How Pharmacy Businesses Can Increase Reimbursements – Three Simple Steps

Like many other types of businesses, pharmacies face cost pressures that impact their bottom line, including rising medication costs as well as increasingly complex contracts with Pharmacy Benefits Managers (PBMs) and insurance providers. However, by gaining a better understanding of the data they already have, there is one key area where pharmacies can counteract lower profits due to rising costs: by increasing the reimbursements they get for medications they dispense to their pharmacy patients. How can pharmacies accomplish this? Here are three strategies for putting big data to work in driving increased medication reimbursements.

  1. Understand and increase medication adherence

Pharmacies get reimbursements from insurance providers for medication adherence per patient under something referred to as Proportion of Days Covered (PDC). PDC is the measure of how well patients adhere to their prescribed, on-going medication based on how often they refill. If a prescription medication covers a patient for 30 days and the patient gets his/her medication refilled on the 31st day, then the PDC rate is high because the patient was covered for all the days on which medication was needed. If there’s a lapse in refill days, however, then the PDC rate goes down. The higher the PDC rate, the lower the risk of the patient developing additional medical complications from being off their medication. Providers pay incentives and/or higher reimbursements to pharmacies that have higher PDC rates based on negotiated contracts.

Understanding each patient’s PDC score can help pharmacy management teams develop campaigns to increase and reach the 80% compliance level desired by the plan providers. This not only leads to higher rates of prescriptions filled for the pharmacy but also can increase the incentive rate provided.

Many pharmacy businesses aren’t able to easily track medication adherence at the patient level across multiple therapeutic classes. Usually the problem is in managing the data and keeping track of who has what prescription, matching it to the right insurance plan, matching that to the right contracted reimbursement rates, and then doing the actual monitoring of days elapsed between refills. It’s a complex matrix that requires a time-series analysis. The right solution requires the ability to pre-load contract terms from providers, and then track refills per patient automatically, across all contracts, all providers and all patients. An analytical technology platform that is both flexible enough to customize per pharmacy and yet easy to implement is the key to instituting a medication adherence tracking program. Only by knowing how patients are adhering to medications can a pharmacy business take action to increase adherence via the appropriate engagement campaign.

  1. Track reimbursement compliance

After establishing whether patients are adhering to medications, the next step is for pharmacies to track compliance of reimbursements from PBMs or insurance providers against those patients. If pharmacies can input contract details into a flexible platform to track patient medication adherence, they can track whether they are reimbursed at the correct contract rates. But what if your pharmacy business doesn’t have contracts in place for all providers? There’s still additional money to be recouped by comparing the reimbursements that pharmacies get from PBMs against Maximum Allowable Cost (MAC) levels. It’s no secret that PBMs and insurance providers do not offer a lot of transparency on how they pay out reimbursements, making it difficult for pharmacies to know whether they’re being paid at the appropriate MAC levels. But with the right analytical solution, this can be uncovered easily. The process is similar to the one described for tracking medication adherence under PDC and comparing it to contracted rates. Again, a flexible analytical solution enables this type of customization relatively easily.

  1. Negotiate more favorable contracts

The final step, after implementing a system for tracking medication adherence among patients, and tracking the reimbursement compliance rates among providers, is for pharmacies to negotiate better contract terms. By putting all the information in one place and linking together contracts against plans and patient medication adherence in a way that supports dynamic changes throughout the negotiations process, pharmacies can begin to develop contracts based on volume, adherence patterns, PBM compliance behavior and other factors. Armed with a full picture of their business and understanding of performance, pharmacies can enter negotiations with PBMs and insurance providers with an improved ability to agree on more favorable contracts terms down the road.


These three strategies to increase reimbursements can help a mid-size pharmacy increase their revenue by millions of dollars. To learn more about how the 1010data platform can help your pharmacy businesses implement these three strategies, reach out to 1010data at for more information.


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