After CMS Releases Chargemaster Data, Hospitals Mull Price Changes
By contrast, Rick Davis, CEO of Central Peninsula Hospital in Soldotna, Alaska, told Kaiser he believes his prices are fair and doesn’t expect them to change.
A Federal Agency (CMS) has Requested Copies of our Purchase Invoices for Wholesale Prescription Drugs
New Report Shows Drugstore Lobby Agenda Raises Rx Costs for Small Businesses and Government Programs
“This report shows policymakers that appeasing the drugstore lobby means higher prescription drug costs for small businesses, consumers, and government programs,” said Pharmaceutical Care Management Association (PCMA) President and CEO Mark Merritt.
Click here to read the NCPA report which highlights a number of regulations and laws that could increase prescription drug costs, including:
Barriers to Competition: State Boards of Pharmacy Conflict of Interest Background: The report highlights how some states are seeking to transfer regulatory authority of drug plans from the state’s insurance commissioner to the state’s Board of Pharmacy.
NCPA: “Because state pharmacy boards are controlled by pharmacists, giving them authority over drug plans creates conflicts of interest that could undermine drug plans’ ability to negotiate lower prices with pharmacy networks.”
Barriers to Lower Cost Mail-Service Pharmacies Background: Employers and payers use a variety of incentives to encourage patients to use efficient mail-service pharmacies to address chronic illnesses, such as diabetes. Mail-service pharmacies will save Medicare seniors, employers, unions, government employee plans, consumers, and other commercial-sector payers $46.6 billion in prescription drug costs over the next ten years.
NCPA: “Unfortunately, some states are enacting laws that interfere with the ability of drug plans to reward enrollees that use the plan’s mail order option by barring drug plans from offering lower prices for mail-order dispensing. This unnecessarily raises costs for consumers, insurers and employers. Obviously, these laws mostly aim to benefit local community pharmacies rather than consumers.”
Barriers to Competitive Pharmacy Networks Background: A new study finds that the extraordinary number of pharmacies in the United States offers an opportunity to save $115 billion over the next decade through the greater use of preferred and limited pharmacy networks. However, some states have in place so-called “any willing pharmacy” laws and regulations that force plans to contract with pharmacies that don’t meet their quality standards or geographic access needs.
NCPA: “These any-willing-pharmacy laws are costly to taxpayers, employers and patients alike. The Federal Trade Commission notes that these laws reduce the drug plans’ bargaining power, leading to higher drug prices and higher premiums for consumers.”
Barriers to Efforts to Combat Fraud Background: Health care fraud is a problem that increases overall health costs and is especially burdensome in Medicare and Medicaid. Billions of claims are submitted to millions of providers, making fraudulent claims easy to disguise. PBMs and companies processing electronic payments are effective at discovering irregularities that lead to fraud.
NCPA: “Regulations requiring Medicare drug plan administrators to pay claims within 14 days make it difficult to detect fraud before a claim has been paid. At the very least, drug plans need the authority to delay paying questionable claims to providers suspected of fraud. Plans also need greater authority to exclude or suspend suspected fraudulent providers from networks and conduct routine audits of participating pharmacies.
“Congress and state legislatures should avoid well-meaning, but ill-conceived, regulations intended to protect consumers, which often have the opposite result. A better way to ensure desirable outcomes is to promote a competitive environment free of market distortions that favor one party over another.”
Barriers to Lower Cost Dispensing Fees Background: Dispensing fees paid to drugstores and pharmacists that are mandated and set by states are much higher than in commercial drugs plans. The average Medicaid dispensing fees range from $1.75 in New Hampshire to $10.64 in Alabama, averaging about $4.81 per prescription across the country. By contrast, privately managed Medicare Part D plans negotiate fees with pharmacies of about $2 per prescription.
NCPA: “Dispensing fees in state-managed, conventional Medicaid plans are set by the state. State officials and state legislatures often yield to political pressure and set dispensing fees that are much higher than what private drugs plans could negotiate if allowed to do so. When the fees are set too high, taxpayers pay pharmacies more than they would in a competitive market.”
PCMA represents the nation’s pharmacy benefit managers (PBMs), which improve affordability and quality of care through the use of electronic prescribing (e-prescribing), generic alternatives, mail-service pharmacies, and other innovative tools for 215 million Americans.
