The Importance of a Thorough Benefits Investigation to Help Navigate Medical vs Pharmacy Benefit

Benefits investigation: A review of medical or pharmacy benefits through the patient’s insurance. This identifies the cost to the patient, level of eligibility of the practice or facility to treat, as well as the benefits and requirements of the provider.

Last week a practice told me they obtained a prior authorization for a service they had never provided before. I asked them how the BI looked and how the patient took it. In shock they said, “We do not know what you are referring to.” It is common mistake of practices and facilities to think that a prior authorization is all they need when offering a service. While a prior authorization gives you a sense of safety and confidence that your claim should be paid, the benefits investigation is equally, if not more important. Taking it one step further, we like to combine the steps of benefits investigation and prior authorization, or any other titled insurance review, under the term Pre-Service Review since each step is so vitally important.

If you have ever called an insurance company you have heard the benefit disclaimer: "The information provided is a quote of benefits and is subject to the patient's coverage at the time of service". This can be intimidating but it is a valid warning since medical and pharmacy policies are updated frequently and things or life happen, like a patient changes employers or takes the leap to get married. Best practice recommendation would be to verify coverage for each service you plan to offer your patient and complete eligibility checks prior to each visit. By thoroughly verifying benefits prior to providing a service, you are avoiding costly surprises for your patient and devastating losses for your practice or facility.

General steps and suggestions to follow to help get detailed information:

Step 1: Identify the insurance.

Step 2: Identify the service/therapy and diagnosis.

Step 3: Have the necessary information available to answer representative’s questions. Ex. Physician name, NPI #, Tax ID, Address, Phone #, Fax #, Patient member ID# & Group #, Patient name, DOB, Address, Phone #

Eligibility Questions: What is the effective date? Is there a preemptive termination date? Are there waiting periods or preexisting condition limitations? Is our provider in or out of network?

Benefit Specific Questions: (CPT or HCPCS Code specific): Are there any exclusions or unit limitations for this service/therapy? What are the financial benefits of the service/therapy? (Ex. Copay, deductible, coinsurance, out of pocket) Is a prior authorization required for this service/therapy? If no, can I submit a predetermination for this service/therapy? How do I submit either of those options? How do I locate the medical/pharmacy policy guidelines for this service/therapy online?

Pharmacy Related Questions: Who is the Pharmacy benefit manager for this plan? How do I contact them?

What is the difference between Medical and Pharmacy benefits and how does this impact medication access?

Medical Benefit or “Major Medical”: What most people know simply as their “insurance” or what they have to cover their healthcare costs. Specialty medications can be covered by this benefit or pharmacy benefits, or sometimes both and how the provider chooses to acquire the medication and administer it impacts which benefit ends up covering. Medications covered by this benefit are often times purchased by the provider and administered in office or in an outpatient setting, otherwise known as “Buy and Bill”.

•Covers physician/provider services, supplies, or equipment

•Covers medications administered by a provider or outpatient setting

•Cost is associated with plan deductible, co-pay, or co-insurance amounts

•Billing and reimbursement is post administration

•In-network vs out-of-network benefits

•PPO, HRA, HSA, Flex Cards…

Pharmacy Benefit: Plan benefit that covers medications patients can self-administer at home or have administered at a providers office or facility based on delivery method of the medication (auto-injector, infusion…). Medications covered under the pharmacy benefit can be oral, injectable, infusible, or topical compounded medications such as creams and lotions.

•Pharmacy benefit deductible is separate from medical in majority of cases

•Part D for Medicare beneficiaries

•Formularies are set by Pharmacy Benefit Manager and/or Medical Plan

•Retail Pharmacy: Local pharmacies or pharmacy chains in your area where your medication is called into and you can typically swing by the same day and pick up, i.e. antibiotics, daily medications…

•Mail Order Pharmacy: Ships medication in 90-day supply typically or when supplies are required for administration (diabetes medications). Commonly used for maintenance medications, i.e. blood pressure medications, inhalers…

•Specialty Pharmacy: Medications that require special handling and shipping, often times are kept cold in coolers with ice packs and shipped overnight. These medications are typically costly and have gone through a stringent pre-service review prior to dispense.

•Can be subject to co-payment, co-insurance or frequently follows a tiered system

•Tier exceptions can be requested for Medicare patients and reduce cost, if eligible

•Assignment of benefits can change the benefit medications is acquired or dispensed on

Co-pay cards vs co-pay accumulators: affordability options and assistance for patients is available and can be applied to the benefit that the medication is being billed through. Make sure to research available options and compare to your patients plan to choose the most effective co-pay solution for your patient. Always reach out to your local Field Reimbursement Manager (FRM) for assistance!

-Jordan McCain