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Pharmacy Benefit Management and Other Third-Party Administration of Insurance and Pension Funds

NAICS 524292 · Insurance Carriers and Related Activities · SBA size standard: $45.5 million average annual receipts

Third-party administrators for pharmacy benefits, health claims, and pension funds receive eligibility files, process claims against plan rules, coordinate with pharmacies and providers, generate explanations of benefits, handle appeals, and manage payments to providers while the plan sponsor confirms all rules, payments and filings.

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What makes this business different

  • Strict plan rules for formularies, prior authorizations, copays, deductibles and coordination of benefits that must be applied exactly as the sponsor defines
  • Daily receipt and reconciliation of eligibility, pharmacy and medical claims files from multiple sources
  • Coordination with retail, mail-order and specialty pharmacies for claim adjudication and overrides
  • Generation and mailing or electronic delivery of explanation of benefits and remittance advice
  • Tracking of appeals, grievances and prior-authorization requests with strict timelines
  • Reconciliation of claim payments, rebates, and subrogation recoveries against bank accounts
  • Annual and quarterly reporting to plan sponsors, with sponsor approval of all transmitted data

Specialist bots

  • a worker at a desk reviewing rows of member data on dual monitors next to stacks of printed eligibility reports

    Eligibility Coordinator

    Load, validate and reconcile incoming eligibility files from plan sponsors.

    Works in: Ambitious Docs, Ambitious Sheets, Ambitious Tasks · Workflows: Eligibility file intake and validation

    Automates

    • Parses and loads eligibility files
    • Compares member data to prior periods
    • Flags mismatches and coverage gaps
    • Updates the eligibility master file
    • Drafts daily reconciliation summary

    Stops for a person

    • Sponsor confirms resolution of flagged eligibility issues
    • A person reviews and approves any manual overrides
  • a worker seated at a workstation examining a pharmacy claim screen with formulary reference documents open beside the keyboard

    Claim Adjudicator

    Apply plan rules to incoming pharmacy and medical claims and calculate payable amounts.

    Works in: Ambitious Tasks, Ambitious Docs, Ambitious Sheets · Workflows: Pharmacy and medical claim adjudication

    Automates

    • Matches claims to eligibility and plan documents
    • Checks formulary status, copays and deductibles
    • Determines member and plan responsibility
    • Generates explanation of benefits drafts
    • Routes claims for payment or denial

    Stops for a person

    • Complex or high-dollar claims are reviewed by a person
    • The plan sponsor confirms rule application on disputed claims
  • a worker at a desk organizing medical records and prior authorization request forms into categorized folders

    Prior Authorization Specialist

    Process prior authorization requests, apply clinical criteria and track decisions.

    Works in: Ambitious Tasks, Ambitious Docs, Email Buckets · Workflows: Prior authorization and exception handling

    Automates

    • Captures request data and attachments
    • Compares request against plan criteria
    • Drafts approval or denial notices
    • Monitors decision timelines
    • Updates the claims system with outcomes

    Stops for a person

    • Clinical staff review medical necessity documentation
    • The sponsor approves any exception to standard criteria
  • a worker comparing financial spreadsheets on a monitor while referencing printed remittance advices at a desk

    Payment and Rebate Reconciler

    Aggregate claims, prepare payment files, calculate rebates and reconcile accounts.

    Works in: Ambitious Sheets, Ambitious Tasks, Ambitious Docs · Workflows: Provider payment and reconciliation, Reporting, rebates and financial reconciliation

    Automates

    • Sums approved claims by provider and period
    • Applies contracted rates and rebates
    • Generates remittance and ACH files
    • Reconciles bank deposits and outflows
    • Prepares utilization and rebate reports

    Stops for a person

    • The plan sponsor reviews and approves all payments and reports
    • A person authorizes release of funds
  • a worker reviewing a stack of appeal correspondence and supporting medical documentation at an organized workspace

    Appeals and Grievance Handler

    Track, process and respond to member and provider appeals and grievances.