Small Pharmacies Getting Squeeze from Goliath PBMs
March 27, 2013 — Central Drugs Pharmacy has been open for 110 years in downtown Portland, and it specializes in dispensing drugs for those who suffer from HIV.
Insurance Commissioner Refuses to Enforce Obamacare
“It is unfortunate that health insurers are being forced into a system of dual regulation by the overreaching Obama administration,” Doak said. “My position on this has never wavered and I welcome every opportunity to try to overturn Obamacare.”
The letter was sent to CCIIO Deputy Administrator and Director Gary Cohen indicating that the Oklahoma Insurance Department does not have the authority to enforce federal law. In the letter, Doak wrote, “I execute my duties collaboratively with the governor and legislature of Oklahoma to meet the needs of the citizens we represent and the requirements of the Insurance Code of the Oklahoma Statutes.”
“The Oklahoma Insurance Department regulates the health insurance policies sold in the state and responds to consumer questions and complaints. Our consumer assistance team receives over 30,000 phone calls and our website receives over 1,000,000 visits each year. We will continue to serve these consumers by adhering to our duties under the State Constitution and Statutes. The consumers are the ones who are going to bear the costs of these unnecessary federal regulatory burdens,” stated Doak.
In addition to adding new fees to health insurance products increasing prices both inside and outside the exchange, the ACA requires plans to add expensive and often unnecessary coverage benefits. These costs will impact young adults most severely due to the law’s requirement that older Americans pay no more than three times the premium of young adults. A survey of insurers by the American Action Forum found that average premiums for young, healthy adults may triple going into 2014.
The Oklahoma Insurance Department consumer assistance team is available to help consumers with issues regarding their current health insurance at 405-521-2828 and toll-free statewide at 800-522-0071.
About the Oklahoma Insurance Department
The Oklahoma Insurance Department, an agency of the State of Oklahoma, is responsible for the education and protection of the insurance-buying public and for oversight of the insurance industry in the state.
For more information contact:
Kelly Collins
(405) 522-0683
kelly.collins@oid.ok.gov
SOURCE Oklahoma Insurance Department
How to Control Specialty Pharmacy Costs?
- Hire a PBM willing to sign on as a fiduciary; transparent speak isn’t enough.
- Promote member use of manufacturer coupons for brand and specialty drugs. PBMs should communicate availability of all coupons to members.
- Pay only Cost Plus (no spreads or mark-ups) for all prescription drugs.
- Include a semi-annual market check in the contract language.
- Attain and exercise full auditing rights.
- Require the PBM to identify and pass along all sources of attributable revenue from manufacturers. Limiting agreements to ‘rebates’ leaves money on the table.
- Use Reference Pricing — different and much more effective (when applied) than an AWP reporting service.
*Cost Plus = [Acquisition Cost + dispensing fee + admin fee] minus Co-pay
Due in large part to specialty drugs, we are clearly entering a time of higher costs. Payers whom act now are in the best position to assure continued access to quality care for their members while effectively managing rising drug costs.
Click here to register for: “How To Slash the Cost of Your PBM Service, up to 50%, Without Changing Providers or Employee Benefit Levels.”
The #1 Way to Cut Employer Prescription Drug Costs
PBMs | All about the Benjamins
Contemplate this the next time you see some PBM product clearly aimed at the financially naive, like a disease management or mail-order program without any or very little audit privileges.
Sure the product in question takes care of the company’s overhead, but it’s also doing something else. It pays for the PBMs Gulfstream G650 so it is able to offer the “basic” services, such as claims adjudication, you need at a bargain price (i.e. low admin fees).
This phenomenon applies to other vendors as well; banks, auto repair shops, and lawyers just to name a few. All it takes is a little discipline – do the best thing for your company or the one which employs you.
Anyone with a major role in the PBM selection process should be the type of person who shops at Ross or TJ Maxx for designer clothing and not Neiman Marcus!
Mail-order. The PBM mail-order industry is a strange blend of good and evil. With usurious spreads it victimizes clients who haven’t secured a fiduciary agreement or at the very least binding transparency. It gives the rest of its clients a deal — convenience plus a savings compared to the less fortunate or should I say least knowledgeable.
Consider the price for Ranitidine 75 mg, the generic form of the popular anti-ulcer medication Zantac. One of our clients paid Express Scripts $36.22 for 90 pills mailed to a worker, who pays an additional $5 co-pay, bringing the total cost to $41.22, according to a re-pricing we completed.
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