Imagine, you are a practitioner working in a hospital, and you need a specific medication namely “Afinitor” to treat a cancer patient. Now if you take the medicines from the hospital pharmacy, then they will charge a 200-300% markup charge, which can increase insurance claim charges. This is where brown bagging comes to play, but the question may be, what is brown bagging? Brown bagging is the process whereby specialized medications are dispensed by an external specialty pharmacy and shipped directly to a patient who then transports it to the clinic for administration.

But how does brown bagging help specialty pharmacies? Simply it increases opportunities for pharmacies to have increased cash flow as these bills fall under the pharmacy benefit claim and not the medical benefits. Under this model practitioners can only charge for their administration services and specialty pharmacies claim for the medication dispensed, bypassing the traditional buy-and-bill hospital markup. However, it has extensive amounts of challenges and navigating the same requires expert help. This is why specialized medication providers often hire a specialty pharmacy billing services who have in-depth understanding of such intricate billing nuances.

How does brown bagging billing in specialty pharmacy work?

Brown bagging in specialty pharmacy requires billers to follow a highly structured billing workflow. Some significant steps include:

1. Prescription and prior authorization - During the first step, providers prescribe a specialty medication, and the pharmacy receives the invoice for the same. The specialty pharmacy is required to conduct all billing regulations, including insurance eligibility verification, prior authorization, patient registration, and so on.

2. Pharmacy work - After all these, the pharmacies source and verify the medication under strict handling requirements.

3. Shipment of the medication - Now the medications will be shipped directly to the patient, or it can be picked up by patients from the specialty pharmacy. The patient then transports the medication to the doctor’s clinic where it is administered.

4. Billing through pharmacy benefit - As also hinted above, under this system, the medication bill will be processed through the pharmacy benefit and not the medical benefit. Essentially, the medication will be billed to the patient’s pharmacy insurance plan and not the hospital purchase system. Thus, these specialty pharmacists will also have to manage the complicated requirements of pharmacy benefit billing including prior-authorization, coding, proper documentation, and so on.

Navigating such intricate billing steps requires dedication and precision as even the most errors can lead to claim delays and denials. This is why hiring specialty pharmacy billing services is necessary to ensure effective management of these administrative tasks.

Brown bagging vs. buy-and-bill model

There are significant amounts of differences among these two, as they are fundamentally district. Firstly, under brown bagging the claim is processed under pharmacy benefit, whereby the buy-and-bill model ensures medical benefit. Simply put, under brown bagging, providers can only claim reimbursement for administration services, while the medication amount will be reimbursed to the pharmacy under the patient’s pharmacy insurance plan. This way, brown bagging reduces revenue for healthcare providers but increases cash flow for specialty pharmacies.

Benefits of brown bagging for specialty pharmacies

Brown bagging opens new opportunities for revenue generation for specialty pharmacies. For example.

• Unlike the traditional "buy-and-bill" model where physicians purchase and bill for the drug, brown bagging allows the specialty pharmacy to dispense and bill the medication directly. It allows them to keep the revenue within the pharmacy's operations.

• Brown bagging facilitates the transition of specialty drug claims from the medical benefit to the pharmacy benefit. This allows for more centralized management of high-cost medications by payers and their specialty pharmacy partners.

Challenges of brown bagging

Despite such tremendous benefits, there are several challenges and risks to this system. To begin with, delays in patient care can happen due to logistical issues. Coordination issues among providers and pharmacies can arise which can further escalates matters. However, the most significant challenge is the billing complexities faced by specialty pharmacies. For example,

• Billers will have to navigate the complex pharmacy benefit billing rules to ensure proper specialty of pharmacy revenue cycle management.

• Some of the common requirements will include insurance eligibility verification, prior authorizations, submitting proper documents, coding, and so on.

• Another complex nuance here would be the NDC vs. HCPCS/J-Code billing. For example, brown bagging generally relies on the use of NDC (National Drug Code) for pharmacy claims; however, the buy-and-bill system is known to use HCPCS/J-codes for medical benefit claims. This way, the NDC billing is tied to pharmacy benefit rules, while J-codes follow the medical benefit guideline. Thus, identifying such varying norms is essential.

Understanding all these complex nuances requires expert help, and this is why hiring professional specialty pharmacy billing services becomes necessary.

Optimize brown bagging billing in your specialty pharmacy with the right outsourced partner

While having an internal billing team allows more control over the billing process, outsourcing offers far more lucrative advantages. For example, RCM solution companies like SunKnowledge have expertise handling specialty pharmacy related client billing software like the RXNT, which helps with automated prescriptions and billing solutions. Secondly, these companies have extensive experience with claim submissions and rejection management. For example, RCM solution providers like SunKnowledge submit 70-75 claims and manage 80-100 rejected claims per day.

Lastly, it is noteworthy to mention that these companies like SunKnowledge, usually charge as low as $7/hour for their services. This makes outsourcing specialty pharmacy billing services a more cost-effective solution than having an internal team.

Are you also struggling with brown bagging billing in specialty pharmacies; then outsourcing expert specialty pharmacy billing services can be resourceful.