Supporting Independent Community Pharmacies
Independent pharmacies play a vital role in ensuring patients have access to medications
and personalized care in communities across the country. Pharmacy Services Administrative Organizations (PSAOs) provide the support that helps these independent pharmacies navigate an increasingly complex healthcare system, allowing pharmacists to spend more time caring for patients and less time managing paperwork.
An Accessible Source for Patient Care
| Independent pharmacies are typically privately and independently owned and operated, with the primary function of providing direct pharmaceutical care to patients. Independent pharmacists are accessible, trusted health professionals who serve communities nationwide. In fact, according to the Journal of American Pharmacists Association, 76 percent of pharmacies in rural communities are independent. PSAOs help these pharmacies manage administrative burdens associated with participating in health plans and Pharmacy Benefit Manager (PBM) networks. |  |
 | Empowering Independent Pharmacies Through Administrative SupportDistributor-affiliated PSAOS are organized as a separate, independently operating legal entity; they are one of the many ways the distribution industry supports its pharmacy customers. Independent pharmacies voluntarily contract with a PSAO, typically for an established monthly fee, often $200–$300 per month, depending on the PSAO and scope of services, to receive support with the complex operational and administrative requirements associated with participating in pharmacy benefit networks. PSAOs function as an extension of the pharmacy, representing pharmacies in their interactions with insurers and PBMs and managing back-office demands that help independent pharmacy owners dedicate more time to serving patients. Some PSAOs are affiliated with pharmaceutical distributors, while others operate independently. Distributor-affiliated PSAOs are one of the many ways distributors support their pharmacy customers, and they are organized as separate legal entities that operate independently. Not all pharmaceutical distributors offer PSAO services, and not all PSAOs have a relationship with a pharmaceutical distributor. |
Voluntary Support Tailored to Pharmacy Needs
Contracting with a PSAO is entirely voluntary. Each independent pharmacy determines whether partnering with a PSAO best meets its business needs. Most independent community pharmacies in the U.S. choose to outsource some administrative services to a PSAO because managing payer contracts, credentialing requirements, audits and payment reconciliation independently can be time-consuming and administratively burdensome.
What PSAOs Do
Support administrative interactions with health insurers and PBMs, including questions about claims, contracting, reimbursement and audits
Provide audit support and assist pharmacies in responding to audit findings
Assist with regulatory compliance and credentialing requirements
Facilitate central payment processing and reconciliation for member pharmacies
Analyze payment and dispensing data to identify unpaid or incorrectly paid claims
PSAOs Do Not
✘ Determine reimbursement rates or coverage decisions
✘ Set Maximum Allowable Cost (MAC) pricing
✘ Design health plans or prescription drug formularies
✘ Retain any portion of pharmacy reimbursement
✘ Make coverage or utilization management decisions
✘ Determine pharmacy network design
Coverage policies, reimbursement methodologies, patient cost-sharing, formulary placement, and network design are established by health plans and PBMs – NOT PSAOs.
Local Independent Pharmacies Are Essential Patient Care Providers
Independent pharmacists are accessible, trusted health professionals that serve communities nationwide. PSAOs help these small business owners manage the administrative complexity of healthcare contracting so they can focus time and expertise on patient counseling, medication education and health outcomes.
 | For more information about PSAOs, visit psaocoalition.org. |
Resources
The resources below address the industry's approach to increasing awareness and understanding of the role of PSAOs.
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