Basics of Managed Care Flashcards
Discuss recent trends in health care plans
national health expenditures per capita has significantly increased (share of GDP is 19.3%)
Life expectancy in 2022 in US
partially rebounded in US while stabilizing in most comparable countries
US lost nearly two decades of progress in life expectancy (COVID, opioid epidemic, guns)
What is managed care?
Managed care is an approach to the delivery of healthcare services in a way that puts limited resources to best use in optimizing patient care
increase outcomes, decrease costs
– Highly regionalized (insurance is regulated by states)
– Molded by territorial demands
– Varied based on employer size
– Used by both private and public heath plans
Managed care organization (MCO)
- A generic term applied to a managed care plan; also called Health Maintenance Organization (HMO), Preferred Provider Organization (PPO), or Point-of-Service Plan (POS), although the MCO may not conform exactly to any of these formats.
- MCOs manage the cost and utilization of covered services and products to optimize patient care through efficient use of limited resources.
Accountable care organizations (ACOs)
- Groups of doctors, hospitals, and other health care providers, who voluntary work together to provide coordinated high-quality care to their Medicare patients and accept financial risk/reward tied to clinical outcomes.
- The Centers for Medicaid & Medicare Services (CMS) govern ACOs licenses and measures ACOs
Preferred provider organization (PPO)
- A managed care delivery model consisting of preferred networks of providers with some out-of- network coverage. PPOs offer patients more choice and flexibility than health maintenance organizations (HMOs) with correspondingly higher premiums.
Many use the terms MCO and health plans interchangeably to describe
a managed care delivery system
MCOs include:
* Managed Medicaid and Medicare programs
* Employer-offered commercial insurance plans
* Department of Defense TRICARE programs
* Integrated delivery systems and ACOs
Focus continues to be on controlling costs by controlling supply and demand of all healthcare resources.
Utilize an array of cost management strategies to influence cost-effective decisions.
Medicare part ____ is managed care compenent biggest part
C
HMOs
– HMOs expanded following HMO Act of 1973.
– Promoted wellness and health prevention in addition to comprehensive acute and chronic care.
– Why have they fallen somewhat out of favor? - employees likely to stay with their employers now
Describe the goals and rationale for managed care plans
Goals:
* Prevention of disease
* Focus on wellness and enhanced QOL
* Improved clinical outcomes
* Quality and accessibility of health care
* Cost containment
The smaller the firm size
the less health benefits offered
Average annual premiums for family coverage
has increased way faster than for single coverage
Flow of products, services, and funds for nonspeciality drugs covered under private insurance and purchased in a retail setting
plan sponsors –> health plan –> PBM –> manufacturer –> wholesaler –> pharmacy –> beneficiary
Discuss the major tools used in the pharmacy benefit component of a managed care plan
- Most MCOs offer a prescription drug plan as part of the healthcare benefits
- Prescription drug plans manage formularies and use utilization management tools and cost-sharing to manage prescription costs
- Utilization management tools include: Prior Authorization, Step Therapy, Quantity Limits
Covered pharmacy benefit in MCOs: tiers/tiered formulary
A pharmacy benefit design that financially rewards patients for using generic and preferred drugs by requiring progressively higher copayments for progressively higher tiers.
