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Executive Summary

PCS' Recap electronic drug claims processing system will be in 40,000 pharmacies nationwide in time for the McKesson subsidiary to make a bid proposal to the Health Care Financing Administration for processing Medicare drug claims. In its recent quarterly financial report/employee publication "McKesson Today," PCS parent company McKesson said it plans to have the Recap program "fully implemented" by the end of 1989. PCS is targeting Recap penetration into "some 40,000 drugstores nationwide" at the end of next year. To administer the new Medicare drug benefit, the health Care Financing Administration will contract out claims processing to three to five firms through cmpetitive bidding. HCFA plans to issue formal requests for proposals by late 1989 or early 1990 ("The Pink Sheet" July 18, p. 7). McKesson pointed out that the Recap "black box" electronic system will offer PCS "the opportunity to expand claims processing to the public sector" under the recently passed Medicre Catastrophic Care Act. The ou-patient drug benefit included in the new law will be phased in beginning in 1991. "The nationwide on-line claims processing capabilities of Recap, coupled with our experience and expertise in claims management, place PCS in an enviable position to compete for this business," PCS stated. PCS' Recap system is processing well over one million claims per month. In the three months ended June 30, McKesson reported that "3.6 mil. of the 22 mil. claims processed by PCS were handled by Recap." The system is also making rapid inroads into PCS member pharmacies. At the end of McKesson's fiscal year in March, Recap was linked to about 7,500 pharmacies ("The Pink Sheet" July 11, T&G-6). However, the August McKesson publication reported that "some 10,000" pharmacies "coast-to-coast" are now tied to the system. The Recap system, PCS said, enables pharmacists to verify claimant's eligibility instantaneously and eliminate paperwork through electronic claims submission. The system can provide direct cost-savings to subscribers by eliminating claims from cardholders no longer eligible for the benefit. In addition, PCS said it can "custom-tailor" plans with Recap to include features such as annual deductibles and maximums as well as drug interactions.

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