RDS Services Blog

Capture Lost Revenue at a Rate of 400%

For all organizations that provide Prescription Drug Benefits for their retiree populations, it is important to understand the actual costs associated with providing that benefit.

For enterprises organizations that participate in the Retiree Drug Subsidy program through the Centers for Medicare and Medicaid Services, the reimbursement of up to 28% of the eligible costs is an important factor in keeping those plans fiscally viable. In other words, for every $100,000 of drug benefits that the organization expenses on the retiree population, the Retiree Drug Subsidy program should reimburse the Enterprise $28,000 of that cost.

But all too often the enterprise is only get back $10,000 or $15,000 of the total eligible drug spends. So that would seem bad enough on the face of it, but there is a more sinister aspect of to that kind of short fall in the Retiree Drug Subsidy recovery.

The real tragedy here is the revenue equivalent earning needed to make up that kind of reduced Retiree Drug Subsidy reimbursement for the Centers for Medicare and Medicaid Services.

To state this in the way that puts the lowered reimbursement into dollars and cents. For every $100,000 of drug benefits that the organization expenses on the retiree population, how much revenue will the enterprise have to generate to cover the cost? For every industry, the profit margin is different, but is we use an average of 19% net margin on sales; the enterprise has to generate approximately $515,464 to cover that Retiree Drug Subsidy reimbursement shortfall.

So getting the maximum Retiree Drug Subsidy reimbursement is critical not only for the retiree drug benefit costs, but to keep your gross sales in line with reality.

So remember, the following:

  1. Retiree Drug Subsidy recovery dollars are the equivalent of sales dollars at 4 time the rate of recovery.
  2. Retiree Drug Subsidy payments average 18% because Prescription Drug Benefit managers don’t track all eligible costs.

So in conclusion, having a Retiree Drug Subsidy reopening conducted by RDS Services, LLC can recover the lost subsidy dollars and increase your bottom line.

If you have questions or comments on the Retiree Drug Subsidy program, please reach out to the National Sales Director George Fox at (516) 361 9404 or email RDS Services, LLC at gfox@rdsservices.us.

For other posts and informational articles on the Retiree Drug Subsidy program, visit www.rdsservices.us or connect to George Fox on Linkedin


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