Over a 9-month period of working with our client, Pathstone was able to drive $5.56M in recurring revenue enhancements.
A large 4-campus health system in the southern region recognized the need for external support to identify and implement sustainable solutions to increase & maximize revenues within pharmacy. Pathstone was initially engaged to conduct a full-scale business case to identify opportunities within the pharmacy space, of which, 3 specific areas of pharmacy revenue cycle were moved to implementation.
Initial opportunity was identified at over $3.0M in recurring annual value through focusing on the following workstreams:
- Rx Strategic Pricing: Restructuring pharmacy pricing methodology to be more transparent, more easily maintained and make up lost revenue during the client’s transition to charge on administration.
- NDC Cost Update: Optimizing NDC cost updates through an evaluation and mapping of the current drug update processes and current technology capabilities.
Rx Revenue Capture: Maximizing the revenue simultaneously improving on missed revenues
Pathstone formed a comprehensive team of stakeholders throughout the organization consisting of key leaders and operational owners within: Pharmacy, Revenue Cycle, Finance and Supply Chain. Recurring touchpoints with this team and other subcommittees generated the necessary momentum and buy-in to achieve maximum value and sustainable success.
Pathstone’s original business case gave excellent insight into the historical performance of this client, but ever-changing regulations and innovations made it necessary to garner new and refreshed data around billing & claims detail, charge master, drug database, revenue & usage, wholesaler catalog(s) and other policies and procedures.
Within each of the identified 3 workstreams the Pathstone pharmacy consulting team utilized a collaborative approach to tailor a solution that fit within the client’s department and organizational goals and objectives:
Rx Strategic Pricing
- Meet net revenue goals by modifying markups and/or to include within annual increase in budgeted revenue
- Mitigate lost net revenue during transition to charge on admin
- Transition to charge on administration
- Create strategy to modify markups to meet net revenue goals
- Increase collaboration with Rx, care contract management and rev cycle
- Simplify charges with increased transparency and defensibility
NDC Cost Update
- Sustainability and maintenance of drug cost database
- Streamline technology and database updates to optimize daily, weekly, monthly, quarterly and annual drug update processes
- Evaluate other opportunities to optimize technology related to the drug database and revenue cycle
Rx Revenue Capture
- Identify and recoup missed revenue on specific drugs
- Complete full audit of pharmacy HCPCS code assignment, usage, correlating bills and collections
Key drivers of the significant value stream were concentrated on increasing the gross revenue by $195M, mitigating losses by transitioning to charge on administration, identification of over 165 ERX IDs without HCPCS codes.
Over a 9-month period of working with our client, Pathstone was able to drive $5.56M in recurring revenue enhancements.