Third Party Claim Switching Companies

With an aging population and baby boomers becoming eligible for Medicare coverage

, the demand for durable medical equipment is increasing. Medicare, Medicaid and most insurance companies will provide coverage for the insured and reimburse providers who dispense durable medical equipment. In order to be a successful durable medical equipment supplier, you must knowhow to choose a company to help you submit claims for reimbursement.

There are rules and guidelines that apply to billing insurance companies for DME/HME, including Medicare and Medicaid, which do not apply to other services or prescriptions. There are many home medical and durable medical equipment stores that specialize in medical equipment but because of the broad range of items covered, a pharmacy may also carry many types of equipment.

Pharmacists are in a unique position since some of the medications they dispense are also considered durable medical equipment (DME). A pharmacist is accustomed to entering his or her prescriptions into the pharmacy management system and receiving online adjudication with Medicare or Medicaid. Unfortunately, most pharmacists do not realize that their DME claims do not go through online adjudication when they enter them into the pharmacy management system.

There are companies that call themselves "third party claim switching companies." In the medical billing industry, they are known as "Switches." They are called claim switching companies because the DME claims that are sent online through the pharmacy management system must be "switched" into a DME claim to go to Medicare Part B or to Medicaid. Why?

DME claims are not processed through a prescription plan. They must be submitted to a health plan and reimbursed using the insured's medical benefits.

For "switching" companies that means that if it is not Medicare or Medicaid, they cannot submit to the non-Medicare or Medicaid insurance company. Why? More times than not, it is because the pharmacist has not gathered the insurance necessary. He or she only has the prescription plan information. Furthermore, if a Medicare beneficiary has not disclosed his or her secondary insurance company then the secondary claim does not crossover automatically. It is left up to the pharmacist to send the claim to the secondary insurance company or pay the switching company an additional monthly subscription fee to manage the secondary claims submissions. Many times a pharmacist will have thousands of dollars of outstanding secondary claims that could have been collected but weren't because the claim did not crossover to the secondary insurer.

Switches are not always forthcoming in the lack of customer service they provide. The pharmacist finds it easier to enter all claims into the pharmacy management system without realizing that they are voluntarily surrendering thousands of dollars a year in claims denial and appeal management and secondary processing. SO, how does a pharmacist guarantee the recovery of denied funds and recover secondary claims balances?

Simple: partner with a full service billing company that believes customer service is an important and integral part of a client partnership. A full service billing company will manage denials and appeals and will track all accounts receivables. A full service billing company whose focus is excellent customer service makes a great partner.

Third Party Claim Switching Companies

By: Cindy Rushing

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