Copays are used by insurers to sensitize patients to the cost of their medications and give patients financial incentives to reject medications that are not medically necessary or add little to no value to their treatment. PBMs require pharmacies to collect patient copayments in full and any deviation from that practice may be considered fraudulent behavior, with limited exceptions. Medicaid claims, where pharmacies are unable to withhold medication if a patient cannot pay their copay, and copay waivers for indigent patients (refer to the December 2023 Newsline article Best Practices for Financial Hardship Waivers for more details) are two of the most common exemptions.
All pharmacies should have policies and procedures in place to collect copayments in full, and retain proof for an audit. Nowadays, many pharmacies use sophisticated point of sale systems which make it relatively simple to provide an auditor with evidence of a payment by check, cash, or credit card (although additional documentation may be required). Many point of sale systems are also integrated with the pharmacy dispensing software and offer accounts receivable (i.e., house charge account) capabilities, which some pharmacies utilize. Allowing patients to charge their copays to a house account can be beneficial because it:
- Is a service which could set your pharmacy apart from competitors, especially big-box and chain stores
- Allows patients to make one monthly payment, which may be ideal for those on a fixed/limited income
- May prevent a delay in treatment because it could allow a patient to pick up their medications when they are needed even if they will not have the money available to pay the copay until later in the month
While there are several benefits to providing house accounts, there can be a downside to using them as well; including the effort required to collect on them. Auditors are also suspicious of pharmacies using house accounts, as there have been “bad actors” who have used phony house accounts to “hide” patient copays by charging them to the house account with no intent of collecting payment. In essence, they are using the house account to provide a kickback to the patient by waiving their copay.
If your pharmacy offers house accounts, it is critical you have a robust policy and procedure in place for how those accounts are managed. Consider the following:
- Which patients will be eligible?
- What credit limit will be set?
- How often will you attempt to collect on the accounts? (PAAS National® recommends monthly statements.)
- At what point will you freeze a patient’s account if they fail to pay down their balance?
- What type of documentation will you maintain to prove you attempted to collect (e.g., logged phone calls, dated invoices, etc.)?
- How will you capture the payment to the house account to prove the balance is being paid down?
- Can you produce an itemized report that shows payments received and outstanding balances on the account which may be requested in the event of an audit?
- House account policies and procedures must be in place long before an audit (i.e., Caremark will NOT consider efforts to collect if the first documented effort occurred after the audit was initiated!)
- If you have additional questions, give us a call at (608) 873-1342 and a PAAS National® analyst would be happy to provide additional guidance
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