Tyson Foods, Employing 140,000, Parts Ways with Major PBM and other notes from around the interweb:

• Tyson Foods, Employing 140,000, Parts Ways with Major PBM. Tyson Foods will become one of the first Fortune 100 companies to stop using the nation’s traditional large pharmacy benefits managers, as it looks to cut spending on high-cost drugs. Tyson’s decision adds to an upheaval in the industry, as startups promising lower costs and transparency challenge the largest benefit managers and pushed them to change their own business models. Tyson made the decision as it saw pharmacy costs soar. “We were going anywhere between 12% to 14% increases for pharmacy — and on a $200 million spend that’s quite a bit. We found that the specialty (drug) component of our trends … were picking up a lot of the increase year over year,” said Renu Chhabra, Tyson vice president and head of global benefits. When she tried to get answers on what was driving those trends from the company’s old pharmacy benefit manger, or PBM, Chhabra says she couldn’t get the kind of data she wanted.

• 5 ways to improve your PBM procurement process in 2024. Many self-funded plan sponsors struggle to manage the cost of pharmacy benefits and rely on non-transparent contract guarantees to hold PBMs accountable. Meanwhile, drug spending continues to compound at an astonishing rate in defiance of the savings promised during the procurement process. As a former pharmacy program director for a plan covering more than 16,000 lives, I can tell you that it is possible to stop the “games” PBMs play, control costs, and ensure that all contractual guarantees are met, especially in scenarios where a PBM won’t guarantee an all-in per member per month (PMPM) cost for the year. Understanding the problem is a part of the solution, but making meaningful changes to the way plan sponsors and brokers evaluate PBMs is where the real opportunity lies.

• 3 thing to know about specialty pharmacy in 2024. Specialty drugs may be covered by a medical benefit (what patient-members likely think of as “their insurance”) or pharmacy benefits. There’s often a gray area for where specialty falls, but it can relate to whether the drug is being administered in a clinical setting, like a doctor’s office, outpatient clinic, or infusion center. Reimbursement for these drugs can also vary between average wholesale price (AWP) for pharmacy reimbursement and average sales price (ASP) for the medical benefit. It’s complex to compare, and both ASP and AWP are used in the health care industry, but they’re different. ASP is a government-regulated tool that uses manufacturer sales information including discounts, such as rebates. AWP is the average price that wholesalers sell drugs to pharmacies, prescribers, and others. A government report found the median percentage difference between ASP and AWP to be 49%.

• Cigna Group to Sell Medicare Businesses to Health Care Service Corporation (HCSC). The Cigna Group today announced that it has entered into a definitive agreement whereby Health Care Service Corporation (HCSC) will acquire The Cigna Group’s Medicare Advantage, Cigna Supplemental Benefits, Medicare Part D and CareAllies businesses, for a total transaction value of approximately $3.7 billion. As part of the transaction, The Cigna Group and HCSC have agreed to enter into a four-year services agreement under which Evernorth Health Services, a subsidiary of The Cigna Group, will continue to provide pharmacy benefit services to the Medicare businesses, effective on closing of the transaction.

The healthcare landscape is constantly evolving, and one notable change that’s garnering attention is the shift of J-code drugs to pharmacy benefits. This shift has wide-ranging implications for patients, healthcare providers, and insurers alike. In this post, we delve into the benefits and challenges of this move, offering a balanced perspective that is essential for stakeholders in the healthcare industry.

Understanding J-Code Drugs

Before we dive into the specifics, let’s clarify what J-code drugs are. These are typically injectable drugs administered in a physician’s office. They are categorized under ‘J-codes’ in the Healthcare Common Procedure Coding System (HCPCS). These drugs have traditionally been covered under medical benefits but are increasingly being moved to pharmacy benefits.

