Part Four: Increase Transparency in Your LTC Pharmacy Relationship to Ensure Compliance
If you have been following our series on improving transparency in your long-term care (LTC) pharmacy relationship, you understand that LTC facilities have a number of opportunities to lower pharmacy costs through increased transparency. Drug manufacturer rebates are one of the key areas where complexity and lack of transparency can not only cost you money, they can get you in hot water with the Centers for Medicare & Medicaid Services’ (CMS) regulations governing reimbursements on rebates.
As with any area of compliance, a full understanding of both the regulations as well as the consequences of failing to comply are critical. For LTC operators to remain compliant, they need to understand the following:
- As the payer on Medicare Part A claims, LTC operators are eligible to submit and receive rebates.
- CMS requires discount cost reports that need to correspond to the right census and claim counts.
- Compliance is audited by CMS with failure to comply resulting in reprimand and fines.
The best way to stay compliant is to fully understand the regulations or to have trusted partners with the expertise to protect operators. The following are some areas that can assist LTC operators in improving processes or pharmacy relationships relating to compliance.
Rebate Submission Eligibility and Ownership
Rebates are a key way that LTC operators can offset pharmacy costs. Without understanding what drugs are rebate-eligible and who is submitting those rebates for reimbursement, operators risk becoming non-compliant and subject to fines. The first step to ensuring compliance is making sure you are 100 percent sure of who is submitting rebates on your behalf. Claims are recorded by manufacturers. If you are receiving notifications from manufacturers of duplicate submissions, someone is likely submitting claims on your behalf without your knowledge. As the payer on Medicare Part A claims, LTC operators are eligible for those rebates and need to be fully aware of the terms and conditions of pharmacy or third-party partners that may be submitting rebates on behalf of the company. Terms that govern submission of rebates are typically buried in detailed contracts that blur transparency, and make it difficult for operators to determine what portion of a rebate (if any) that’s eligible. If you are not receiving manufacturer rebates, you may be unaware of how to submit rebates, and/or another party may be submitting and receiving rebates rightfully owed to the facility.
Demand Transparency in Pharmacy and Partner Relationships
Securing transparent contract terms requires operators to be educated and understand the implications of clauses and terms. Another area where you should be looking and asking for clarification is around fees for services. One way TPAs avoid full transparency is by layering the vendors providing services and syphoning off fees at every added layer. Doing your due diligence with regard to standard and reasonable fee and pricing structures is critical not only to maintaining a transparent relationship, but also to controlling pharmacy costs. Good partners will have pricing structures that protect operators and their interests. Understand what you are paying for, and make sure you are getting added value from your pharmacy partner relationships.
The best way to avoid non-compliance is to accurately document rebate claims, submissions, and payments. Use an automated technology solution that identifies all eligible claims on your bills and submits rebate claims to drug manufacturers. Technology is the only way to lock in agreed upon terms and conditions and guarantee that reports and analysis are comprehensive and accurate. The right technology solution is key to streamlining your rebate submission process, maximizing rebates, and creating transparency in your pharmacy relationships.
These small steps can make a huge impact for operators looking to better control costs and maximize rebate dollars while remaining compliant. The right processes, partners, and technology should increase transparency in your pharmacy relationships and help facility operators and administrators better understand the details driving contract terms, costs, and outcomes.
Key questions to ask your pharmacy partners:
- Where are my claims going?
- What other legal entities are involved in the claims process and what are they being paid for providing services?
- How is rebate claims data being captured and reported and do we have access to that data?
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