Exam 2 Flashcards
What is a PBM
Pharmacy benefit manager
Private companies that specialize in Rx drug claims and coverage
administrative services only
assume no financial risk
what do PBMs do
contract and build networks of retail pharmacies from which patients can purchase their prescriptions
formulary development and management
Utilization and cost management
Claims processing and provider payment
what is the equation of prescription payment from PBM
Rx Payment from TTP (third party payer, in this case PBM)=
product cost + dispensing fee - patient share cost
what is used to calculate the product cost for single source, brand name drugs
Estimated acquisition cost (EAC)=
AWP- (AWP(x%))
what is used to calculate the product cost for multisource, generic drugs
Maximum allowable cost (MAC)
If a drug has a brand name and generic name drug available, and the Rx is written for the brand name drug, what variable do you use to calculate the product cost
EAC because you must dispense the rx as written for the brand even though generic is the cheaper default option
Define WAC
Wholesale acquisition cost
manufacturer’s published list price for sale of a drug (brand or generic) to wholesalers
WAC is approx for what pharmacies pay wholesalers for BRAND-NAME drugs
exceeds pharmacies’ acquisition costs for generics
AMP
Average manufacturers’ price
average price actually paid to manufacturers by wholesalers for drugs in retail pharmacies or for drugs bought directly from manufacturers
Used by gov’t as estimate for Medicaid generic Rx
AWP
average wholesale price
suggest list price for products purchases from wholesalers sold to pharmacies
pricing index to determine the pharmacy payments from PBMs
AAC
Actual acquisition cost
actual amount paid by a pharmacy to supplier for a product
typically unknown so rarely used for determining reimbursement amounts under Rx benefit plans
EAC
estimated acquisition cost
estimate of AAC use to determine reimbursement amount for single source drugs
EAC = AWP- AWP (%)
MAC
maximum allowable cost
max amount per unit of meds that PBMs will pay pharmacies for multisource drugs, regardless of amount pharmacy actually paid
creates incentive to spend less on generics
what are the 8 mechanisms PBMs use to control drug costs and increase their revenue
spread pricing
rebate with drug manufacturer
formularies
prior authorizations
quantity limits
step therapy
generic drug use
mail service options
define spread pricing
bill health plans more for Rx claims than pharmacy is reimbursed for its product costs and dispensing services
define rebate
what are the two forms of it
To the PBMs from manufacturers for single source brand name drugs to encourage PBMs to increase the market share for a specific med
Two forms: flat rate rebate and market share
define flat rate rebate
rebate based on a fix percent of the WAC
define market share rebate
rebate amount based on market share each PBM achieves for specific product
increased by the PBMs promotion of drug
lower co-pays
market share = # Rx for specific drug / # Rx for entire drug class
both covered by PBM
Formulary
list of medication covered by third party payer
includes tiered copays
lowest copay for generics
brands
nonpreferred brands
highest copay for specialty drugs
Prior authorizations
providers must get approval from insurance showing the patient meets specified criteria before the patient can receive the drug
criteria includes contradictions/allergies to preferred medications, failed prior treatment with preferred medication
delay in patient access or prescribing less effecting med to avoid hassle can result
very time intensive for provider and pharmacy staff
quantity limits
limits on # days supply or number of dosage units of medication allowed per Rx or time period
step therapy
prescribing pattern/protocol using the most cost-effective drug first
generic substitution
use of the generic drug if available, some cases only the generic will be covered
mail service options
option offered by prescription benefit plans where enrollees can pay lower cost-sharing amount and are able to obtain greater quantities
How are retail pharmacies reimbursed for prescription drugs under Medicare? Single source and multisource?
through stand-alone Part D (PDP) or medicare advantage prescription drug plans (MA-PD)
both are administered by private insurance companies that reimburse retail pharmacies for Rx drugs through PBMs using the same standard formula
Single source use EAC
Multisource use MAC subject to FUL
Describe FUL
Federal Upper Limit
States that receive federal funding for Medicaid can’t pay more than the federal upper limit for multi-source generic drugs
published by Center for Medicare and Medicaid Services (CMS)
Calculated using AMP
What are the roles of drug wholesalers
prime vendors; intermediates in the drug supply line like the PBM in the reimbursement line
why do pharmacies use drug wholesalers
reduce number of invoices
reduce inventory with multiple deliveries per day
Improved cash flow
Group purchasing organizations
group of health organizations in community or hospital setting that are brought together to provide large numbers that can leverage purchases and negotiate drug prices
Pros of open channel drug distribution
maximize access to drugs for patients with relatively common diseases
Cons of open channel drug distribution
manufacturers have little control over inventory
delay in delivery on information about prescribing patterns or patient outcomes
Pharmacy Benefits
bill and dispense
NDC: specific drug name, manufacturer, form, strength, container
copayment or coinsurance for drug
cost controls (better coverage for generics, quantity limits, prior authorizations, step therapy
Medical Benefits
Buy and bill: Purchase administer, bill
HCPCS Code (specific drug/drug class but not manufacturer, strength, package size)
copayment for office visit, no cost-share for drug
no price differentiation between generic and brand, weak control
Specialty Drugs
Expensive and require more clinical attention
high cost
treat rare conditions
injectables (usually)
produced via biotech (usually)
requires therapy management by HC professional (high incidence of adverse effects and compliance problems
FDA required REMS
2 drivers of specialty drug trend
high cost per patient
increased utilization (more drugs off drug pipeline, earlier use of biologics in regimens, new indications)
Limited drug distribution
Small number of distributors: drug only in few specialty pharmacies or wholesalers
patients with relatively rare conditions
Specific drug shipped for specific patient
REMS
risk evaluation and mitigation strategy
for drugs with potential serious adverse side effects
developed by manufacturer and approved by FDA
Requires data on distribution, prescribed, dispensed, and taken
How does specialty pharmacy benefit manufacturers
consistent data for REMS from pharmacy
better control inventory, reduced distribution costs, predicting market needs
increased access to patients through co-payment assistance and patient education
Patient benefit of specialty pharmacy
quick access to drug
24 hr access to pharmacist for questions
finding patient assistant programs to overcome financial barrier
member education drug use
refill and monitoring calls
clinical programs (disease management)
Insurer benefit of specialty pharmacy
shifting to white bagging which allows them to enact more cost controls
receive data from specialty pharmacy about how expensive drugs are utilized (prescribing patterns, patient adherence, effect of cost-control mechanisms)
what are both types of pharmacy practice trying to achieve
improve patient’s health outcomes
clinical pharmacy
product based care
focused on application of knowledge
patient counseling
therapeutic drug monitoring
by pharmacist
pharmaceutical care
introduced in the 1990s
patient centered
outcome oriented
requires inter-professional cooperation
disease management
medication therapy management
3 reasons for the shift to patient centered care
patient compliance: understanding health background and cultural context improves adherence
prevalent chronic conditions: increase value on quality of life
managed care cost-containment strategy: cheaper to prevent diseases than treat serious illness
Under OBRA ’90, pharmacists are expected to offer an explanation of the prescription drug regarding…?
