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LTC Pharmacy Billing & “Buy and Bill”: Challenges & Solutions

If you work in long-term care (LTC) pharmacy billing, you’ve probably heard of the “buy and bill” model. But what does it actually mean, and more importantly, how does it impact how LTC pharmacies bill for medications?

This model applies mainly to specialty medications, injectables, and high-cost drugs. However, it also adds another layer of complexity to an already challenging billing process. To better understand its effects, let’s break it down and see how it influences LTC pharmacies.

Key Takeaways

• Buy and Bill means the provider purchases, stores, and administers medications, then submits claims for reimbursement.
• However, it creates cash flow challenges because providers must pay upfront and wait for reimbursement later.
• Billing errors and denials are common due to complex coding requirements and payer-specific rules.
• Therefore, LTC pharmacies must coordinate closely with providers to ensure proper documentation and reimbursement.
• Outsourcing billing services (like Staffingly, Inc.) can help reduce errors, speed up claims, and improve revenue flow.

What Is “Buy and Bill” in LTC Pharmacy Billing?

The “buy and bill” model is a billing and reimbursement process used mainly for specialty drugs and injectables in LTC facilities. Instead of the pharmacy dispensing a medication directly to the patient, the process works differently:

First, the provider (LTC facility or physician) purchases the medication from a wholesaler or manufacturer.
Next, they store the drug until it’s needed.
Then, the provider administers the drug to the patient.
Finally, a claim is submitted to the insurance payer for reimbursement.

How “Buy and Bill” Affects LTC Pharmacy Billing

 Major Cash Flow Challenges 💰

Since providers pay for medications upfront, they must wait for reimbursement, which can take weeks or even months. This delays cash flow and creates financial strain, especially for expensive medications.

 Complex Coding and Billing Requirements 📄

Billing under “buy and bill” is not the same as traditional pharmacy claims. These medications are typically billed under medical benefits (Medicare Part B, Medicaid, or private insurers), not pharmacy benefits (Medicare Part D).

• Correct coding (HCPCS, CPT, and NDC codes) is critical to ensure claims are processed correctly.
• Each payer has different billing rules, making it easy to get rejected if something is missing.
• Medicare and Medicaid rules constantly change, requiring frequent updates to billing processes.

Risk of Billing Errors and Claim Denials

LTC pharmacies and providers must submit highly detailed documentation to justify medication use. Common reasons for denials include:

Missing prior authorization (PA)
Incorrect coding (wrong NDC or HCPCS codes)
Lack of medical necessity documentation
Duplicate billing errors

 Reimbursement Delays Create Operational Challenges ⏳

Even when claims are submitted correctly, reimbursement under “buy and bill” can take weeks or even months. This creates:

Cash flow problems for LTC facilities.
Drug shortages if facilities hesitate to purchase high-cost medications.
Administrative burden for staff tracking pending claims.

How LTC Pharmacies Can Manage “Buy and Bill” More Effectively

Since “buy and bill” introduces cash flow issues, billing complexities, and reimbursement delays, LTC pharmacies need a strategic approach to handle these challenges.

1. Use AI-Powered Medical Billing Software

• AI tools can:
• Auto-check claims for errors before submission.
• Ensure correct coding based on payer-specific rules.
• Track reimbursement status in real time.

2. Partner with Outsourced Billing Experts

• Outsourcing to billing specialists (like Staffingly, Inc.) can:
• Speed up claim approvals and reduce denials.
• Ensure compliance with ever-changing regulations.
• Free up LTC staff to focus on patient care instead of billing issues.

3. Establish Clear Coordination Between Pharmacies & Providers

• Ensure providers document medical necessity properly.
• Track prior authorization (PA) requirements early.
• Educate staff on proper billing workflows.

4. Monitor Payer Policy Changes Regularly

• Stay updated on Medicare & Medicaid billing changes.
• Adjust billing processes proactively to avoid denials.
• Train staff on new documentation and coding requirements.

What Did We Learn?

The “buy and bill” model plays a big role in LTC pharmacy billing, but it creates cash flow challenges, billing complexities, and reimbursement delays.

• The best ways to manage it include:
• Using AI-powered billing software to reduce claim errors.
• Outsourcing billing services for faster approvals and compliance.
• Improving coordination between LTC pharmacies and providers.
• Keeping up with payer policy changes to avoid unnecessary denials.

If your LTC pharmacy struggles with billing and reimbursement, Staffingly, Inc. offers expert medical billing solutions to help you reduce errors, speed up payments, and improve cash flow.

FAQs

Why is “buy and bill” challenging for LTC pharmacies?
Because providers must purchase drugs upfront, submit complex claims, and wait for reimbursement, creating financial risks.

What’s the difference between “buy and bill” and traditional pharmacy billing?
Traditional pharmacy billing goes through pharmacy benefits (Medicare Part D), while “buy and bill” is billed under medical benefits (Medicare Part B).

How can LTC pharmacies reduce denials in “buy and bill” claims?
By ensuring correct coding, using AI-powered billing tools, and outsourcing billing management to experts like Staffingly, Inc.

Can outsourcing billing improve cash flow for LTC pharmacies?
Yes! Outsourcing ensures accurate claims, reduces denials, and speeds up reimbursements, improving overall cash flow.

Disclaimer

For informational purposes only; not applicable to specific situations.

For tailored support and professional services,

please contact Staffingly, Inc. at (800) 489-5877

Email : support@staffingly.com.

About This Blog :

This Blog is brought to you by Staffingly, Inc., a trusted name in healthcare outsourcing. The team of skilled healthcare specialists and content creators is dedicated to improving the quality and efficiency of healthcare services. The team passionate about sharing knowledge through insightful articles, blogs, and other educational resources