30 October 2008
Ministry of Health rolls out online claiming facility for pharmacies
Pharmacies can now submit subsidy claims electronically to the Ministry of Health instead of sending them on floppy
Alan Hesketh, Deputy Director-General, Information, said the new online service will be available to all registered
pharmacies from December 2008.
"This is the first web-based service that uses the new approach for the Connected Health Information System," according
to Mr Hesketh. Connected Health is an initiative aimed at improving the efficiency and effectiveness of health payment
processes across the sector through a secure and reliable interconnection network.
Eleven pharmacies are working with the Ministry of Health?s Information Directorate in the transition period and are
already using the online claiming facility. About 350 registered Auckland Metro and Northland District Health Board
pharmacies will be progressively brought online by mid-December.
?Just over half of the 93 million payments currently made by the Ministry?s Information Directorate relate to pharmacy
claims. Having an online service improves the efficiency and security of processing these claims,? Mr Hesketh said.
Previously, pharmacies made payment claims manually by submitting claim details on floppy disks to the Ministry every
fortnight and receiving paper-based returns. But there were often issues with corrupted disks, causing delays in the
processing of claims.
The online facility has been developed in collaboration with the Pharmacy Guild, Auckland Metro District Health Boards
and the pharmacy management system vendors HealthSoft and Toniq.
?In the future, the online facility could also handle claims from a variety of providers such as laboratories, maternity
services and dental care,? according to Mr Hesketh.
?Pharmacies will also have full access to other online capabilities such as validating a patient's national health index
number via a look- up tool as well as future opportunities in electronic prescribing,? he added.
Questions and Answers
1. How will this online pharmacy claiming facility work?
A pharmacy interested in having the online service must first establish a secure connection with the Ministry of Health.
Secure connectivity includes having a current digital certificate and being connected to a Ministry-accredited provider
of the secure Health Network.
Established in November 1999, the Health Network is a secure communications infrastructure to which about 1200 district
health boards, care providers and hospitals are connected.
A pharmacy submits a claim over the Health Network to the Ministry's electronic gateway and receives an XML file
referred to as a Line by Line (LBL) report in return. This electronic file replaces a paper-based report and provides
the pharmacy with a summary of the calculated payment against the claimed amount and provides error reasons for any
failed claim items. LBL reports will be archived and available for download by the pharmacies at any time.
2. How did pharmacies submit claims previously?
Pharmacies submitted their claims manually or by putting their claim files on floppy disks. The manual batches or
diskettes were submitted fortnightly to the Ministry of Health, which then sends the pharmacies a printed error and
variance report and Buyer Created Tax Invoice. But there were often problems with corrupted diskettes, causing delays in
the processing of claims.
A small number of pharmacies are able to access an initial online claiming system trialled over three years ago. This
system will be phased out once existing online pharmacies move to the new online service.
3. Will pharmacies need to purchase any hardware or software to be able to submit payment claims electronically? If so,
who will pay for this?
The costs associated with online claiming will depend on which DHB the pharmacy is located in. Some DHBs are funding
pharmacies to claim online and are shouldering their connectivity costs and monthly charges.
However, if no funding is supplied by the DHBs, then the following associated costs can be expected:
· Digital Certificate ? currently free as the Ministry funds this annually for the user
· Secure Health Network ? set-up costs are about $300 and monthly charges are about $90. Majority of the cost relates to
the provision of a fully managed firewall appliance needed for a broadband connection.
4. What are the benefits of this online claiming facility over the old manual system?
This online facility:
· reduces administrative costs for pharmacies and the Ministry of Health · improves security and privacy in pharmacy
claiming · allows pharmacies (with the agreement of the DHB in their region) to submit claims on a weekly rather than on
a fortnightly basis, and thereby help improve their cash flow
Connection to the secure Health Network provides pharmacies access to additional online services and information and
future opportunities in electronic prescribing. For example, pharmacies can now also access a Special Authority online
look-up service to validate patient approvals instead of calling the Ministry of Health?s Contact Centre to validate
5. Do pharmacies support this initiative?
The Pharmacy Guild of New Zealand, Auckland Metro District Health Boards as well as pharmacy management system vendors
HealthSoft and Toniq supported the Ministry of Health's Information directorate in developing the online pharmacy
The online facility was developed following an extensive survey carried out in 2006 by the Health Information Strategy
Action Committee (a Ministerial Committee), which found that pharmacies wanted to be able to make payment claims online.
6. Has there been an online system before?
About 92 pharmacies have been using an online claiming system introduced as a pilot initiative over three years ago.
This online pharmacy claiming facility replaces it. The old platform will be shelved once the current users are shifted
to the new platform.
7. Who can pharmacies talk to about the online claiming facility?
Pharmacies keen on getting this new online service are advised to contact the Ministry of Health?s Online Team on 0800