purpose
proper administration
common adverse effects
potential interactions
contraindications to use of drug
guidance on steps to take given specific outcomes
General information about patient counseling including the way pharmacists are paid for the service.
no proper payment structure or compensation
following directions and optimizing health is ultimately up to patient
need yes or no if counseling was offered
no follow up required
disease management
coordinated health interventions for the define patient populations with chronic conditions
interprofessional
need significant self care
addresses patient’s drug and nondrug therapy, lifestyle modifications
no adequate compensation; service reimbursement under physician in inter-professional team
what law created MTM
Medicare Prescription Drug Improvement and Modernization Act of 2003
Goal of MTM
optimize therapeutic outcomes through improved medication use, and to reduce the risk of adverse events including adverse drug interactions
CMS guidelines
Guidelines: NOT services of patient counseling or disease management, they didn’t further elaborate, very unclear
Eligibility
eligibility of MTM
multiple chronic disease states
taking multiple medications
spend more than a specified amount on Rx meds
five core elements of MTM
comprehensive medication review (CMR): pharmacist asses all current medications
personal medication record (PMR): record for the patient of all of their medications
medication related action plan (MAP): document for the patient to use in tracking progress for self-management
intervention/referral: medication related problems if present
documentation and follow-up: evaluate patient progress and billing purposes
Patient counseling vs. MTM
patient counseling: required, no documentation required, rx specific, not wholistic, no formal payment
MTM: only required for Medicare Rx drug plans, requires documentation (for follow up and billing), wholistic, has follow up, can bill for service
what does gaining the “provider status” means for pharmacists
able to make claims directly to third-party payer for services they provide and the value of those services is properly recognized
Rational for pharmacists to obtain provider status
Need primary care service providers
in medically underserved areas
many patients with chronic diseases managed by chronic medications
movement toward pay-for performance through coordinated care, team-based approach
What are the 3 efforts on the Federal pathway to attaining provider status
Amending Social Security Act to list pharmacists as a provider
Pharmacy and Medically Underserved Areas Enhancement Act: all ow pharmacists to deliver care to patients in federally defined medically underserved communities
Equitable Community Access to Pharmacists Services Acts: establish Federal reimbursement mechanism for pharmacists services under Medicare Part B; allow for testing, treatment, and vaccinations
What are the 3 areas pharmacists try to improve at the state level for provider status
provider designation
scope of practice
recognition by payers
Rule 89
Pharmacists
procurement of drug products insuring their strength, quality, purity, and labeling from licensed and lawful distributors
accurate interpretation and dispensing associated with legal and legitimate prescriptions
Shall not fill an Rx where
improperly written
susceptible to more than one interpretation
where there is reason to believe it will harm the patient
where there is reason to believe it will be used for other than legitimate medical purposes
communicate to patient or patient caregiver (patient counseling)
Describe the different roles and responsibilities of pharmacist and technician.
pharmacist can delegate some of their tasks to licensed or unlicensed person if the pharmacist
determines knowledge and skills necessary
determine delegate posses knowledge and skills
provides policies and procedures for these functions
supervise and evaluates the delegate
provides remediation
and pharmacist bear the ultimate responsibility for performance of delegated tasks and functions
Licensed nurse on duty 24 hrs a day and higher level of care
skilled care/hospital like
more regulations and mandated monthly pharmacist chart review
hospital like/skilled care
costs about $6400 but is typically paid for by managed care
hospital liked/skilled care
staffed by medical assistants and has higher functioning patients
home-like/assisted living
no mandated pharmacist chart review
home-like/assisted living
licensed nurse on-call or present
home-like/assisted living
average cost $3500 and paid for out of pocket
home-like/assisted living
Part A coverage of activities of daily living
skilled care after hospital stay
day 1-20: $0 copay
day 21-100: $161/day copay
day 101+: no part A coverage
Part B and D coverage of activities of daily living
After 100 days:
Part B or D does not cover activities of daily living
Part B only covers physician services and durable medical equipment
Part D pay for Rx
What will Medicaid cover
Activities of daily living (ADLs)
medications
other necessary services and equipment
NOT ALL facilities accept Medicaid
Patients must meet asset/income requirements
Who is subject to strict annual inspections by the state
skilled care nursing facilities