Fundamentals of group insurance: tiers for prescription drugs
– Tier 1: lowest copayment - most generic prescription drugs
– Tier 2: medium copayment - preferred, brand-name prescription drugs
– Tier 3: higher copayment - non-preferred, brand-name prescription drugs
– Specialty tier: highest copayment: very high-cost prescription drugs
Tier 1
preferred generic
Tier 2
non-preferred generic
Tier 3
preferred brand
Tier 4
non-preferred brand
Tier 5
preferred speciality
Tier 6
non-preferred speciality
Managed care pharmacy tools
- Formulary development with P & T Committees
- Medication Therapy Management
- Prescription Drug Monitoring programs
- Drug Utilization Review
- Utilization management: prior authorizations, quantity limitations, and step therapy
- Preferred & exclusive networks
- Mail order pharmacy
- Specialty pharmacy
Describe potential roles for pharmacists in managed care
drug information
medication therapy management/clincial programs
product development
client relations/account management
industry relations/market access/managed care MSLs
health economics and outcomes research
formulary management/prior authorizations
government programs
specialty pharmacy
working for PBMs or MCOs
Working in industry
Providing services at a mail order pharmacy
Providing DUR / MTM services for employee groups
Providing continuity of care discharge services
Providing direct care to patients as a provider
Ensure the pharmacy benefit plan provides individual patients with medications that are:
- Clinically appropriate
- Cost-effective
- Delivered through the appropriate channel
Pharmacists role in managed care: drug distribution
– Processing Rx drug claims
Pharmacists role in managed care: working on formulary review boards
– PBMs or State benefits
– Conducting DURs
Pharmacists role in managed care: working for insurance providers
– Formulary and prior authorization management
– Plan designs
To enhance patient care, particularly for those with chronic conditions, pharmacists design clinical programs to:
- Use evidence-based research data to create disease-management and medication therapy management programs
- Encourage appropriate prescribing and proper use of medications
- Promote use of cost-effective therapies to benefit both patients and payers
- Improve health and quality of life for population under their care
Why is Population Health and Managed Care Important to YOU?
- Population living longer
- Overutilization of healthcare services – High-priced low value drugs
- Greater % of population eligible for Medicare and Medicaid
- Impact of healthcare costs on federal budget
- New technologies driving up costs without evidence of better outcomes
Recent Trends in Managed Care
- Mergers of health insurers with PBMs: Anthem – will start its own PBM
– CVS Health (Caremark-PBM) – Acquired Aetna
– Cigna – acquired Express Scripts PBM
– United Health – acquired Catamaran and Optum PBM
Dark side of managed care
- Tries to drive down utilization.
- Puts providers at risk.
- HMO withholds part of providers salaries.
- Unregulated profit margin for insurers.
- Patients are uninformed.
- Insurers and PBMs make
navigating the system difficult. - Increasing deductibles for patients.
- Increasing premiums with flat salaries.
- Who benefits from the drug rebates? (PBMs)
Deductible
A fixed amount that an insured person must pay out-of-pocket before health care benefits become payable. Usually expressed in terms of an annual amount.
Premium
The amount paid to a health insurance carrier for providing coverage under a contract.
Coinsurance/co-insurance
The percentage of the costs of health care services/products paid by the patient after deductible.
Copayment/co-payment
A cost-sharing arrangement in which a covered person pays a specified charge for a specific service, such as a fixed dollar amount for each prescription received (e.g., $5.00 per generic prescription, $10.00 per preferred brand-name prescription). Usually paid when the service/product is provided.
Out of pocket costs/expenses
The portion of payments for covered health services required to be paid by the enrollee, including co- payments, coinsurance, and deductibles.
Maximum out of pocket costs
The limit on total member copayments, deductibles, and co-insurance under a health care benefit contract.
Copay coupons/copay cards
Discount cards provided by pharmaceutical manufacturers to patients to reduce patient cost-share for prescription (or first fill of several refills) of non-preferred drugs for a certain period of time.
Health savings account
A tax-sheltered savings account that may be used by beneficiaries covered by high-deductible health plans (HDHPs) to pay for routine health care expenses.
Format for formulary submission (dossier)
A format or dossier that is standardized by the Academy of Managed Care Pharmacy for manufacturers’ submission of clinical and economic evidence in support of formulary consideration. Manufacturers and managed care organizations (MCOs) use the format to formalize, standardize, and expand information for P&T Committee review.
