Understanding the Consolidated Appropriations Act (CAA) for Pharmacy Benefit Management

As a CHRO, it’s crucial to stay informed about the impact of the CAA on your fiduciary responsibilities in managing pharmacy benefits. Here are ten key aspects in understanding the Consolidated Appropriations Act (CAA) for pharmacy benefit management:

  1. Enhanced Fiduciary Responsibility: Prioritize the best interests of plan participants.
  2. Transparency Requirements: Demand greater financial transparency from PBMs.
  3. Disclosure of Direct and Indirect Compensation: Obtain detailed disclosures on all PBM compensation.
  4. Reasonableness of Fees: Ensure PBM fees are reasonable and reflect service value.
  5. Annual Reporting Obligations: Review detailed annual reports on drug pricing and utilization.
  6. Prohibited Contractual Provisions: Comply with prohibitions on gag clauses and other restrictions.
  7. Monitoring and Auditing Rights: Regularly audit PBM activities and data.
  8. Plan Sponsor Responsibilities: Actively manage PBM relationships and performance.
  9. Participant Disclosure Requirements: Provide clear information to participants about benefits and costs.
  10. Penalties for Non-Compliance: Avoid penalties by adhering to CAA requirements.

📚 Continuous Learning is Key 📚

Engage in ongoing education and training to stay updated on regulatory changes and industry best practices. This will ensure you are well-equipped to navigate the complexities of the CAA and maintain compliance, ultimately protecting the interests of your plan participants and organization. Understanding the Consolidated Appropriations Act (CAA) for pharmacy benefit management is a key aspect of plan fiduciary responsibility.

Health plan sponsors must manage plan assets wisely and solely for the benefit of participants and beneficiaries. Fiduciaries are expected to possess expertise in their field or to seek guidance from subject-matter experts. The standard they must meet is that of a prudent expert, not just a well-intentioned layperson. Merely making a good faith effort does not suffice.

Mastering PBM Negotiations with Effective Strategies for Employers and Benefits Consultants

The video “Unlocking the Secrets of PBMs: Strategies to Navigate Their Profit Tactics” is an insightful 59-minute presentation designed to equip employers and benefits consultants with the necessary tools to effectively manage and negotiate with pharmacy benefit managers (PBMs). Over the course of the video, viewers are introduced to the various profit-making tactics employed by PBMs and the impact these can have on pharmacy costs and patient outcomes. Mastering PBM negotiations is an essential tool for CHROs, CFOs, and benefits consultants.

Key sections of the video delve into understanding the opaque pricing models that PBMs often use, which can obscure actual drug costs and complicate efforts to ensure fair pricing. The video provides practical strategies to unveil these hidden costs and leverage this transparency in negotiations. It also discusses the importance of contract clarity and how to ensure contracts are devoid of loopholes that could increase costs unexpectedly.

Furthermore, the video highlights the significance of staying informed about industry trends and regulatory changes that can affect PBM contracts. It advises on building a collaborative relationship with PBMs while maintaining a vigilant stance that prioritizes fiduciary responsibilities. For employers and benefits consultants, this video is an essential tool, offering actionable advice on how to reduce pharmacy costs without compromising on the quality of patient care.

Evaluation of Top 10 Pharmacy Benefit Manager Clinical Programs

This document presents a detailed evaluation of the top 10 clinical programs offered by pharmacy benefit managers (PBMs), which are pivotal for optimizing drug management and enhancing patient care while maintaining cost-effectiveness. The evaluation of top 10 pharmacy benefit manager clinical programs is methodically ranked, each program focusing on various aspects of clinical pharmacy benefit management.

  1. Formulary Management: Topped by dynamic formulary adjustments, this program ensures regulatory compliance and the integration of clinical evidence to drive value-based decisions.
  2. Specialty Pharmacy Management: This handles complex conditions through specialty pharmacies, emphasizing treatment adherence and efficiency.
  3. Prior Authorization: Focused on fraud and waste prevention, this program maintains robust prior authorization processes with an approval rate below 70%.
  4. Disease Management: Offers disease-specific guidelines and regular patient monitoring to enhance patient safety and health outcomes.
  5. Medication Therapy Management (MTM): A comprehensive review of patient medications is combined with education and adherence programs to improve health impacts.
  6. Benzodiazepine Management: This focuses on safe prescribing practices and patient education regarding the risks associated with benzodiazepines.
  7. Generic Substitution: Promotes the use of generic drugs to enhance cost transparency and increase generic dispensing rates.
  8. Medication Adherence: Utilizes medication synchronization and refill reminders to improve the proportion of days covered.
  9. Opioid Management: Enforces guidelines on opioid prescribing, patient education on risks, and drug take-back options to manage opioid use effectively.
  10. Step Therapy: Implements clear, evidence-based guidelines for medication sequences to ensure clinical and cost-effectiveness.

Each program is backed by best practices and involves key stakeholders like Pharmacy Directors, Healthcare Providers, and Pharmacy & Therapeutics Committees, ensuring a holistic approach to pharmacy benefits management. This ranking is crafted to assist Chief Human Resources Officers (CHROs) and Chief Financial Officers (CFOs) in making informed decisions about which clinical programs can best meet their organizational needs, align with financial goals, and ensure patient safety and satisfaction.

