Many insurers pay drugs that are dispensed to patients at the AWP, or Average Wholesale Price.
Great. How is an office supposed to figure that one out?
Easy. There is a reference manual for that, put out yearly called, The Red Book. Why? Because it is red. I have yet to figure out any other reason.
It is a comprehensive listing of drugs and other dispensables. According to their website:
• RED BOOK aids in insurance and health plan formulary management by providing accurate and up to date information available from drug manufacturers, price and package changes, and changes in drug status
• RED BOOK helps you research pricing and look for lower cost alternatives, such as finding equivalent alternatives via the therapeutic classification system or in identifying brand and generic substitutions
There is also another book that you can use, called the PDF (Physicians Desk Reference), although it contains no pricing information, just manufacturer and dosing instructions along with indications and contraindications.
So, check it out. If you have ever wondered where an insurance company got their payment schedule from for a drug given, this is it.
Until next time,
Have this blog delivered straight to your Kindle!
Reach me on Twitter @LorettaLea
Author, Medical Billing, Coding, and Reimbursement
Available at Amazon.com
A medical billing professional for over 30 years now, I have seen a lot of changes in this field, and there are a lot more on the horizon. Follow me as we see what they mean and for who.