Specialty drugs are complex and expensive. They usually require special storage that is not available in general pharmacies. People with severe health conditions like Cancer, Multiple Sclerosis, Rheumatoid Arthritis, Psoriasis, Hemophilia, Hepatitis C, etc. need to consume specialty medication.

Moreover, the demand for specialty medicine is gradually growing. In 2023, the specialty pharmaceuticals market was valued at around $92.50 billion, and it grew $129.23 billion in 2024. Market experts speculate it will reach $965.54 billion by 2030 at a 39.80% Compound Annual Growth Rate (CAGR).

Challenges Associated with Specialty Pharmacy Billing

However, the high-cost, complex nature of specialty drugs and the intricate reimbursement process make billing pretty challenging. So, what complexities are associated with specialty pharmacy billing and how can we address them?

Patient Eligibility and Coverage Verification

Verifying insurance coverage and patient eligibility for specialty medicine is complex. Moreover, dual eligibility (Medicare/Medicaid) of patients makes it even more challenging. As any mistake in verifying patient coverage will directly lead to claim denials. Thus, resulting in specialty pharmacies with hindrance in cash flow that will affect the revenue cycle.

Solution:

Billing specialists must thoroughly ensure whether the prescribed drug is covered under the patient’s insurance plan. It requires in-depth expertise and utmost precision. Moreover, they must check eligibility when a patient switches from Medicare Advantage to traditional Medicare mid-treatment. In such a situation, specialty pharmacists may hire outsourced billing experts as they have a thorough knowledge of the entire process.

Complex Prior Authorization Requirements

In most cases, specialty medicine requires prior authorization (PA) from insurance payers. Medication Access Report published in 2020 refers to the fact that 37% of specialty drug prescriptions faced PA denial. This high PA denial rate not only affects the patients due to the unavailability of medications on time but also hinders the cash flow of specialty pharmacies.

Solution:

Pharmacists must take extra care to eradicate PA denials. They must collect accurate patient information and submit detailed documentation of medical necessity, patient history, and therapy justification. They must submit PA requests as soon as the patient visits the pharmacy for quick approval. Moreover, they must eliminate the common errors that lead to PA denials.

Accurate Coding and Documentation

Specialty pharmacists need to tackle intricate billing, coding, and documentation requirements. About 20% of specialty pharmacy claims are initially denied due to documentation and coding errors. As a result, pharmacists face a significant revenue loss due to delayed reimbursement. Also, it notably increases patient's out-of-pocket expenses as well.

Solution:

Coders in specialty pharmacies must have in-depth and updated knowledge of CPT and HCPCS Codes. High-cost drugs like monoclonal antibodies require specific modifiers and units. Moreover, they must submit all-inclusive documents that validate the medical requirements of every prescribed specialty medication. To ensure accuracy, pharmacists must train their staff from time to time. This way, they will stay updated regarding coding and documentation requirements and reduce denials.

Regulatory Compliance and Audits

The healthcare industry is heavily regulated by authorities like HIPAA, CMS, and others. Non-compliance results in 15-20% claim denials. Moreover, specialty pharmacies face heavy penalties and audits due to non-compliance. It hampers their operational efficiencies and overall patient care.

Solution:

Specialty pharmacy billers must regularly follow all billing, coding, and documentation updates by regulatory authorities. Here, the knowledge and expertise of professional specialty pharmacy billing services offer the best assistance. They have dedicated staff with a comprehensive knowledge of regulatory compliance. Hence, they can eradicate billing errors and ensure the specialty pharmacy will get timely reimbursement.

Employ Outsourced Specialty Pharmacy Billing Services to Tackle Rising Complexities

Outsourced specialty pharmacy billing specialists are usually more efficient than in-house staff. They possess dedicated and in-depth knowledge of medical codes, documentation, and regulations. Hence, they can guarantee 100% billing accuracy. Moreover, in case of denied claims, they can rectify the errors and resubmit within a record time. So, the specialty pharmacist gets maximum reimbursement from payers.

Furthermore, in-house staff are generally 80% more costly than third-party billing specialists. They look after the comprehensive administrative workloads of pharmacists. It allows pharmacists to improve their inventories, so they can offer more specialty drugs to patients. This way, specialty pharmacists can seamlessly maintain a healthy cash flow and patients will get their medication almost immediately.