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

Pharmacy-benefit managers for the state-employee health insurance program are challenging an attempt to require them to repay $39.2 million to the Florida Department of Management Services.

Medco Health Solutions, Inc. and Express Scripts, Inc., which are subsidiaries of the same holding company, have filed a series of legal petitions that were sent this month to the state Division of Administrative Hearings.

The documents indicate the Department of Management Services is seeking to recoup $39.2 million in what it considers “plan overpayments” and that it decided to withhold payments to the companies as a result.

Medco Health Solutions entered into a contract in 2011 to manage prescription-drug benefits for state employees and in 2012 was acquired by Express Scripts Holding Company, according to the documents.

Pharmacy-benefit managers analyze prescription-drug requests and determine whether they should be filled. The department alleges, at least in part, that the companies refilled prescriptions too soon, according to the documents. Refilling prescriptions before necessary can increase costs.

Publisher Comment:  This is a new one!  Typically, PBMs authorize refills when a patient has used 75% or more of their initial supply.  Having said that, at what point (e.g. 50%, 65% or > 70%) did ESI permit refills?  Remember, traditional PBMs hire and train people specifically to drive incremental revenue, at the account level, deploying similar tactics. It would not surprise me if ESI saw this as an opportunity to hide cash flow.  If proven true this is nefarious.  Plan sponsors should stipulate in contracts that refills are permitted only when a patient’s remaining supply is 25% or less.  Of course, a fiduciary contract would prevent this sort of thing from happening or at the very least provide a means for indemnification.  

Medco Health Solutions and Express Scripts dispute the allegations and that they should be required to reimburse the department.

“(Even) if the department were correct that refills were filled too soon, the remedy is not for Express Scripts to reimburse the department for the total costs of these prescriptions,” company attorneys wrote.

“The department is not asserting that the refills should have never been provided, just that they were provided a few days early. The members still received their proper medications; still used their medications; and it is only proper for the state to continue to pay for those proper medications.”

By News Service of Florida

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

A survey released last week by the National Business Group on Health found that benefit cost increases are expected to remain firm next year as a result of changes many employers are making to benefit plans. Meanwhile, almost half of the 140 large national employers surveyed indicated that if additional measures to control costs are not taken, at least one of their health plans will reach the benchmark that triggers the “Cadillac” excise tax under the Affordable Care Act in 2018.

“The need to control rising health care benefits costs has never been greater,” said Brian Marcotte, president and CEO of the National Business Group on Health. “Rising costs have plagued employers for many years, and now the looming excise tax is adding pressure. Employers only have 2 more years to bend the cost curve before the excise tax goes into effect in 2018. And while employers are pursuing several strategies to keep their plans under the excise tax threshold, they estimate their actions will only delay the impact by 2 to 3 years.”

The survey found that employers project health care benefit costs to increase 6% in 2016, which would mirror the increase employers would have seen this year if there were no changes made to their plan design. Many employers project increases to remain at 5% for the third consecutive year through these plan changes, which include greater cost-sharing provisions, the adoption of consumer-directed health plans (CDHPs), and increased wellness initiatives.

The survey found that by 2020, nearly 72% of employers anticipate one of their plans to trigger the excise tax, as the benefit plan with the greatest enrollment could only lag one year behind. To delay the impact of the excise tax, 76% of employers said they will add or expand CDHPs and consumerism tools, with 70% stating they will expand current wellness programs.

The survey results showed that for 43% of employers, the top driver of rising health care costs is high cost claimants. Meanwhile, the growing cost of specialty pharmacy, specific diseases or conditions, and overall medical inflation were also implicated for spending increases.

None of the employers said they plan to eliminate health care coverage and pay the penalty for it, but some indicated they will continue to examine whether private exchanges are viable. By the end of 2015, 3% of employers will have moved active employees to a private exchange, the study noted.

– See more at: http://www.specialtypharmacytimes.com/news/specialty-drug-costs-prompt-employers-to-tighten-their-belts#sthash.0yfRbyBl.dpuf

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

More than half of large employers in 2016 will aim to more tightly manage employees’ use of high-priced specialty drugs, one of the fastest-growing expenses in their health plans.

Despite those efforts, companies still expect the cost of specialty drugs that are carefully administered to treat conditions such as cancer, HIV and hepatitis C to continue rising at a double-digit annual rate — well ahead of the pace for traditional pharmacy drugs or companies’ overall spending on health benefits, according to the National Business Group on Health.

The group released a survey Wednesday that found 55 percent of employers next year plan to direct employees to specialty pharmacies if they need drugs that can cost thousands of dollars for a single treatment. That share was up from a third in the group’s survey a year ago on companies’ plans for 2015 health plans.

More companies also say they will require employees to get prior authorization before buying specialty drugs under the employer’s health plan — 53 percent vs. 29 percent a year ago.

The survey, conducted May 19-June 24, reflects the plans of 140 employers who insure more than 10 million people in total, including employees and their families.

What’s driving companies’ focus on the price of specialty drugs is the anticipated 2018 arrival of a federal excise tax on high-cost health plans. Under the Affordable Care Act, employers could be subject to a 40 percent tax on the amounts by which the costs of their sponsored plans exceed government-set thresholds. Revenue from the so-called “Cadillac Tax” is meant to help pay the cost of providing health insurance under the health law to previously uninsured Americans and curb growth in health care spending.

Nearly half of employers surveyed by the National Business Group on Health said at least one of their health plans will exceed the excise tax threshold in 2018 if they did not make any changes. The majority of employers said they expect overall health plan costs in 2016 to rise by 5 percent on average after health plan changes are made.

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

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

Well there was a video, but I suspect CVS flexed its muscle and now there isn’t a trace of it. Mail-order pharmacy services too may not deliver the cost savings promised during the sales pitch which won the legacy PBM your business. In fact, this practice of overcharging is a notorious cash cow for so called transparent or pass-through pricing PBMs whom offer prescriptions via mail-order pharmacy.  Think about it…their first priority is shareholder return on equity not eliminating overpayments from clients.

No matter what you’re being told – your PBM is not fully transparent unless it provides a fiduciary standard of care. Most pharmacy benefit managers will overcharge its clients at every available opportunity. Unless of course the PBM offers a fiduciary standard of care and commits to it in writing.

Instead of the typical fee-for-service contract obtain a fiduciary contract which guarantees “net” ingredient cost for prescription drugs dispensed as part of your prescription drug plan. Better yet, create your own fiduciary contract and put it out for bid vis-à-vis a reverse auction. See my earlier blog post, “Time to Blow Up Your PBM Strategy” to learn more about reverse auctions.

Employers pay a higher admin fee with fiduciary contracts, but in the end total costs are significantly reduced. Furthermore, the price paid is completely transparent; there are no [legal] hidden fees. Of course, none of what I’m writing will make much difference if your PBM team is not well-trained or indifferent to change.