Drivers of Change in Pharmacy Benefit Management | Page 2
Published Online: June 20, 2014
Jan Berger, MD, MJ; Louis L. Brunetti, MD; Robert DaSilva, RPh; Shareh O. Ghani, MD; Kevin Hirsch, MD; Mumtaz Ibrahim, MD; Michael Kobernick, MD, MS, FAAEM, FAAFP; Robin J. Richardson, RPh; Scott Schnuckle; Justin Weiss, PharmD; and Richard Bankowitz, MD, MBA, FACP
Much of the current regulatory guidance on ACA implementation does not address pharmacy issues for ACOs in HIExs in much detail. Furthermore, separation of risk among payers and providers within government-prescribed ACO models has the potential to create perverse incentives: pharmacy risk resides with payers, whereas medical risk is shared with, or shifted to, providers. The belief is that commercial ACO models will follow the same approach for now, but eventually they will move toward integrating pharmacy and medical in terms of financial risk. Some plan sponsors (integrated health systems and MCOs) are already able to successfully integrate these benefits/risks, but other organizations where pharmacy and medical have historically been siloed find it difficult. For these organizations, the “proof of concept”—a unified effort is better than the sum of individual parts—may help speed integration efforts and bring policy makers’ attention to the issue.
The measures of success for the “proof of concept” ideally should follow the triple aim framework addressing patient experience (quality and satisfaction), population health, and cost. Attribution of success to individual interventions or components of care (pharmacy, medication adherence, etc) is not seen as essential, as it might detract from the overall goal.
Implications for Strengthening Sustainability of Drug Benefit Programs
Aggressive management of the drug benefit and of the pharmacy network are seen as critical to the ability of the MCOs’ to provide affordable access to drugs.
“Aggressive formulary management. Rebate optimization for branded drugs. Continued push toward generics. Step therapies broadly implemented. Increasing cost sharing with members as appropriate. Mandatory participation of members in specialty drug programs.”
Efficient execution of value-added programs such as medication adherence programs should result in overall cost reduction, but this depends heavily on integrating pharmacy and medical claims and data capture systems. These integrated systems are prerequisites to new types of contracts that will include outcome guarantees and mechanisms to attribute value to different stakeholders for specific activities and/or outcomes.
“Plan sponsors should be expanding their information technology resources or information partners to measure more than pharmacy cost, generic prescribing, etc… their clients will expect measurement of quality which includes more than just pharmacy claims. Integration of pharmacy, lab and encounter data will become common offerings of PBMs (pharmacy benefit managers).”
One respondent suggests that standardization and simplification of benefits and administration will be necessary, echoing similar observations about the impact of exchanges on pharmacy benefits.
“Ultimately, the most important aspect of the HIEx world is premium price over the next few years. Plans must offer a competitive priced benefit with the right amount of drug coverages that are not overly burdensome for consumers. UM (utilization managment) criteria will be permissible, but the administration of the criteria needs to be consistent and simple. For example, PAs (physician assistants) should be considered only tied to diagnosis and labs and take out the multiple levels of questions and complexity.”
Another participant cautions about the many hard-tocontrol external risks that may frustrate payers’ efforts: unabated cost trend in specialty drugs; potential for costshifting from the public to private sector; and benefit designs that can deliberately force members out of employer- sponsored plans onto health insurance exchanges, resulting in “lemon-dropping” of older and sicker workers onto the exchanges.
“In addition to the pharmacy costs, the aggregate cost of medical coverage is a threat to pharmacy coverage and other healthcare (eg, dental and chiropractic care). While we have not yet seen federal guidance on large group minimum value and minimum essential coverage, what we learned from PPACA is that large groups do not necessarily have to cover all of today’s plan services—they just can’t have any lifetime or annual maximums on those services that are part of the essential benefit set and the plan value on covered benefits must meet the actuarial value of 0.60. Thus, a likely way for groups to cut costs, yet still avoid employer mandate (“shared responsibility”) taxes, will be to carve out services when allowed. For self-insured business not subject to state mandates, some employers could start with chiropractic or durable medical equipment. In time, self-insured employers in industries where they do not have to use benefits to attract and retain skilled workers could eventually carve out specialty drugs, brand drugs, or maybe even all prescription coverage. The rationale here would be that employees needing these services would be better off buying guaranteed issue individual coverage.”
“This is a pretty extreme benefit approach and not something we will see for 1/1/2014. It’s also likely that there could be future legislative action to eliminate the ability for plan sponsors to remove coverage for pharmacy benefits entirely, but in the meantime, given the cost pressures, this is a possibility. To avoid it, we believe selfinsured plan sponsors should be looking at more restrictive formularies and networks and health and wellness initiatives to bring down their pharmacy spend. Another concept is a more ‘defined pharmacy benefit’ approach in which the plan only pays up to a certain fixed amount for prescriptions—this approach would require excellent transparency tools and would likely not be well received by members relative to other approaches.”
Another respondent takes a longer view, acknowledging uncertainties and challenges:
“Don’t panic; don’t overreact as everyone is in the same ‘boat.’ There are so many variables in 2014: [W]hat will be the cost of plans, how much enrollment will the exchanges really get , will the young, low cost members stay out, what will small employers do, drop coverage etc. Beyond 2014, there are several other significant milestones that are going to impact medical benefits, including pharmacy benefits. Those milestones are health insurance being able to be sold across state borders by 2016, large groups being able to join the exchange by 2017 and the 40% excise tax on high-cost, employer-sponsored health benefits in 2018.”
Implications of Findings
PDF is available on the last page.