid Services (CMS) is adamant that they get the correct number on bills,” Logan said. Just four medications with missing codes resulted in about $100,000 in delayed or lost billings. All told, the addition to revenue was around $194,000.
Another area where Effingham was able to increase the amount of money generated was by properly invoicing medications paid on a billable units basis. If there is 100 mg of injectable medication, then you have 100 billable units. Having this information added into the billing system increases revenue and speeds turnover by having the initial bill correct.
“We can also save the hospital money by looking at revenue generated relative to the cost of medications,” said Logan. “Streamlining the formulary by cost and income brings it into better focus. Managing the formulary efficiently, along with billing help, means the pharmacy makes a contribution to the hospital’s bottom line.”
At the University of Colorado Hospital in Aurora, a team approach is used to shorten reimbursement times and error rates. Each group essentially has their own area of expertise with pharmacy management coordinating and helping find and eliminate problems.
“All of our clinical pharmacists look at utilization trends, clinical guidelines and collaborate with our physicians, case managers and other providers to make sure that expensive medications are used appropriately,” said Mary Peaslee, PharmD, clinical pharmacy specialist, managed care at the hospital. “We also keep an eye on patterns that indicate we may be coding drugs improperly or that the charts don’t reflect the information the payers require. We communicate these needs to the appropriate individuals and work to make improvements.”
The Colorado hospital also is reactive when needed. They have a revenue recovery team that assists with appealing claims. They also have a referral team that works mainly to get prior authorizations for outpatients. However, the team can also assist in orderly transitions from inpatient to outpatient care. This not only lessens the chances of payment concerns, but more importantly, means fewer disruptions in treatment during the hand off.
“Here we do a really great job of anticipating which drug is likely to be used and making sure we have the support needed to satisfy our payers,” said Peaslee. “It is a collaboration making sure that the patient gets what they need while also making sure we are paid appropriately.”