New Lawsuit Targets Opioid Pharmacy Benefit Managers [Weekly Roundup]

New lawsuit targets opioid pharmacy benefit managers and other notes from around the interweb:

  • New Lawsuit Targets Opioid Pharmacy Benefit Managers. The case is before federal Judge Dan Aaron Polster of the United States District Court for Northern Ohio based in Cleveland. “Judge Polster recently opened a new bellwether track of cases against Express Scripts and OptumRx, two of the three PBMs with the largest market share in the United States,” according to the National Opioid Litigation letter. The other company in that top three is CVS Caremark, a subsidiary of CVS Health, that was included in a recent $10 billion settlement that also involved Walgreens…”About those companies, Marcus told the commissioners, “They chose profits over doing the right thing.”
  • Fiduciary Duty Update: PBM Audit is Now Mandatory Protocol. The revelation that a drug costing over $10,000 in the market could be sourced for $28.40 has sent shockwaves through the industry, illustrating a glaring oversight in PBM management. Auditing your PBM is not merely a best practice; it is a critical safeguard against financial inefficiency and legal liabilities. Audits reveal discrepancies in billing, conflicts of interest, and non-compliance with contract terms — issues that, if unaddressed, could lead to breach of fiduciary claims.
  • Audit of the American Postal Worker’s Union Health Plan’s Pharmacy Operations. “We found that the PBM overcharged the Carrier and the FEHBP $44,882,688 (including lost investment income) by not passing through all discounts and credit related to prescription drug pricing that were required under the PBM Transparency Standards found in the Carrier’s contract with the OPM. Specifically, our audit identified the following six findings that require corrective action. The findings occurred across all years of the auto scope unless otherwise noted.”
  • Why Are Cash Prices Lower Than Health Insurance Negotiated Prices? Growing evidence demonstrates a counterintuitive phenomenon in healthcare: the cash price is often cheaper than insurance prices for the same service or product. Cash prices are unilaterally determined by a provider, while insurance prices are bilaterally negotiated between a provider and an insurance company. Don’t insurance companies presumably possess more bargaining power than individual patients? Our study found that among common shoppable services—such as lab tests, imaging, and joint replacements—half of U.S. hospitals set cash prices lower than their median insurance negotiated prices. Cash price being cheaper than insurance prices has also been documented for prescription drugs.

The Vital Role of Information Technology Department in PBM Industry

In the modern healthcare landscape, the Pharmacy Benefits Manager (PBM) industry stands as a pivotal intermediary between patients, healthcare providers, and pharmaceutical companies. PBMs play a crucial role in managing prescription drug benefits for health insurance plans, ensuring cost-effective access to medications for millions of individuals. However, behind the scenes of this complex ecosystem lies a fundamental pillar driving efficiency, innovation, and seamless operations—the Information Technology (IT) department.

The convergence of healthcare and technology has transformed the way PBMs operate, and the IT department serves as the engine powering this transformation. From streamlining processes to safeguarding sensitive data, the IT team within a PBM organization plays a multifaceted role that directly impacts the quality of care delivered to patients and the effectiveness of prescription drug benefit management.

1. Infrastructure and Systems Management

At the core of every PBM’s operations lies a robust infrastructure comprising databases, networks, and software systems. The IT department is responsible for designing, implementing, and maintaining this infrastructure to ensure seamless connectivity and data accessibility across various stakeholders. From electronic health records (EHR) integration to claims processing platforms, IT professionals deploy and manage the technological backbone that supports the entire PBM ecosystem.

2. Technical Implementations with Third-Party Administrators

Within the Pharmacy Benefits Manager (PBM) industry, the Information Technology (IT) department plays a crucial role in managing technical implementations with third-party administrators (TPAs). This entails overseeing the integration of systems, data exchange protocols, and ensuring seamless connectivity between the PBM’s infrastructure and the systems utilized by TPAs. The IT team collaborates closely with TPAs to configure interfaces, establish secure connections, and troubleshoot any technical issues that may arise during the implementation process. By leveraging their expertise in software integration, network architecture, and data management, the IT department ensures that the partnership between the PBM and TPAs operates smoothly, facilitating efficient prescription drug benefit management and enhancing the overall customer experience.

3. Data Analytics and Business Intelligence

In an industry driven by data, PBMs rely on sophisticated analytics to identify trends, manage costs, and optimize patient outcomes. The IT department plays a pivotal role in developing and maintaining data analytics platforms that sift through vast amounts of information to provide actionable insights. By leveraging technologies such as artificial intelligence and predictive analytics, IT teams help PBMs make informed decisions regarding formulary management, medication adherence programs, and provider network optimization.

4. Security and Compliance

With the increasing digitization of healthcare data, ensuring the security and privacy of sensitive information is paramount. The IT department within a PBM organization is tasked with implementing robust cybersecurity measures to safeguard patient data from unauthorized access, breaches, and cyber threats. Moreover, IT professionals work closely with regulatory bodies to ensure compliance with stringent healthcare regulations such as the Health Insurance Portability and Accountability Act (HIPAA).

