Private Payers Coverage
Private payer coverage for drugs and services varies by the specific payer, the plan, and the benefit type. Most insurance plans offer a medical benefit. The medical benefit covers services such as physician office visits or hospital care. Healthcare provider-administered drugs can be covered under the medical or pharmacy benefit for the plan, depending on plan design.
A majority of Americans with private health insurance receive their coverage through employer sponsored plans. The type and level of benefit coverage will vary among patients as this is dependent on how "restrictive" or "generous" an employer is in making this benefit available to their employees and dependents.
Pharmacy-dispensed drugs are typically covered under the pharmacy benefit. Private payers may outsource pharmacy benefits to a pharmacy benefit manager (PBM). If private payers use a PBM, the PBM is responsible for handling all coverage, claims, and payment issues associated with pharmacy services, and often for developing formularies to manage utilization of drugs. For drugs that are covered as a pharmacy benefit, certain aspects of coverage and patient cost share may be driven by formulary status.
Some private payers impose utilization management techniques like prior authorization or specialist referral requirements to administer coverage parameters. Ensuring that your practice adheres to required processes like prior authorization and referral procedures are critical to managing coverage successfully and obtaining appropriate payment.
Private payer plan design also dictates how the healthcare provider or patient can access the drug. For example, plans may permit the healthcare provider to purchase drugs administered in the office or require that the provider obtain the drug from a specialty pharmacy distributor. Pharmacy-dispensed drugs may be available at retail pharmacies or patients may be required to order them through a specialty pharmacy.
It is important to understand patient-specific
benefits and coverage guidelines that may apply to the service being
provided to the patient. You can call
Private Payer Payment
Private payers employ various payment methodologies but often pay for services based on mechanisms like contracted rates, capitation, or percent of charges. Payment for drugs may be based on average wholesale price (AWP), wholesale acquisition cost (WAC), invoice cost, average sales price (ASP), or a percentage of Medicare. Depending on the payment methods used by the payer, providers may or may not receive separate payment for physician-administered drugs in addition to services provided. It is important to know what is in your payer contracts so you know how payers will pay your practice or facility for drugs and services you provide to patients.
