Choosing the Right PSAO for Your Pharmacy

It can be tough to stay financially viable and meet your community’s healthcare needs at the same time. Some days, you do everything you can to keep your head above water. This is why the majority of independent community pharmacies in the U.S. outsource some administrative services to a Pharmacy Services Administrative Organization (PSAO).

The main job of a PSAO is to interact with healthcare insurers and pharmacy benefit managers (PBMs) on behalf of independent community pharmacies.

PSAOs contract with a group of independent pharmacies for an affordable monthly fee. They amplify the voices of independent pharmacies with third-party payers and PBMs. This creates administrative order and allows these small businesses to better use their limited resources.

Traditionally, a PSAO focused on offering centralized managed-care solutions to help pharmacies manage their contracts. The core services included:

  • Reviewing and administering contracts
  • Credentialing
  • Central payment services
  • PBM issue resolution

The PSAO who works for you should offer those same core services to your pharmacy. They are your strategic advisor and will work with payers and pharmacy benefits managers (PBMs). A PSAO promotes and educates plans on the performance capabilities of its network. They work with payers and PBMs to build the performance measures that are right for pharmacies in its network. They grant you access to the services and tools that help you meet the performance measures. A PSAO is your coach as you work toward your goals. If they’re not, then it’s time to find someone new.

Listed below are a few of the ways a PSAO can help your pharmacy solve some of the more difficult daily issues:

Spot extra reimbursement opportunities

A major challenge for your independent pharmacy is declining profit margins. With a trusted PSAO, you will attain help finding reimbursement opportunities. This will ease your mind in knowing that the money you’re entitled to isn’t left behind.

Reduce DIR fees

It’s important for you to know what your clinical and operational outcome measures are and how they affect your reimbursement. If you’re not sure how, a PSAO can help. They’ll work to reduce your DIR fee obligations and maximize performance-based opportunities by meeting the outcome measures in your contracts.

Help you understand complex contracts

On your behalf, a PSAO will sign hundreds of contracts with payers and PBMs. Typically, these contracts would be offered to you directly on a “yes-or-no” basis. A PSAO will review and administer the contracts with your business’ success in mind. One of the biggest benefits PSAOs offer is helping you understand important contract components and the impact the contracts can have on your pharmacy.

Expand your preferred pharmacy networks

For the long-term success of your business, you’ll want access to preferred pharmacy networks of leading health plans and PBMs. The need to continue serving the patients in those networks is critical to your business’ long-term success. You can ultimately drive more patients and prescriptions to your pharmacy. This means more revenue, and the PSAO will continue to do its job driving better patient outcomes and achieving higher performance.

Here is what a PSAO does not do:

  • Influence drug pricing or impact what a patient pays for their medication
  • Dictate reimbursement rates
  • Retain any portion of pharmacy reimbursement
  • Create DIR fees or retain any portion of DIR or dispensing fees
  • Create networks or plan structures
  • Accept all contract terms

Now that you know what a PSAO can (and can’t) do for you,  it’s time to choose one for your pharmacy. Look for these qualities as you select your own PSAO:

  • Position in the market. Check to see if the PSAO has a network of pharmacies that make it an eye-catching partner for health plans and PBMs. This will result in more invites to participate in preferred networks and under more favorable terms. Plus, you’ll have access to more patients.
  • Expertise in contracting. How knowledgeable is the PSAO about PBM and payer contracts and value-based care models? This is crucial for including and tracking the right outcome measures in your contracts.
  • Technology support. Be sure the PSAO offers technology that enables and enhances your understanding of your business. Contracts are getting more complex, and you need support managing your business effectively.
  • Focus on performance. Is the PSAO focused on clinical and operational performance? Do they offer you tools and solutions that improve medication adherence? This can help improve care and reimbursement at the pharmacy and network level.
  • Services and tools. Does the PSAO offer ways to help you manage your business and meet your goals? They should offer you coaching resources, tools, and solutions to help keep you organized.

Choose to work with a qualified PSAO partner and watch your business and patient outcomes transform for the better. Plus, your new strategic partner can find reimbursement opportunities and boost your bottom line.


A Member-Owned Company Serving Independent Pharmacies

PBA Health is dedicated to helping independent pharmacies reach their full potential on the buy-side of their business. Founded and owned by pharmacists, PBA Health serves independent pharmacies with group purchasing services, wholesaler contract negotiations, proprietary purchasing tools, and more.

An HDA member, PBA Health operates its own NABP-accredited secondary wholesaler with more than 6,000 SKUs, including brands, generics, narcotics CII-CV, cold-storage products, and over-the-counter (OTC) products — offering the lowest prices in the secondary market.

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