5. Digital Health Innovation

As healthcare continues to embrace digital transformation, PBMs are leveraging innovative technologies to enhance patient engagement and medication management. The IT department works to develop and deploy digital health solutions such as mobile applications, electronic Prior Authorization platforms, etc. These technologies not only empower patients to take control of their health but also facilitate real-time communication between healthcare providers, pharmacists, and insurance companies.

6. Customer Experience Enhancement

In an era where customer experience reigns supreme, PBMs are leveraging technology to streamline processes and enhance service delivery. The IT department plays a critical role in developing user-friendly portals, automated communication systems, and interactive tools that empower patients to navigate their prescription drug benefits with ease. By prioritizing usability and accessibility, IT professionals contribute to improving patient satisfaction and loyalty while driving operational efficiency within the PBM organization.

7. Collaboration and Integration

Effective communication and collaboration are essential for the seamless coordination of care within the healthcare ecosystem. The IT department acts as a catalyst for integration, facilitating interoperability between disparate systems used by pharmacies, healthcare providers, and insurance companies. IT professionals enable the seamless exchange of patient information, prescriptions, and clinical data across different stakeholders.

Conclusion

In the Pharmacy Benefits Manager industry, the role of the Information Technology department cannot be overstated. From infrastructure management to data analytics, cybersecurity, and digital innovation, IT professionals play a pivotal role in driving efficiency, enhancing patient care, and ensuring compliance within PBM organizations. As healthcare continues to evolve, the collaboration between IT and healthcare professionals will be instrumental in shaping the future of prescription drug benefit management and improving health outcomes for individuals worldwide.

Top Ten Pharmacy Benefit Manager Utilization Management Programs

Ranking the top utilization management (UM) programs used by Pharmacy Benefit Managers (PBMs) can be complex due to the proprietary nature of specific tools and strategies employed by different organizations. However, several key types of UM programs are commonly recognized as effective in managing pharmacy benefits and controlling costs while ensuring patient care. Here’s TransparentRx’s ranking of the top ten pharmacy benefit manager utilization management programs:

Pharmacy benefits must be carefully managed to ensure people receive cost-effective treatment, improving their well-being and helping them lead happier, longer lives. This also enables employers to maintain a healthy and engaged workforce. These UM programs form the core of what many top PBMs use to manage drug utilization effectively. Each program has its strengths and plays a critical role in balancing cost containment with the provision of high-quality care. The specific effectiveness and ranking can vary depending on the specific health populations managed and the overall strategy of the PBM.

Audit of the American Postal Worker’s Union Health Plan’s Pharmacy Operations [Weekly Roundup]

Audit of the American Postal Worker’s Union Health Plan’s Pharmacy Operations and other notes from around the interweb:

  • Audit of the American Postal Worker’s Union Health Plan’s Pharmacy Operations. “We found that the PBM overcharged the Carrier and the FEHBP $44,882,688 (including lost investment income) by not passing through all discounts and credit related to prescription drug pricing that were required under the PBM Transparency Standards found in the Carrier’s contract with the OPM. Specifically, our audit identified the following six findings that require corrective action. The findings occurred across all years of the auto scope unless otherwise noted.”
  • Why Are Cash Prices Lower Than Health Insurance Negotiated Prices? Growing evidence demonstrates a counterintuitive phenomenon in healthcare: the cash price is often cheaper than insurance prices for the same service or product. Cash prices are unilaterally determined by a provider, while insurance prices are bilaterally negotiated between a provider and an insurance company. Don’t insurance companies presumably possess more bargaining power than individual patients? Our study found that among common shoppable services—such as lab tests, imaging, and joint replacements—half of U.S. hospitals set cash prices lower than their median insurance negotiated prices. Cash price being cheaper than insurance prices has also been documented for prescription drugs.
  • Fiduciary Duty Update: PBM Audit is Now Mandatory Protocol. The revelation that a drug costing over $10,000 in the market could be sourced for $28.40 has sent shockwaves through the industry, illustrating a glaring oversight in PBM management. Auditing your PBM is not merely a best practice; it is a critical safeguard against financial inefficiency and legal liabilities. Audits reveal discrepancies in billing, conflicts of interest, and non-compliance with contract terms — issues that, if unaddressed, could lead to breach of fiduciary claims.
  • How GoodRx Helped Steal $7 From My Pharmacy. GoodRx, primarily known as a platform for obtaining prescription coupons and tracking drug prices, interacts with Pharmacy Benefits Managers (PBMs) in a way that’s distinct from traditional PBM operations. In essence, GoodRx leverages the existing PBM infrastructure to provide discounted prices directly to consumers, often bypassing the more traditional insurance-based prescription purchasing pathway. For benefits consultants and employers, understanding this interaction is crucial in advising on healthcare strategies that maximize both cost efficiency and patient outcomes. Employers need to consider how tools like GoodRx fit into a broader benefits design, particularly in terms of how they affect out-of-pocket costs for employees and the overall usage of pharmacy benefits managed under traditional PBM contracts.