Preferred drug
A drug designated by a managed care organization as a valuable, cost-effective treatment option. In multiple-tiered pharmacy benefit plans, preferred drugs are assigned to a lower tier than non- preferred drugs. (Drugs that are not designated as preferred are referred to as non-preferred drugs.)
Drug mix
an evaluation of the type of drugs prescribed by an individual or defined population. The drug mix may reveal the rate of new drug adoption by reviewed physicians.
Carve out pharmacy benefit
The separation of a service (or a group of services) from the basic set of benefits in some way. In a carve- out pharmacy benefit, the plan sponsor separates (“carves out”) the pharmacy benefit from the medical benefit and hires a pharmacy benefits management company (PBM) to provide and manage these pharmacy benefits.
Average wholesale price
- Historically, the generally accepted drug payment benchmark for many payers.
- Today, AWP is thought of as a “sticker price” that rarely reflects the actual payment after discounts have been subtracted.
- AWP is usually 20% higher than the wholesale acquisition cost (WAC) but may vary.
Maximum allowable cost
- A reimbursement limit per individual multiple-source pharmaceutical entity, strength, and dosage form (e.g., $0.50 per fluoxetine 20 mg capsule).
- MAC price lists are established by health plans and PBMs for private-sector clients and usually are considered confidential
National Committee for Quality Assurance (NCQA):
- A private, not-for-profit organization dedicated to improving health care quality.
- NCQA develops a rigorous set of quality standards and performance measures for the accreditation of a broad range of health care entities.
Outcomes-Based Contracts (OBCs) (also called Performance Based Risk-Sharing Contracts or Value- Based Contracts):
- Pharmaceutical manufacturers provide rebates based upon drug failure to provide specified outcomes to help mitigate financial risk of new drugs with unknown real-word clinical experience.
- OBCs are common in the United Kingdom and European Union and increasing occurring in the United States headlines.
Pharmacy Benefit Managers (PBMs):
- Organizations that manage pharmacy benefits for managed care organizations, other medical providers, or employers.
- PBM activities may include some or all the following: benefit plan design; creation/administration of retail and mail service networks; claims processing; and managed prescription drug care services such as drug utilization review, formulary management, generic dispensing, prior authorization, and disease management.
Prior Authorization (PA):
- An administrative tool used by health plans or prescription benefit management companies (PBMs) that requires prescribers to receive pre-approval for certain drugs to qualify those drugs for coverage under the terms of the pharmacy benefit.
- Guidelines and administrative policies for prior authorization are developed by pharmacists and/or other qualified health professionals who are employed by or under contract with a health plan or PBM.
Rebate:
- A discount that occurs after drugs are purchased from a pharmaceutical manufacturer and involves the manufacturer returning some of the purchase price to the purchaser.
- When drugs are purchased by a managed care organization, a rebate is based on volume, market share, and other factors.
Access Rebate (Smaller Percentage):
Flat/fixed percentage off WAC in exchange for formulary listing or favorable position (e.g., specific tier, preferred status).
Performance Rebate (Higher Percentage):
Variable percentage off WAC based on achieving specific performance parameters. Usually based on market share increases.
Portfolio contract:
Manufacturer with a large number of drugs offer individual drug rebates and extra portfolio incentives to a managed care organization for accepting multiple drugs for formulary addition.
Bundle contract:
Manufacturer offers a rebate on a desirable drug (e.g., high market share, first line drug) only if the managed care organization adds one or more other undesirable drugs to the formulary.
Healthcare Effectiveness Data and Information Set (HEDIS):
- A measure of health plans’ performance based on five care domains:
– effectiveness of care
– access/availability of care
– experience of care
– utilization and relative resource use
– health plan descriptive data.
Star Ratings:
- CMS rates the quality of Medicare Advantage and Medicare Prescription Drug Plans (Part C and/or D) using a scale of 1 (poor) to 5 (excellent).
- Plans’ payment and rebate amounts are based on quality ratings on clinical performance, patient experience, enrollee complaints, and customer services.
