In the complex world of healthcare, one aspect that often leaves both patients and healthcare providers frustrated is the prior authorization (PA) process, particularly in the realm of pharmacy benefits management (PBM). The term "prior authorization" refers to the practice of obtaining approval from a healthcare insurer or PBM before a prescribed medication or treatment can be covered by insurance. While the intention behind prior authorizations is to ensure appropriate and cost-effective care, the process has become a profit center, often favoring high-cost drugs over lower cost therapeutic equivalents or alternatives. In this article, we will delve into the intricacies of prior authorizations, discuss the role of electronic prior authorization (ePA) vendors, highlight common pitfalls, and explore ways to measure the effectiveness of this process. Understanding the Prior Authorization Process The prior authorization process begins when a healthcare provider prescribes a medication that falls under the coverage of the patient's insurance plan. The provider submits a request to the PBM or insurer, providing information about the patient's medical history, the prescribed medication, and the rationale for the treatment. The PBM then reviews the request to determine if the prescribed medication meets certain criteria for coverage, such as medical necessity, cost-effectiveness, and formulary compliance. If the PBM approves the request, the medication is covered by insurance. If not, the healthcare provider may need to explore alternative treatments or submit additional documentation to support the request. Scrutinize Every Claim, Click to Learn How The Role of Electronic Prior Authorization (ePA) Vendors To streamline and expedite the prior authorization process, many healthcare organizations have turned to electronic prior authorization (ePA) vendors. These vendors provide digital platforms that enable healthcare providers to submit prior authorization requests electronically, reducing the reliance on paper-based forms and fax machines. ePA vendors also offer real-time communication between providers and PBMs, making it easier to track the status of requests and receive timely decisions. CoverMyMeds, a leading electronic prior authorization (ePA) vendor, has grown to become one of the largest ePA platforms, serving as a bridge between healthcare providers, pharmacies, PBMs, and insurers. CoverMyMeds was acquired by McKesson Corporation in 2017. McKesson is a large healthcare services and pharmaceutical distribution company. Commonsense suggests drug wholesalers, like McKesson, want to get drugs out of their distribution centers as fast as possible. PA denials are inconsistent with drug wholesaler inventory turnover goals, for instance. Second to Optum's acquisition of Change Healthcare, McKesson's acquisition of CoverMyMeds is the largest conflict of interest in the pharmacy benefits management industry. The third most significant conflict of interest are non-fiduciary PBMs or their parent companies which own mail, retail and/or specialty pharmacies. Common Pitfalls of the Prior Authorization Process Despite the potential benefits of ePA vendors, the prior authorization process still faces several challenges. One of the most significant criticisms is the role of non-fiduciary PBMs. These PBMs are responsible for managing prescription drug benefits on behalf of insurers and employers, but they also have financial incentives that can conflict with patient care. Critics argue…

The Transformation of Blue Shield of California's Prescription Drug Model: What's Behind It and other notes from around the interweb: The Transformation of Blue Shield of California's Prescription Drug Model: What's Behind It? Blue Shield of California is significantly reducing its partnership connections with CVS Caremark, while simultaneously welcoming four new collaborators to enhance its prescription drug benefits network. Among these new associates are Mark Cuban's Cost Plus Drug Company and Amazon Pharmacy. According to Salina Wong, the Senior Director of Clinical Pharmacy Programs at Blue Shield of California, these shifts are essential to challenge the existing flawed system. Annual Report on Specialty Spend and Trends (2023). The seventh annual State of Specialty Spend and Trend Report uses integrated pharmacy and medical claims data to provide a holistic view of specialty drug spend and trends. First published in 2017, this report is the sole comprehensive analysis of specialty drug spending, powered by the industry’s leading integrated dataset through Artemetrx. Key takeaways include the percentage of members taking at least one specialty drug continues to rise (4%), while the average number of claims per person remains steady at 5 claims per year. Another key takeaway, specialty spend continues to shift from the medical benefit to the pharmacy benefit, the latter of which now accounts for 56.3% of spend. Become an Expert in Managing Pharmacy Benefits Playbook for Employers – Addressing PBM Misalignment. The guide, released by the National Alliance of Healthcare Purchaser Coalitions, identifies several key strategic recommendations that employers can adopt when looking to better navigate their relationship with PBMs. For one, the playbook recommends that employers find advisers that are genuinely putting in the work for them. Advisers should be independent and transparent, according to the guidebook, and contracts should be designed to ensure that PBMs act in the employer's best interest. "As we uncover these increasingly apparent anomalies, I think we’ve got to challenge ourselves to do better and most importantly require that our advisers, our middlemen and our intermediaries do better on our behalf," Mike Thompson, CEO of the alliance, told Fierce Healthcare. STAT News investigation takes deep dive into PBM broker conflicts of interest. Employers across the country — from big names like Boeing and UPS to local school systems — pay consulting firms to handle a straightforward task with their prescription drug coverage: Get the best deals possible, and make sure the industry’s middlemen, known as pharmacy benefit managers, aren’t ripping them off with unfair contracts. But a largely hidden flow of money between major consulting conglomerates and PBMs compromises that relationship, a STAT investigation shows. Some consulting firms often are getting paid more — a lot more — by the PBMs and health insurance carriers that they are supposed to scrutinize than by companies they are supposed to be looking out for.

