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Third Party billers’ practices

Several industry sources have provided additional insights into third party billers, their billing practices and the fallout from same.
One apparently well-informed source provided additional detail on the billing practices relative to U&C, noting:
“…As far as the U&C discussion goes the only consideration given by the TPB is what the pharmacy is reimbursed. TPB’s contracts usually state the pharmacy is reimbursed the lesser of U&C or a contracted amount… As you can imagine the TPB’s profit margins increase dramaticaly when the U&C pricing is used to reimburse the pharmacy and then billed at fee schedule or the selected amount billed for non fee schedule states. I do not know the exact percentage of pharmacy reimbursements that calculate from U&C but I can assure you that it is somewhere in the neighborhood of sixty to seventy percent of the processed prescriptions for TPB’s if not higher.” See the full comment .
Another industry expert referred me to the ongoing Texas Mutual – Third Party Solutions litigation. Apparently the suit, filed several years ago by Texas Mutual, was ruled upon by the Texas Appelate Court early in 2005. TM’s contention was that the third party billers are not medical providers and therefore coudl not avail themselves of the administrative process; TM lost at the appellate level. For more information on the specific allegations made by Texas Mutual, read the entire article on TM’s website (above).
The Court ruled narrowly on Texas Mutual v. Eckerd et al, determining that TM first had to exhaust the statutory process as all billing issues must be addressed through the established administrative process. The case is now before the Texas Supreme Court.
I have been in conversations with third party billers recently, and hope to get their perspectives shortly. If and when those conversations occur, I’ll report on them if the parties are amenable.
What does this mean for you?
If you are a WC payer, PBM, or third party biller, quite a bit. This year may well see a sea change in this industry, one that will have significant implications for years to come. And with Rx in WC accounting for 12% of the medical spend, these implications will gain importance over time.

Joe Paduda is the principal of Health Strategy Associates



A national consulting firm specializing in managed care for workers’ compensation, group health and auto, and health care cost containment. We serve insurers, employers and health care providers.



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