Companies offer plan to cut 'pay and chase' for Medicaid pharmacy claims

Two companies are launching an initiative to help state Medicaid programs save money by avoiding the manual recovery of pharmacy claims from commercial insurers.

The proprietary program, developed by Affiliated Computer Services and RxHub LLC, enables pharmacies to identify pharmacy benefit coverage at the point of sale using ACS' prior authorization solution in real time and St. Paul, Minn.-based RxHub's master patient index. The process enables almost instantaneous identification of any coverage by commercial insurers and enables pharmacies to bill them instead of the Medicaid program.

Typically, state Medicaid agencies spend millions trying to recover payments when recipients have other insurance coverage.

Federal law requires that commercial insurers pay before Medicaid pays on claims of recipients who are also covered by Medicaid. Because so many pharmacy transactions take place on paper, it's difficult to determine if Medicaid recipients also have coverage under commercial insurers when they receive care.

After state Medicaid agencies retrospectively determine that a potentially liable third party exists, they must either try to avoid those costs or resort to a "pay and chase" approach in which the agencies pay recipients' medical bills and then attempt to recover whatever portion of the claims they are owed by commercial insurers.

ASC and RxHub officials say this process is complex, can take months, and yields a small percentage of the millions of dollars to which state programs are entitled.

"This program could eventually eliminate the need for 'pay and chase' pharmacy recovery programs in all state Medicaid programs," said J.P. Little, chief operating officer of RxHub.

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