Module 6 - Pharmacy Benefits Flashcards
1
Q
(A) Prescription Drug Plans
A
- newer RX plans are usually “carved out” from the medical benefit and are typically administered by a PBM or TPA.
- these plans offer payer discounts off normal pharmacy charges, electronic claims admin according to benefit requirements, and utilization reports, offer programs to reduce costs through mail service / internet, and rebates through manufacturers for volume purchasing
- in an effort to differentiate their offerings, PBM’s provide various value added programs for frugs and disease management
2
Q
(A1) Prescription Drug Plans
Varieties of RX plans are available but all usually include the following 9 elements
A
1 - Member eligibility cards
2 - Online claims adjudication
3 - Tiered copays or deductibles and coinsurance
4 - RX networks providing discounts for branded medication
5 - Maximum allowable cost (MAC) pricing for generics
6 - Mail Service
7 - Formularies and/or preferred drug lists
8 - Prior authorizations for certain high cost medications
9 - Therapeutic interchange or switching
3
Q
(B) Pharmacy Benefit Design and Management
A
- RX plans originate through many sources; private and public, for profit and non-profit
- Non-Profit medical carriers such as BCBS and for-profit insurance companies can offer RX programs.
- Plan sponsors may go direct to a PBM
Employer and other payers can:
(1) manage the benefit and adjudicate claims internally
(2) outsource the benefit management to a health plan, PBM, or TPA
(3) contract directly with pharmacies and adjudicate claims internally
4
Q
(C) The Prescription Drug Card Program
A
- provides its participants with prescriptions medications from participating pharmacies at a prenegotiated discount rate
- employee typically pays a fixed copayment and the payer is billed at a prenegotiated discount rate
5
Q
(D) Covered Drugs
A
- generally, this type of program covers only RX that treat an illness or injury, subject to applicable limited and copayments
- common plan exclusions are medications that treat smoking cessation, hair loss, obesity, and cosmetic conditions
6
Q
(E) Exclusions
A
- Biotechnology medications are a special class in benefit designs.
- when these medications can be self injected, they are frequently covered under the RX benefit
- when a healthcare provider must administer then, they are covered under the medical benefit with a “J” code or other HCPSC code
- Contraceptive drugs are sometimes a special class in benefit designs.
- Insured plans may have a rider that allows a plan sponsors to opt for coverage of contraceptives
- Lifestyle drugs are a common excluded class; products that do not necessarily cure illness but can be used to improve daily life by boosting psychological attitudes, energy levels, sexual performance, and body image.
- OTC medications are a common exclusion; a few plans cover some OTC such as insulin, needles and syringes, prenatal vitamins, and diabetic devices / test strips.
7
Q
(F) The Patient Protection and Affordable Care Act of 2010 (PPACA)
A
- Effective 1/1/11/, FSA / HRA / HSA funds may no longer be used to purchase OTC drugs and meds (other than insulin) without a directive form from a medical provider.
- If OTC is required to treat a specific medical condition, reimbursement can be done by submitting a cert of medical necessity.
- Examples; allergy and sinus meds, antibiotic products, baby rash ointments and creams, cough cold and flu meds, pain relief meds, gastrointestinal aids, sleep aids, sleep sedatives, stomach remedies
- OTC medical supplies that are not drugs or meds still can be purchased with a benefit card, or a claim may be submitted for reimbursement
- band aids, contact lens solution, health monitors (blood pressure), ophthalmic products, supports and braces
8
Q
(G) Coverage Disclosure Considerations
A
-Formulary listings must be provided for insured plans
9
Q
(H) The Role of Capitation and Risk Sharing in Pharmacy Benefit Management
A
- Capitation involves an agreement between a payer and a PBM to provide RX benefits for a predetermined amount per participant, regardless of the cost of the RX actually dispensed
- Few of these arrangements were ever successful
- Risk Sharing Arrangement is where the PBM and plan sponsor share accountability for the pharmacy benefit cost
- better aligns goals and incentives and avoids many of the pitfalls seen in either pure capitation or fee for service arrangements
- these arrangements have been limited by the ability to measure actual expense reduction beyond that provided by claim administration and to attribute any successes to the plan benefit or the PBM programs
10
Q
(I) Cost Considerations
A
- the overwhelming majority or increases in expenditures on RX are attributable to the increased volume, mix, and availability of products, as well as cost increases passed on by the pharmaceutical industry
- significant growth in cost particularly affects the drug therapy classes that have limited generic availability, including speciality drugs and antiviral meds
- Direct to Consumer (DTC) advertising has increased the demand for drugs
- Demographics are driving up RX costs as the population ages, however, more and more new RX therapies are targeting the “young old” population (age 40 - 60) in an effort to prevent certain diseases from progressing and increasing the chances of heart disease and stroke later in life
- RX are a substitute for other forms of health care
- RX represent 10 to 25% of an employers overall health care benefit costs
11
Q
(J) Prescription Drug Trends
A
- RX typically account for approximately 8-11% of the total health care dollar
- Pharmacy benefit expense is driven by increases in raw drug costs, plan member utilization, new entrants into the drug market, introduction of new biotechnology drugs, and the branded drugs mix
- the top 3 biotechnology classes are inflammatory conditions, multiple sclerosis, and cancer
12
Q
(K) Copayments
A
- flat amounts paid by members for individual prescriptions
- 3 tier = 1 generic , 2 preferred brands, 3 non-preferred or non-formulary brands
13
Q
(L) Prior Authorization Programs (PA)
A
- restricts coverage under the plan of certain drugs based on the patients conditions and maximizes the outcome of medication
- the physician must call into the entity that is administering the PA program (typically the PBM or health plan) and answers questions about the patient which ultimately determines if the drug will be covered or not
- estimated monthly cost of drugs that full under PA is $250 to $2,000
- some drugs also have quantity limits in addition to the PA requirement
- control costs and ensure quality
- necessary for plan sponsors to require evidence of the effectiveness and return on investment (ROI) of these programs.
14
Q
(M) Quantity Limits (QLs)
A
- predefined quantities for a specific RX
- restrict the number of dosage units that can be dispensed for a 30/60/90 day supply
- established to ensure that certain meds could not be abused or overused
- help to improve compliance with medication therapy, lowers costs
- prompt patients to obtain and take higher doses less frequently
- VIAGARA
15
Q
(N) Drug Usage vs. Overall Costs
A
- a significant factor is not being able to tie drug use to medical spending is that diagnosis codes are not required for RX claim adjudication
- because of this limitation, drug use must be inferred based on common uses rather than the specific disease that the drug is prescribed to treat
- cost management motivates employers to have separated medical and RX plans
1) under the indemnity plan, there are no discounts for RX. Plan Sponsors may pay as much as 10% above the average wholesale price rather than 15% below it
2) medical claims processors often do not require detailed receipts for RX and therefore cannot review the RX for coverage as effectively as the PBM’s online processing environment
3) because detailed info is not entered into medical claims processing systems, limited data are available in report format for reviewing drug trends
4) rebates and other cost savings programs, which are available in RX benefit plans, are not available through medical claims processors