The Shift to Pharmacy Benefits: Benefits and Challenges

Benefits of the Shift

1. Cost Transparency: Pharmacy benefits often come with clearer cost information, making it easier for patients to understand and manage their expenses.
2. Streamlined Administration: This transition can simplify administrative processes, potentially reducing the paperwork and time involved in drug dispensing.
3. Potential for Lower Costs: Through pharmacy benefits, there might be better negotiation leverage for prices, potentially leading to lower costs for patients.
4. Enhanced Medication Management: Pharmacy benefits could offer better support in medication management, ensuring adherence and improving patient outcomes.
5. Broader Access to Discounts and Rebates: Patients might benefit from discounts and rebates that are more readily available through pharmacy benefits.

Challenges of the Shift

1. Access Issues: Patients might face more restrictions, such as limited networks of preferred pharmacies, impacting their access to necessary medications.
2. Complex Approval Processes: The transition might involve more complex prior authorization processes, potentially delaying treatment.
3. Disruption of Care: Switching systems could disrupt existing care plans, causing inconvenience and potential health risks for patients.
4. Insurance Plan Limitations: Some insurance plans might offer less favorable terms for pharmacy benefits, impacting coverage and costs.
5. Challenges in Coordination of Care: Coordinating care between healthcare providers and pharmacies can be complex and time-consuming.

J-code drugs are typically injectable drugs that are administered primarily in a physician’s office. Moving these to the pharmacy benefit could have several implications. Here’s a table that outlines some potential benefits and challenges:

Implications for Stakeholders

For Patients

Patients need to be aware of how this shift could affect their access to medication and overall costs. Understanding the nuances of their insurance plans is more crucial than ever.

For Healthcare Providers

Providers must navigate the new administrative landscapes, ensuring that they can still deliver the best care while dealing with different billing and authorization processes.

For Insurers

Insurers play a critical role in this transition, balancing the need to manage costs while ensuring patient access to necessary treatments.

For Pharmacists

Pharmacists will likely see an increased role in patient care, requiring a deeper understanding of J-code drugs and associated management protocols.

Conclusion

The transition of J-code drugs to pharmacy benefits is a complex process with both benefits and challenges. It’s essential for all stakeholders to stay informed and adapt to these changes to ensure that patient care remains effective and efficient. As the healthcare industry continues to evolve, staying ahead of trends like this will be key to navigating the future of healthcare successfully.

5 ways to improve your PBM procurement process in 2024 and other notes from around the interweb:

• Federal mandates bring big lawsuit worries for health plan administrators. The Consolidated Appropriations Act of 2021, enacted on December 27, 2020, introduces significant new disclosure mandates for health plan providers, heightening the risk of substantial legal challenges. This Act amends the Employee Retirement Income Security Act of 1974, aiming to enhance transparency in employee health benefit plans. The implementation of various components of this law has been gradual, with compliance deadlines for certain sections only recently becoming due. Jennifer S. Berman, a seasoned employee benefits attorney and compliance consultant, emphasizes the surge in fiduciary responsibilities for sponsors of health and welfare plans. Three years into the enactment of the CAA, plan sponsors are diligently working to fulfill these newly imposed duties. This legislation represents more than a mere federal requirement for health plan administrators. It carries the potential for significant class-action lawsuits against plans that fail to comply with the updated legal requirements.

• 5 ways to improve your PBM procurement process in 2024. Many self-funded plan sponsors struggle to manage the cost of pharmacy benefits and rely on non-transparent contract guarantees to hold PBMs accountable. Meanwhile, drug spending continues to compound at an astonishing rate in defiance of the savings promised during the procurement process. As a former pharmacy program director for a plan covering more than 16,000 lives, I can tell you that it is possible to stop the “games” PBMs play, control costs, and ensure that all contractual guarantees are met, especially in scenarios where a PBM won’t guarantee an all-in per member per month (PMPM) cost for the year. Understanding the problem is a part of the solution, but making meaningful changes to the way plan sponsors and brokers evaluate PBMs is where the real opportunity lies.