    Works in: Ambitious Tasks, Ambitious Docs, Email Buckets · Workflows: Appeals and grievance processing

    Automates

    • Logs appeals and assigns timelines
    • Assembles all related claim and plan documents
    • Drafts resolution letters
    • Tracks regulatory deadlines
    • Updates central appeals log

    Stops for a person

    • A qualified person makes the final appeal determination
    • All outgoing correspondence is approved by the sponsor before sending
  • a worker arranging printed quarterly reports and plan documents into labeled binders on a conference table

    Reporting and Document Analyst

    Compile reports, maintain plan documents and prepare materials for sponsor review.

    Works in: Ambitious Docs, Ambitious Sheets, Ambitious Tasks · Workflows: Document control and sponsor reporting, Reporting, rebates and financial reconciliation

    Automates

    • Pulls data for utilization and trend reports
    • Maintains current plan document versions
    • Generates member notices and letters
    • Organizes materials for sponsor audits
    • Creates dashboards for quarterly reviews

    Stops for a person

    • The plan sponsor confirms accuracy of all reports and documents
    • A person approves every document before distribution or filing

Workflows

Eligibility file intake and validation

Starts when: Receipt of daily or weekly eligibility files from the plan sponsor

  1. Load incoming eligibility file into the system
  2. Validate member counts, IDs and coverage dates against prior file
  3. Flag discrepancies such as terminated members or new dependents
  4. Update the master eligibility database
  5. Draft reconciliation report for sponsor review

Watch for: Files arrive in varying formats from different employers and unions; Member data must match exactly to prevent claim denials

Pharmacy and medical claim adjudication

Starts when: Incoming claim from pharmacy switch, provider or member submission

  1. Match claim to active eligibility and plan rules
  2. Apply formulary, copay, deductible and prior-authorization checks
  3. Calculate member responsibility and plan payable amount
  4. Route claim for payment or denial
  5. Generate explanation of benefits or remittance advice draft

Watch for: Real-time response required for retail pharmacy point-of-sale claims; Complex rules for specialty drugs and high-cost claims

Prior authorization and exception handling

Starts when: Request received by fax, portal, email or pharmacy

  1. Capture request details and supporting documentation
  2. Check against plan criteria and formulary alternatives
  3. Draft approval or denial letter with clinical notes
  4. Track decision timeline and any appeals
  5. Update claim system with decision status

Watch for: Strict regulatory turnaround times for urgent and non-urgent requests; Medical necessity documentation must be attached and reviewed

Provider payment and reconciliation

Starts when: Weekly or bi-weekly payment cycle

  1. Aggregate approved claims for the period
  2. Calculate net payment after rebates and adjustments
  3. Generate remittance advice files
  4. Prepare ACH or check payment files
  5. Reconcile payments against bank statements

Watch for: Accurate application of contracted rates and rebates; Sponsor must approve all large or unusual payments

Appeals and grievance processing

Starts when: Receipt of formal appeal or grievance

  1. Acknowledge receipt within required timeframe
  2. Gather all related claims, notes and plan language
  3. Route to appropriate review level
  4. Draft resolution letter with appeal rights
  5. Update tracking log and report to sponsor

Watch for: Timelines are regulated and vary by line of business; All correspondence must be retained for audit

Reporting, rebates and financial reconciliation

Starts when: End of month, quarter or contract period

  1. Compile utilization, cost and trend reports from claims data
  2. Calculate and allocate pharmacy rebates per contract
  3. Reconcile total paid, recovered and owed amounts
  4. Draft sponsor reports and dashboards
  5. Flag anomalies for sponsor review

Watch for: Rebate calculations follow specific sponsor contracts; All financial reports require sponsor sign-off before release

Document control and sponsor reporting

Starts when: Scheduled or on sponsor request

  1. Maintain current plan documents, amendments and SPDs
  2. Track annual filing or renewal deadlines
  3. Generate member communications and notices
  4. Prepare data for sponsor audits
  5. Archive all processed documents with audit trails

Watch for: Plan language and requirements are confirmed by the sponsor; All outgoing documents are reviewed and approved by the sponsor before distribution

Bot templates for this industry

Source: U.S. Small Business Administration, Office of Size Standards, Table of Small Business Size Standards Matched to North American Industry Classification System Codes, version March 2023 (effective 2023-03-17, NAICS 2022). Size standards are shown for reference only.