Test 3 Pharmacy Networking and Contracting Flashcards

1
Q

How does PBMs handle risk in their contracting with sponsors or health plans?

A
  • they do not assume financial risk; makes it the responsibility of the sponsor
  • they give a performance standard to their sponsor; if they do not meet it, the sponsor can enforce a penalty
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2
Q

components of sponsor contract

A
  • includes specific costs
  • performance expectations
  • typical fees
  • performance guarantees
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3
Q

Process of rx claim reimbursement

A
  • PBM pays the provider

- health plan or sponsor reimburses the PBM

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4
Q

components of a PBM contract with a pharmacy provider

A
  • Services and standards expected of the pharmacy
  • Record retention requirements
  • Electronic communication standards
  • Requirement for compliance with formulary
  • Expectations for online, real-time claims transmissions
  • Reimbursement policies
  • Enrollment fees paid by the pharmacy
  • Advertising and marketing privileges
  • Prior authorization policies
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5
Q

define zero balance billing

A

Pharmacy may charge a member the full copay even if U&C or contract is less than the copay

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6
Q

AWP

A
  • Average Wholesale Price
  • The list price published in commercial publications. If not supplied directly from the wholesaler then it is calculated using a markup of WAC. If supplied by the manufacturer it is called SWP or suggested wholesale price.
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7
Q

WAC

A
  • Wholesale Acquisition Cost
  • This is the list price for a product when sold by a manufacturer to a wholesaler. It is determined by the manufacturer.
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8
Q

AMP

A
  • Average Manufacturer Price
  • The price reported to CMS which represents the average price paid to the manufacturer by wholesalers.
  • actual selling price to the wholesalers
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9
Q

AAC

A
  • Actual Acquisition Cost
  • This is the final price paid by the pharmacy after all discounts are removed. This price is not published or reported and is determined by self-report, audit or invoices.
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10
Q

EAC

A
  • Estimated Acquisition Cost
  • Used by Medicaid programs (can be used by commercial plans as well), EAC is calculated to estimate AAC.
  • Typically based on a discounted AWP or an inflated WAC.
  • EAC = Unit List Price +/[Unit List Price*%]
  • (EAC*Units) + Dispensing Fee
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11
Q

FUL

A

-

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12
Q

MAC

A
  • Maximum Allowable Cost
  • Defined individually by both commercial and government payers as a method for reimbursing multi-source drugs.
  • The same price is reimbursed for a given drug formulation and strength regardless of the manufacturer.
  • (MAC*Units) + Dispensing Fee
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13
Q

NADAC

A
  • National Average Drug Acquisition Cost

- survey of what pharmacies are actually paying for their drugs

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14
Q

General Reimbursement Equation

A

Reimbursement Rate = Product cost + Dispensing fee

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15
Q

define COD

A
  • Cost of Dispensing

- all the pharmacy’s costs related to dispensing a prescription, other than the cost of the product

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16
Q

Importance of COD

A
  • important when negotiating contracts

- if contracted dispensing fee is too low, may need to reject

17
Q

COD formula

A

Total expenses = Labor + Direct costs + Indirect costs

COD = Total expenses / Total Rx volume