As a CHRO or CFO on a buying committee, evaluating a pharmacy benefit manager (PBM) formulary is a critical task that requires careful consideration and attention to detail. Creating an effective PBM formulary requires expertise in the business of pharmacy benefits alongside clinician input. Here are ten key mistakes to avoid for enhanced patient care and cost savings: Lack of Clinical Evidence: Failing to base formulary decisions on robust clinical evidence can lead to inappropriate or ineffective drug choices. Always ensure that formulary decisions are supported by reliable clinical data, including randomized controlled trials and meta-analyses.Ignoring Comparative Effectiveness: Neglecting to compare the effectiveness of different drugs within the same therapeutic class can result in suboptimal drug choices and unnecessary costs. Always consider the relative efficacy and safety of available options.Limited Stakeholder Involvement: Not involving key stakeholders, such as physicians, pharmacists, and plan administrators, in formulary decision-making can lead to poor acceptance and compliance with the formulary. Engage all relevant parties to gain valuable insights and perspectives.Inadequate Consideration of Cost: Focusing solely on drug efficacy without considering the cost-effectiveness of treatments can lead to a formulary that is financially unsustainable for the PBM and its beneficiaries. Strive for a balance between clinical effectiveness and cost. For example, Fluoxetine 10 MG Capsules cost almost five times less than Fluoxetine 10 MG Tablets (see figure 1). Figure 1: NADAC (National Average Drug Acquisition Cost) 2023 Omission of Essential Medications: Overlooking essential medications or therapeutic classes can limit patient access to necessary treatments and compromise their health outcomes. Ensure that a broad range of medications is available to meet patient needs.Inconsistent Review Processes: Inconsistent or ad-hoc review processes can lead to inconsistent formulary decisions and a lack of transparency in the decision-making process. Establish clear and standardized criteria for formulary inclusion or exclusion.Failure to Address Access and Equity: Not considering the impact of formulary decisions on patient access and health equity can lead to disparities in care. Account for patient demographics, disease prevalence, and healthcare disparities when designing the formulary. A cost-effective formulary can be constructed with as few as 1,250 products accounting for dose variations or formulations.Insufficient Monitoring and Review: Neglecting to regularly monitor and reassess the formulary's performance can lead to missed opportunities for improvement and adaptation to changing healthcare needs and advancements.Inadequate Communication: Failing to communicate formulary changes effectively to prescribers, pharmacists, and patients can lead to confusion and disruptions in therapy. Implement clear and timely communication strategies to keep all stakeholders informed.Conflict of Interest: Allowing conflicts of interest to influence formulary decisions can compromise the integrity and fairness of the process. Ensure that committee members disclose potential conflicts and establish mechanisms to address and manage these conflicts appropriately. By avoiding these common mistakes and taking a comprehensive approach to formulary construction, you can be the impetus behind creating an effective PBM formulary. One that prioritizes patient care, cost-effectiveness, and clinical appropriateness.

Annual Report on Specialty Spend and Trends and other notes from around the interweb: Annual Report on Specialty Spend and Trends (2023). The seventh annual State of Specialty Spend and Trend Report uses integrated pharmacy and medical claims data to provide a holistic view of specialty drug spend and trends. First published in 2017, this report is the sole comprehensive analysis of specialty drug spending, powered by the industry’s leading integrated dataset through Artemetrx. Key takeaways include the percentage of members taking at least one specialty drug continues to rise (4%), while the average number of claims per person remains steady at 5 claims per year. Another key takeaway, specialty spend continues to shift from the medical benefit to the pharmacy benefit, the latter of which now accounts for 56.3% of spend. Become an Expert in Managing Pharmacy Benefits How Self-Funded Employers Can Use Point Solutions to Manage Pharmaceutical Costs. Point solutions are specialized tools or platforms designed to address specific issues or challenges faced by organizations. In the context of pharmaceutical cost management, point solutions provide targeted assistance in identifying cost-saving opportunities, improving medication adherence, streamlining prescription processes, and enhancing overall health outcomes. Before delving into the benefits of point solutions, it is essential for self-funded employers to gain a comprehensive understanding of their pharmaceutical costs. This entails assessing the utilization patterns, identifying high-cost drugs, analyzing prescription data, and exploring trends in pharmacy benefit claims. By closely examining these factors, employers can identify areas of potential savings and develop tailored strategies to optimize their pharmacy benefit plans. Playbook for Employers – Addressing PBM Misalignment. The guide, released by the National Alliance of Healthcare Purchaser Coalitions, identifies several key strategic recommendations that employers can adopt when looking to better navigate their relationship with PBMs. For one, the playbook recommends that employers find advisers that are genuinely putting in the work for them. Advisers should be independent and transparent, according to the guidebook, and contracts should be designed to ensure that PBMs act in the employer's best interest. "As we uncover these increasingly apparent anomalies, I think we’ve got to challenge ourselves to do better and most importantly require that our advisers, our middlemen and our intermediaries do better on our behalf," Mike Thompson, CEO of the alliance, told Fierce Healthcare. STAT News investigation takes deep dive into PBM broker conflicts of interest. Employers across the country — from big names like Boeing and UPS to local school systems — pay consulting firms to handle a straightforward task with their prescription drug coverage: Get the best deals possible, and make sure the industry’s middlemen, known as pharmacy benefit managers, aren’t ripping them off with unfair contracts. But a largely hidden flow of money between major consulting conglomerates and PBMs compromises that relationship, a STAT investigation shows. Some consulting firms often are getting paid more — a lot more — by the PBMs and health insurance carriers that they are supposed to scrutinize than by companies they are supposed to be looking…

