Wednesday, June 20, 2018

Dereliction of Fiduciary Duties by CFOs and HR Execs Triggering Department of Labor Investigations

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The first shots across the bow have been fired highlighting how benefits leaders need to pay as close attention to health benefits as they have been paying to retirement plans. The most recent lawsuits name the HR leaders in the companies involved (GAP and CB&I) as defendants since they are listed as the plan administrator (sometimes CFOs are the plan administrators).

Tyrone's Commentary:

It's been my experince that most brokers and consultants are well-schooled in medical benefits but have not quite yet reached that same level of proficiency in the pharmacy benefits arena. Furthermore, there exists an expectation gap between what HR Execs and CFOs believe their brokers to know and what they actually know [do] about pharmacy benefits management. This is a good time to close that gap and get ahead of the problem before it bites you in the you know what. 

It’s clear that there is going to be the increased scrutiny for health benefits that has been commonplace for retirement benefits. For example, you can Google “ERISA class action” to find the many cases surrounding retirement benefits going after plan administrators for failing in their fiduciary duties. Similar cases in healthcare could have as far-reaching implications as Obamacare in driving employers to health benefits that deliver value.

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Thursday, June 14, 2018

Reference Pricing: "Gross" Invoice Cost for Popular Generic and Brand Prescription Drugs (Volume 223)

This document is updated weekly, but why is it important? Healthcare marketers are aggressively pursuing new revenue streams to augment lower reimbursements provided under PPACA. Prescription drugs, particularly specialty, are key drivers in the growth strategies of PBMs, TPAs and MCOs pursuant to health care reform.

The costs shared here are what the pharmacy actually pays; not AWP, MAC or WAC. The bottom line; payers must have access to actual acquisition costs or AAC. Apply this knowledge to hold PBMs accountable and lower plan expenditures for stakeholders.


How to Determine if Your Company [or Client] is Overpaying

Step #1:  Obtain a price list for generic prescription drugs from your broker, TPA, ASO or PBM every month.

Wednesday, June 13, 2018

3 strategies for reducing pharmacy costs

As more high-priced drugs enter the market, employers must keep a closer eye on it as part of an overall cost-savings strategy. For employers and brokers trying to determine how to decrease pharmacy costs for their organization and clients, here are three distinct components to consider.
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EDUCATION

Smart companies may work on their own to educate themselves on the space, but many are partnering with PBMs or brokers to manage health plans and educate employees. This process is helping employers educate themselves on best practices to lower pharma costs, like steerage towards generic prescriptions and rebate negotiations, and use insights from partners to more effectively drive action with analytic reports.

Tyrone's Commentary:

I read a bunch of articles and this is the first one I've come across which directly addresses education, in the PBM space, as a means for employers to reduce pharmacy costs. Kudos to BenefitsPro for putting employers first.

However, the health system is complex. Employees aren’t going to necessarily understand the relationship with PBMs, so it’s up to the employer to teach their workplace to explore and ask about more affordable health care option.

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Sunday, June 10, 2018

State Rx law cut down on appeal; benefits manager group prevails in federal panel ruling

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A federal appeals court unanimously ruled Friday in favor of a pharmacy trade association's challenge to an Arkansas law governing how pharmacists are reimbursed for generic drugs.

At issue is Act 900 of 2015, a law that regulates pharmacy benefits managers, the entities that verify benefits and handle transactions among pharmacies, insurers and patients. CVS Caremark and Express Scripts are two of the largest benefits managers.

Pharmacies acquire drugs from wholesalers. Then, the patient buys the drug from the pharmacy, often at a lower cost because health plans cover part of the price. Benefits managers, the intermediary group, are responsible for reimbursing the costs of those generic drugs. They create a "maximum allowable cost" list that sets those rates.

Tyrone's Commentary:

Why do we continue to spin our wheels looking to legislation to fix the problem? In the PBM space, applied knowledge or learning that is used in various situations and contexts is faster and more cost-effective!

Act 900 prevents benefit managers from paying affiliated drugstores more than they pay other pharmacies for the same prescription. It also bans them from paying pharmacies a lower price than the wholesale cost of a drug, if the pharmacy takes measures to appeal that discrepancy.

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