specialty pharmacy billing services
Specialty pharmacies, as the name suggests, are prescription drugs used to treat specific or rare medical conditions that are complex or chronic in nature. These medications are usually more expensive than traditional prescription drugs and require specialized handling. Most medical conditions like cancer, multiple sclerosis, HIV/AIDS, and others require specialty medications for treatment. Additionally, the white and brown bagging models have led to various complexities in the billing process. For this reason, hiring a specialty pharmacy billing company proves beneficial for better handling of white and brown bagging.
Explaining white and brown bagging in specialty pharmacy billing
Specialty pharmacies not only deal with high-cost medications but also the way in which these medications are delivered. The distribution method can affect billing, medication handling, appointment scheduling, and continuity of care. Thus, it is important to know what white and brown bagging stands for before it starts sounding Greek.
White bagging
It is a medication distribution model in which a specialty pharmacy dispenses a high-cost medication directly to the healthcare provider. In this case, the specialty pharmacy bills the patient’s insurance for the prescribed medications.
The white bagging workflow
The provider prescribes a specialty medication for the patient, based on the medical condition.
The patient’s health insurance company sends the prescription to a specialty pharmacy.
The pharmacy dispenses the medication based on the prescription.
The medication is shipped directly to the provider under the manufacturer-required temperature and handling conditions.
The provider receives and stores the medication under favorable storage conditions.
The required medication is matched to the patient, and an appointment is scheduled for administration.
The provider then verifies the medication and administers the medication to the intended patient.
What benefits it brings to specialty pharmacy billing
The white bagging model significantly changes the drug acquisition and reimbursement process. With proper management by a specialty pharmacy billing company, white bagging becomes beneficial in the following ways:
Lower medication acquisition costs – Providers do not purchase the patient-specific medication, although they remain responsible for receiving, storing, and handling it before administration. This reduces the upfront capitals requirements for storing the medications
Reduced financial risk – White bagging reduces the financial risk associated with purchasing high-cost medications that may ultimately be denied coverage by insurance companies. In some cases, the medications might also expire, leading to a financial loss for the provider.
Improved reimbursement predictability – In this model, the pharmacy bills the patient’s insurance company. This avoids the uncertainty of medical benefit reimbursement.
Reduced inventory management – Providers may carry less traditionally purchased drug inventory, but they still need processes for receiving, tracking, storing and matching patient-specific medications.
Alignment with payer requirements – Many insurance companies require certain specialty medications to be purchased from designated pharmacies. The white bagging model helps providers adhere to these payer policies.
Better cash flow – White bagging shifts the financial responsibility for acquiring high-cost specialty medications away from the provider to the specialty pharmacy. This minimizes the need for working capital by decreasing the lag between delivering services and receiving payment.
Brown bagging
Under this model, the patient receives specialty medications directly from the pharmacy. After the medications are received, patients bring them to the provider or infusion center for administration. In brown bagging, the medication is usually billed through the patient’s pharmacy benefit.
How brown bagging works in specialty pharmacies
A provider prescribes a specialty medication for the patient suffering from chronic conditions.
The patient’s health insurance company sends the physician’s prescription to a specialty pharmacy.
The pharmacy dispenses the medication for the patient.
The medication is shipped directly to the patient, including refrigeration.
The patient receives a refrigerated injection at home.
After receiving the injection, they store the medication properly in their refrigerator.
The medication is then brought to the infusion center for treatment.
The healthcare provider verifies the medication and begins therapy administration.
Benefits of brown bagging
A specialty pharmacy billing company ensures proper management of brown bagging model, with which providers receive the following benefits:
Lower healthcare costs – Specialty pharmacies often negotiate lower drug acquisition costs when compared with providers. Insurance companies have high chances to reduce spending by reimbursing pharmacy benefits instead of higher-cost medical benefits.
Improved insurance management – Most of the specialty medications require prior authorization from insurance companies before they are dispensed to patients. Specialty pharmacies have dedicated teams that obtain approvals before providing medications to patients.
Improved patient support – Pharmacies often provide medication counseling, monitors compliance adherence, set reminders, provides financial assistance and clinical follow-up. Enhanced patient support contributes to a better overall care experience and higher satisfaction levels.
Better inventory management – With brown bagging, clinics do not need to maintain large inventories of expensive specialty medications. It also reduces risks of medication expiry, storage costs, and inventory wastage resulting from therapy changes.
Major challenges with white and brown bagging
Like any other model, both white and brown bagging creates several challenges for specialty pharmacies that impact their revenue generation.
Coordination and workflow complexity – The specialty pharmacies, infusion centers, and other providers must coordinate closely. The medications need to arrive at the provider’s office before administration. Any delays in the process can lead to treatments being canceled or postponed. The lack of visibility into shipment status or delivery confirmation can disrupt patient care.
Medication storage and handling issues – Many specialty medications require strict cold-chain management. Improper handling during shipment of medications or transportation of patients may impact product integrity. Most importantly, providers may not have the required space or appropriate facilities for medications. The tracking of medications from pharmacy to administration can have several complexities, making it challenging for pharmacists.
Billing complexities – Insurance companies may have different rules for when white or brown bagging is required. Providers are most likely to lose revenue from medication acquisition if they cannot buy and bill. The medications cannot be shipped until the approval from insurance companies and completion of pharmacy processing.
How outsourcing takes control of the billing issues
Addressing the challenges takes a heavy toll on the in-house billing staff. They are occupied with several administrative tasks which make it difficult for them to work on these challenges separately. This has led to a rise in outsourced billing companies. Third-party specialty pharmacy billing services have the expertise and knowledge to handle the complexities of white and brown bagging, along with the overall revenue cycle management. There are companies that offer benefits like HIPAA-compliant services and up to 80% cost reduction. Choosing a reliable specialty pharmacy billing company not only improves the revenue cycle but strengthens a pharmacy’s financial position in the market.