 |
Why the Structure of your Pharmacy Program Matters
Questions plan sponsors should ask when
considering carve-in or carve-out for Rx
The value of managing pharmacy benefits through a dedicated prescription program has been well established. Pharmacy Benefit Managers (PBMs) have the specialized expertise and ability to purchase pharmaceuticals on the most cost-effective volume basis. In fact, all of the major medical plans administer pharmacy benefits through contracted arrangements with PBMs. Employers have a choice about how the PBM arrangement is made. The pharmacy plan can be "carved-in" as part of the medical plan, or it can be "carved-out" as a separate program. There are important considerations to this choice and employers should know how it impacts their plan from both a financial and utilization standpoint.
Who controls the contract?
In a "carved-in" pharmacy arrangement, the contract is between the medical plan and the PBM that administers the prescription drug plan. The employer/plan sponsor is not a party to the contract and typically has no involvement in determining the terms and conditions of the arrangement and financials. If there are discounts and rebates, the employer does not see them in a carve-in.
Carve-out pharmacy programs make the contractual and financial terms transparent for the employer/plan sponsor, and gives them a say in negotiating those terms. From the pricing of the products to allocation of pharmaceutical manufacturer rebates, there is a considerable amount of money on the table. It is to the employer's advantage to know where those funds are going and, as the ultimate purchaser of the pharmacy benefit, to receive their fair share of the rebates, discounts and volume purchasing leverage through the PBM arrangement.
KPPC provides complete transparency of the contractual arrangements for the employer/ plan sponsor, with verified allocation of the financial terms.
How do you know the contract is being followed?
Even if a carve-in arrangement claims to offset expenses or fees using rebate funds, employers cannot determine just how that money is allocated and how much they receive. Under a carve-out pharmacy plan, the employer/plan sponsor typically has the right to audit to ensure the plan and terms are being administered accurately. In most cases, the audits must be done at the employer's expense.
KPPC includes a 100% audit of pharmacy claims to verify that contract terms and financial allocations are in compliance with the contract. There is no additional cost to the employer for KPPC's third party audit program, conducted by Solid Benefit Guidance (SBG), a recognized leader in the industry.
Your decision... or someone else's?
Because the employer/plan sponsor is not a party to the contract, the PBM administering a carve-in pharmacy is determined by the health plan. Using a carve-out program, you as the plan sponsor get to choose the PBM that administers your plan and meets your requirements. In a carve-out, you can compare the services, expertise, references and terms when you decide which PBM to select.
KPPC is powered by the industry-leading expertise of Express Scripts, Inc. From Specialty Prescriptions to Care Management, ESI provides top specifications to KPPC members.
Are pharmacy rebates subsidizing claim administration fees?
One of the disadvantages of being left outside the PBM contract is that you may not know how manufacturer rebates are being applied to artificially reduce the claims administration fees for a carve-in pharmacy program. If the employer decides to find a more effective PBM and wants to carve out the pharmacy benefit, the health plan may come back and increase ASO fees because their artificial subsidy from the carve-in Rx disappears.
KPPC's transparency means you know how the financial arrangements apply to your employee benefit program and keeps control of that program in your hands.
Is it better to have the plan data integrated?
As previously explained, both carve-in and carve-out pharmacy programs use a PBM to administer the prescription drug benefit and its utilization. The workflows and the data that is generated between the medical plan and the PBM are essentially identical. Both carve-in and carve-out programs have to transmit their adjudication data and utilization edits from the PBM to the health plan, using mandatory, industry standard transaction sets. Both types integrate exactly the same way.
KPPC's state of the art utilization and clinical care programs effectively manage costs and health conditions on behalf of the patient and the employer, provide verifiable results and maximize the savings to the employer's benefit program.
If you want to maintain control of your employee benefit program, keep the terms of your PBM contract and financial arrangements transparent, and want to choose the PBM you determine can do the best job – then the structure of your pharmacy program does matter.
A carve-out program through KPPC helps you maximize the advantages of an expertly managed prescription drug benefit that won't leave you in the dark about the dollars and where they are being spent.
|
|
|
|