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Amie Goldman, CEOHealth Insurance Risk-Sharing Plan Authorityagoldman@hirsp.org
Vernita Bridges-McMurtrey,Executive DirectorMissouri Health Insurance Poolvhbridges@mhip.org
Alan Kellogg R.Ph.HealthLinX, L.L.C.akellogg@health-linx.com
Ken Anderson, PresidentIPC, Inc.Ken.Anderson@ipc-inc.com
Introduction of Presenters
Why Embark on a PBM Procurement
BackgroundPharmacy Benefit Management included in Plan Administrator contract.
PBM was a subcontractor to TPA
Why Embark on a PBM Procurement
ConsequencePBM contract not competitively bid
Fees are small portion of total TPA costPBM cost is more than admin fee (e.g. rebates and drug pricing)Quickly evolving market
Questions about accountabilityWho is the Customer?
Why Embark on a PBM Procurement
Goals of ProcurementDirect partner offering best value
Competitive Administrative FeeLowest Net Cost for Drugs (pricing and rebates) w/guaranteesClinical Programs Focused on Cost and Quality
Continued high levels of customer servicesAggressive performance standards with financial penalties
Continued Transparency and 100% Pass-Through100% manufacturer revenues returned to HIRSP No spread on retail, mail or specialty pricingOnly margin is on admin feeFavorable audit requirements
Why Embark on a PBM Procurement
Solutions to Drug Benefit ManagementBenefit changes and InnovationsValue Based Benefit DesignsIntegration of Pharmacy, Medical and Lab DataQuantifying the Return on Investment in Value Based ClaimsSpecial Pharmacy Plan DesignsImplementation StrategiesStrategies to Increase Medication ComplianceTechnology Solutions
www.health-linx.com
The Procurement Process - RFP
RFP Types– Pass through vs. traditional pricing– Per script vs. PMPM Administrative Fees– Yes/No/Deviation vs. Question/Response
Selection of Potential Bidders– Limit if possible– Allows focus on grading and time spent with
bidders– Evaluate marketing philosophy and statements– Survey of Health Pools and Local Market Leaders
www.health-linx.com
The Procurement Process - RFP
Requirements of Bidders– Determine Goals for the Plan– Current Services/Claim Volume– Mix of Customer Service/Price/Clinical Programs
WantedRFP Production– Bidder Notification/Intent to Respond– Electronic RFP– Electronic Data File-Actual Claims, HIPAA
Compliant– Pricing Documents
www.health-linx.com
The Procurement Process - RFP
RFP Areas– General Information (Plan
Info)• Timeline• Instructions to Bidder• Proposal Requirements• Ethics Requirements
– Bidder History– Claim Administration– Mail Service– Reporting– Account Services
– Audit/Fraud and Abuse– Communications– Clinical Services– Network Management– Price/Performance
Guarantees– Professional/Ethical/Legal– Specialty– Pricing– Contract– Therapeutic Comparison
www.health-linx.com
The Procurement Process –Contracting
– Value of incorporating the contract into the process
– Verify elements of pricing, service and clinical– Attach the RFP– Performance Guarantees– True-up and Settlements– Auditing rights for claims and rebates– Termination language on pricing, rebates,
run-outs
www.health-linx.com
The Procurement Process – Pitfalls
– Simplification of a complicated program– Embark on an RFP using a public RFP– Selection based upon pricing only– Selection based upon clinical services only– Proper selection, poor contracting– Rapid changes in the marketplace
• Specialty Drug/Specialty Drug Rebates• New pricing schemes and interpretation by bidders• Changes in benchmark pricing
1061 Peruque Crossing Court • O’Fallon, Missouri 63366 • (636) 614-1344Fax (636) 639-8021 • E-Mail: Ken.Anderson@ipc-inc.com • Website: www.ipc-inc.com
1061 Peruque Crossing Court • O’Fallon, Missouri 63366 • (636) 614-1344Fax (636) 639-8021 • E-Mail: Ken.Anderson@ipc-inc.com • Website: www.ipc-inc.com
Building and Managing a Positive PBM Vendor
Relationship
Building and Managing a Positive PBM Vendor
Relationship
NASCHIP ConferenceOctober 15, 2008
IPC Presentation on Managing and Auditing IPC Presentation on Managing and Auditing Prescription Benefit AdministratorsPrescription Benefit Administrators
NASCHIP Conference 2008
Managing the Vendor RelationshipManaging the Vendor RelationshipVendor Implementation and System Testing• Start as Early as Possible• Clearly Define Implementation Plan
o Eligibility Datao Benefit Design
• Copays and Deductibles• Clinical Edits and Incentives• Special Handling and COB
o Historical Claim Data• Clinical Edits• Open to Fill Mail Order Prescriptions
o Communicationso Billing and Payment
• Establish System Testing Processes and Review• Customer Service – Pre and Post Implementation
13NASCHIP Conference 2008
NASCHIP Conference 2008
Managing the PBM Vendor RelationshipManaging the PBM Vendor RelationshipContract Compliance• Periodically Validate
o Pricingo Benefit Setupo Incentiveso Performance Guarantees
Customer Service• Training and Scripting• Retraining and Re-scripting• Customer Service Call Reports and Call Monitoring
Administrative Services and Systems• Eligibility Maintenance, Card Production and Welcome Kits• Claim Billing and Payment• Grievance and Appeals
14NASCHIP Conference 2008
NASCHIP Conference 2008
Managing the Vendor RelationshipManaging the Vendor RelationshipAccount Management• Day to Day Service with Questions and Escalated
Complaints• Objective Reporting and Recommendations
Clinical Services – High Risk Pool Population• Balancing Appropriate Care with Barriers to Service
Managing Escalated ComplaintsDiagnosing Vendor Mismanagement• Awareness of Root Causes Leading to Ongoing Issues
15NASCHIP Conference 2008
NASCHIP Conference 2008
Managing the PBM Vendor Relationship – Auditing
Managing the PBM Vendor Relationship – Auditing
Post-Implementation Audit• Contract Pricing Terms• Benefit Design• Key Services
o Clinical Programso Operationalo Administrative
16NASCHIP Conference 2008
NASCHIP Conference 2008
Managing the PBM Vendor Relationship – Auditing
Managing the PBM Vendor Relationship – Auditing
Claim Audit• 100% Claim Audit• Annually
o Claim Pricing – MAC, Discount, Drug Codingo Benefit Design – Copayments, Coverage Limitations
Contract Audit• Quarterly
o Performance Standards• Annually
o True-up Arrangements• Rebate• Pass-through Pricing
o Performance Guarantees
17NASCHIP Conference 2008
NASCHIP Conference 2008
Managing the PBM Vendor Relationship – Auditing
Managing the PBM Vendor Relationship – Auditing
Integrity Audit – Fraud Waste and Abuse (FWA)• Provider• PBM• Member
Clinical Program AuditAuditing for Vendor Success
18NASCHIP Conference 2008
NASCHIP Conference 2008
What Now?What Now?Assess your current prescription drug administrative arrangementWhat is your trend rate?• Year over year• Compared to industry or NASCHIP averages
How is your services?• Member access to care• Responsiveness to your issues
How old is your current agreement?• Every Three years pricing improves• New Management requirement evolve
If your are not comfortable with your answers to these questions, you may want to explore benefits of competitively bidding, or updating your administrative arrangementDefine goalsAssessing resourcesBoard Presentation and Buy-in
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