Healthcare executives need look no further than the pharmacy department to drive new revenue.
[Historically], the pharmacy department historically is one of a hospital's greatest cost centers. Most improvement efforts focus on reducing cost. However, pharmacy can also be a major contributor to revenue — with little upfront investment. Consider that pharmacy can provide support services to decrease length of stay, manage medication through collaborative practices, and facilitate appropriate medication reimbursement.
Capturing full and appropriate reimbursement in the pharmacy is challenging. Frequent pricing changes, new drugs introduced to the market, outdated charge description masters (CDM) and missed charge capture can contribute to missed pharmacy revenue.
However, pharmacy also presents ample opportunity to streamline processes and enhance revenue to drive the bottom line. Anita Groves McAllister, director at Prism Healthcare Partners, shared with Becker's Hospital Review three tips for healthcare executives looking to optimize pharmacy revenue capture.
1. Many times, data integrity is the greatest barrier to improved pharmacy revenue capture, Ms. Groves McAllister said. For example, making sure bills have the correct National Drug Code is critical to proper coding, charge capture and reporting.
Other data-related challenges include incorrect coding of drugs (procedure and revenue codes), incorrect multipliers (determines billing units charged), and improperly reconciling pharmacy purchasing data with charge capture data.
2. Eliminating data errors should be a top priority for pharmacy, operations and revenue cycle leaders. Implementing an effective charge capture process that bridges data gaps can help improve pharmacy revenue capture. Three ways to improve data integrity are:
- Integrate pharmacy data, including purchase history, formulary, CDM and pricing data
- Update CDM information
- Establish a governance structure for ongoing review and maintenance
3. By making a few upfront investments, health system leaders can see significant ROI in terms of increased pharmacy revenue and improved compliance. Ms. Groves McAllister recommended organizations invest in the following:
- Technology and tools to support pharmacy, operations and revenue cycle staff in proactively identifying and correcting issues during charge capture.
- Link the pharmacy procurement/inventory management system with the organization's billing system to streamline reconciliation and quickly identify disconnects in inventory and charges.
- Create a multidisciplinary management team of representatives from pharmacy, finance and clinical staff to monitor and maintain processes, such as timeliness of CDM changes, effective communication plans, and quality checks for accuracy.
Conclusion
A challenging political and regulatory environment is putting pressure on hospital finances. Healthcare providers are struggling to maintain positive operating margins amid decreasing government reimbursement, increasing drug prices, growing drug shortages and rising cost of care. Because drugs account for a significant portion of hospital spending, pharmacy plays an important role in a health system's financial performance. As such, improving pharmacy charge capture through revenue enhancement services can have an outsized affect on an organization's bottom line.