Highly sensitive drug-pricing leads to more variability and a greater chance for errors – Automated Controls for Medical Drug Spend

Medically covered drug pricing is highly sensitive, and changes occur frequently. The more variability in a system, the greater the chance for errors and inefficiencies. Regarding price methodologies, most reimbursements are based on CMS’ Average Sales Price (ASP) and/or Manufacturers’ Average Wholesale Price (AWP). This should be straightforward. However, payments, driven by a coding process as well as contractor rates, may not be correctly applied in all contracted scenarios. Reimbursements based on a static contracted relationship may not be accurate or reflect the current market rate. An “in-process and real-time” analysis of the calculated rate and/or pricing methodology can protect from under/overpayments.

Available for download:

Automated Controls for Medical Drug Spend by RJ Health’s Chief Innovation Officer, George Herchenroether.

Appropriate reimbursement for drugs covered by the medical benefit requires more data and structure than most medical claims or billing systems were originally intended to process:


If you found this information about medically covered drugs helpful, you may also like to register for our upcoming webinar, Creating Pre-Payment Controls for Medically Covered Drug Costs through Automation.