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Payment Automation Solution Saves Fortune 25 Company Tens of Millions Annually

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AgileThought Team Learns Healthcare Payer Tax Code to Build Automatic Payment System


A Fortune 25 Pharmacy Benefits Management (PBM) company, the largest in the world, was taking on the full tax burden of all medications dispensed, costing the company tens of millions of dollars annually. The company needed a mechanism to automatically charge payers – entities that finance or reimburse the cost of health services such as insurance carriers and plan sponsors – their share of taxes.

AgileThought was called on to learn the complicated tax code and develop automatic tax invoicing within financial IT systems and processes.


  • Successfully implemented new automated taxation software
  • 100% of taxes are now accounted for
  • Modified ERP system to securely connect patient data with payer information
  • Delivered the project $800,000 under budget
  • Prevented disruption to daily operations

Navigating Pharmacy Tax Codes

It wasn’t until 2016 that the PBM was distributing taxes for medication they dispensed. Prior to that, they paid all taxes on invoicing.

The project to accurately distribute taxation required:

  • Learning the many ways payers processed taxes
  • Financial process audits Sourcing tax automation software
  • Integrating tax software with financial IT systems
  • Modifying all related workflows from shipment creation to payments receivable

Calculating and billing taxes wasn’t as simple as sending a bill to market payers. The organization needed the right strategic partner, one who intimately knew (or could quickly learn) their financial processes and the relationship with their main ERP system – and who could develop within that system to automate payments.

The Challenge – Apply the New Tax Automation Software to All Financial Processes

Healthcare payers do not have a universal method to pay taxes, nor are they directly responsible for the tax burden. The way pharmacy deliverables are taxed is that they fall to those who physically dispense and ship medication. It is then up to that entity to invoice payers.

A patient with pulmonary hypertension, for example, has a mixed treatment plan involving exercise, regular visits with a cardiologist, and medication. Many patients receive their medicine through the mail. If they are billed, it is only for a percentage of the total cost of the treatment. The rest of the cost burden, including taxes, falls on who dispensed the medication – the PBM.

The entire system is complex, involving thousands of treatment options for millions of patients with different providers. The PBM did not have a system to allocate tax billings, and was losing tens of millions of dollars in potential revenue.

They needed a way to automate tax billings within an intricate system of workflows, and account for the different ways that payers documented taxation. In addition, the organization required software to calculate the right amount of tax for each invoice, and tie it to patient data in the main ERP system.

Choosing the Digital Strong Path

AgileThought was involved with nearly every financial process in the main ERP system including:

  • Invoicing
  • Adjustments
  • Denials
  • Payments receivable

The team modified tables, screens, and workflows within each process – leading to the development of an automated tax allocation system. The team also ensured that all EDIs (electronic data interchange – how IT sends information from one system to another) were properly installed and modified.

AgileThought divided the project into multiple phases in order to apply transparent deliverables and communicate the full scope of work. These phases included:

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Subject Matter Expertise

The main ERP system contains hundreds of applications with many more workflows. The customer relied on AgileThought’s knowledge of the system to ensure that every patient and financial workflow would be accounted for.

They relied on AgileThought’s technical lead, and subject matter expert (SME) in finance to flesh out the requirements and affected workflows. The SME provided research and documentation to cover all possible tax scenarios.

The SME also provided consultation, analyzing requests from business administrators and gave feedback as to whether or not the request would work in the overall project scheme.

A35 Payments & The Different Methods Payers Use for Taxes

Not all payers process payments or data the same way. This was discovered by the AgileThought team during the requirements phase.

After reporting their findings (and receiving approval), the team incorporated all potential methods of payer tax accommodation. Today, the system has been set up to automatically determine the specific tax amount to bill based on service codes. Depending on the code, the algorithm will either apply a specific formula per billable item, or distribute tax invoices for all items as a default value.

Delivered Under Budget & Without Issues

One of the main project concerns was the reaction of payers, who, up to this point had not been taking on any of the tax burden. The PBM set up a notification system to inform payers that they would start paying their share of taxes.

There were no issues with the payers. In addition, the project did not affect other workflows or regular financial processes. All medications were dispensed as usual, and the AgileThought team designed, developed, and QA’d the new tax processes without impacting operations.

AgileThought delivered the project $800,000 under budget, solidifying our role as trusted advisors.

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