• 3 thing to know about specialty pharmacy in 2024. Specialty drugs may be covered by a medical benefit (what patient-members likely think of as “their insurance”) or pharmacy benefits. There’s often a gray area for where specialty falls, but it can relate to whether the drug is being administered in a clinical setting, like a doctor’s office, outpatient clinic, or infusion center. Reimbursement for these drugs can also vary between average wholesale price (AWP) for pharmacy reimbursement and average sales price (ASP) for the medical benefit. It’s complex to compare, and both ASP and AWP are used in the health care industry, but they’re different. ASP is a government-regulated tool that uses manufacturer sales information including discounts, such as rebates. AWP is the average price that wholesalers sell drugs to pharmacies, prescribers, and others. A government report found the median percentage difference between ASP and AWP to be 49%.

• New limits on prior authorization hailed as good first step. New federal rules requiring health insurers to streamline requests to cover treatments are being hailed as a good first step toward addressing a problem that’s increasingly aggravated patients and doctors. Health insurers will have to provide coverage decisions on urgent treatment requests within 72 hours for patients in Medicare Advantage, Medicaid or Affordable Care Act plans under federal rules finalized Wednesday. The deadline is seven days for non-urgent requests. Insurers’ requirements for their sign-off on some physician-ordered care is a major tension point with providers and has faced recent scrutiny from Congress. The new protocols, which largely take effect in 2026, may cut the review process in half for some insurers.

The upcoming modifications in the Medication Therapy Management (MTM) program by CMS are expected to significantly expand eligibility, with an estimated increase in eligible Medicare beneficiaries from 4.5 million to 11 million. CMS doubles down on medication therapy management (MTM), with program expansion, as self-funded employers remain indifferent to MTM’s vast benefits.

The new eligibility criteria, taking effect in 2025, will include (1) require Part D sponsors to include all core chronic diseases in their targeting criteria, codify the current 9 core chronic diseases in regulation, and add HIV/AIDS for a total of 10 core chronic diseases, (2) lower the maximum number of covered Part D drugs a sponsor may require from 8 to 5 drugs and require sponsors to include all Part D maintenance drugs and (3) revise the cost threshold methodology based on the average annual cost of 5 generic Part D drugs ($1,004 in 2020). These changes are projected to add approximately $336 million annually to plan costs.

MTM is a key strategy to leverage pharmacy-led initiatives to reduce medical costs. By focusing on identifying and resolving Drug Therapy Problems (DTPs), pharmacists can play a crucial role in conducting comprehensive medication reviews (CMRs), enhancing both health outcomes and cost efficiency. The savings generated can then be reinvested into the MTM program, potentially making it self-sustaining.

The revised MTM guidelines will require Part D plans to include members with up to three chronic conditions, taking at least five Part D drugs, and meeting a lowered annual spending threshold. This will necessitate a more comprehensive approach in CMRs, including real-time consultations through telehealth or in-person visits. To optimize their pharmacy benefit management program, self-funded employers should focus on four main strategies:

1. Technological Integration in Pharmacy Workflows: Utilizing platforms that combine medical and pharmacy claims data can help identify a wider range of DTPs, enabling more effective CMRs and facilitating cost reduction.
2. Infrastructure Scalability: Evaluating current technology and infrastructure for their ability to handle increased demand and provide scalable solutions is crucial.
3. Proactive Member Eligibility Identification: Tools that can predict future eligibility and manage enrollment processes will be essential for efficient MTM service delivery.
4. Continuous Program Monitoring: Implementing tools for real-time monitoring and analysis will help in identifying cost-saving opportunities and ensuring the effectiveness of the MTM program.

Self-funded employers would serve themselves extremely well by taking a page from the CMS playbook. By embracing a data-driven approach and focusing on efficiency and scalability, self-funded employers can adopt a CMS-like medication therapy management (MTM) expansion, achieving total cost of care savings and maintaining high-quality service for members with multiple medications and conditions.