Chris Lanaman, Executive Director, Professional Services

Being a Good Shepherd Over Pharmacy Drugs

The pharmacy is one of the most complicated places to work within a hospital. Hospitals can stock thousands of different drugs. These drugs are purchased from manufacturers, as well as drugs they create (combine/solutions). With all these complexities, there are many points of failure of which they must be aware. Below is a brief list of functions the pharmacy must complete daily:

  • Take and dispense drug orders through their Electronic Health Record (EHR).
  • Manage inventory.
  • Mix or compound drugs for special treatments or pediatric patients.
  • Validate that proper Healthcare Common Procedure Coding System (HCPCS) codes are assigned to the drugs for proper documentation and revenue identification.
  • Manage the Quantity Conversion Factor (QCF) to comply with the units of measure outlined by the Centers for Medicare & Medicaid Services (CMS).
  • Validate that the correct unit of measure matches for each HCPCS from Multum (Cerner’s Drug Database solution).
  • Validate that the NDC’s are not obsolete to prevent downstream revenue denials.
  • Research and identify industry changes/innovations around pharmaceuticals.
  • Maintain security and devices for controlled substances.

Like a relentless shepherd tending to a flock of sheep, the pharmacy has a lot to look after to keep patients safe and improve their outcomes.

The Food and Drug Administration (FDA) requires drug manufacturers to update any changes to their drugs up to twice a year, once in June and once in December. That information is made public, and the Multum® database is updated with these changes. Once the newest versions of Multum are available, they should be loaded into the EHR system to allow the pharmacy to reconcile its drug inventories. All payors, but most importantly CMS, always checks each NDC, HCPCS, and QCF on every drug that was given to the patient. From that information, they can understand:

  • What drug was used
  • Who made the drug
  • If the FDA has registered the drug, and
  • How much to reimburse for each drug

Mismatched or missing HCPCS codes between Multum and Pharmnet® can cause denials because the drug and code are not what CMS expects. Not calculating the correct QCF for CMS can cause a reduction in the amount reimbursed, or an overage can signal an audit for requesting more than 100 percent of reimbursement for a drug. For the payor, if the NDC is obsolete, they may deny the payment. Just as a shepherd who isn’t watching his or her flock loses out on the revenue from lost sheep, a pharmacy that isn’t monitoring its NDCs is causing undue denials from payors for not using valid NDCs on drugs. Going back and correcting NDCs after a denial increases the organizational productivity costs for billers to repeat work.

The best practice for pharmacies is to use reports or tools like Formulary Compliance in Softek Panther®, which automatically compares the formulary build with Multum, to review:

  • Obsolete NDCs
  • Incorrect QCFs
  • HCPCS mismatches
  • Missing HCPCS, and
  • Unit of measure mismatches

The pharmacy must make the necessary changes to their EHR to ensure drug charges get posted correctly, and payors will not send denials for incorrect or obsolete NDCs. These steps alone make tending the flock of drugs easier for the extremely busy pharmacy community.

What does Softek® do?

Softek’s mission is to help hospital systems maximize their investment in Oracle Cerner Millennium®. We do this by providing innovative software solutions and consulting services that can achieve more together than either can alone.

At Softek, our team of innovators and software developers brings expertise beyond the ordinary to every client. Our experts are involved with Oracle Cerner Millennium® hospitals throughout the country, consulting clients so they can optimize system performance and revenue integrity.

Softek delivers a full suite of consulting services and software solutions to assess and optimize EMR system performance, including revenue cycle integrity and patient accounting.

Softek was awarded 2021 Best in KLAS for Revenue Cycle Optimization.

Let’s talk about how you can get the most out of your Oracle Cerner Millennium® system.