PBM data analytics platform solutions provide specialized tools and services that analyze and interpret healthcare-related data to derive valuable insights. These insights can help employers make informed decisions, optimize their benefit programs, and improve employee health outcomes. In some cases, the right platform solution can help employee benefit brokers and consultants increase win rates. Here's how PBM data analytics platforms enhance medical and pharmacy benefit programs while simultaneously serving as a valuable point solution: Click to Learn More Benefit Program Optimization: Data analytics vendors can analyze healthcare utilization patterns, prescription drug data, and medical claims to identify trends and areas for improvement within the benefit program. Employers can use this information to make data-driven adjustments and tailor the program to better meet the needs of their workforce.Cost Containment: By analyzing claims data and pharmacy benefit usage, data analytics vendors can identify cost drivers and recommend strategies to contain healthcare spending without compromising the quality of care.Identifying High-Risk Individuals: Data analytics can be used to identify employees at risk for chronic conditions or those who may benefit from targeted wellness programs. Early identification allows employers to provide appropriate interventions and support, potentially reducing future healthcare costs.Predictive Modeling: Leveraging historical data and trends, data analytics vendors can build predictive models to estimate future healthcare costs and utilization. This helps employers plan and budget more effectively for their benefit programs.Pharmacy Benefit Management: Data analytics can help employers understand prescription drug usage patterns and identify opportunities for cost-saving measures, such as promoting the use of generic medications or negotiating better contracts with pharmacy benefit managers.Performance Measurement: Data analytics vendors can track the effectiveness of wellness programs, disease management initiatives, and other interventions. Employers can use this information to assess the program's impact on employee health and make necessary adjustments.Compliance and Fraud Detection: Data analytics can be used to monitor healthcare claims for compliance with regulations and identify potential instances of fraud or abuse, safeguarding the integrity of the benefit program.Personalized Health Recommendations: By analyzing individual health data (while maintaining privacy), data analytics can provide personalized health recommendations to employees, encouraging healthier lifestyle choices and preventive care. Integrating a PBM data analytics platform solution, as part of a medical and pharmacy benefit program, should be so easy that a ninth grader could do it after a 20-minute demo. PBM data analytics platform solutions can significantly enhance an employer's ability to understand, manage, and improve the health outcomes of their workforce while optimizing the overall cost of healthcare benefits. However, it's important to measure ROI and that appropriate data privacy and security measures are in place to protect employees' sensitive health information.

How Self-Funded Employers Can Use Point Solutions to Manage Pharmaceutical Costs and other notes from around the interweb: How Self-Funded Employers Can Use Point Solutions to Manage Pharmaceutical Costs. Point solutions are specialized tools or platforms designed to address specific issues or challenges faced by organizations. In the context of pharmaceutical cost management, point solutions provide targeted assistance in identifying cost-saving opportunities, improving medication adherence, streamlining prescription processes, and enhancing overall health outcomes. Before delving into the benefits of point solutions, it is essential for self-funded employers to gain a comprehensive understanding of their pharmaceutical costs. This entails assessing the utilization patterns, identifying high-cost drugs, analyzing prescription data, and exploring trends in pharmacy benefit claims. By closely examining these factors, employers can identify areas of potential savings and develop tailored strategies to optimize their pharmacy benefit plans. Become an Expert in Managing Pharmacy Benefits Employers are suing their health plan for claims data in increasing numbers. Lawsuits from large companies and employers are increasingly being filed against third-party health plan administrators to access complete employee medical claims data. Through lawsuits recently filed against Aetna, Elevance Health and BCBS Massachusetts, employers claim payers have breached their fiduciary duties by not allowing complete access to claims data and how claims are processed. In a June 30 complaint, Kraft Heinz alleged Aetna has used its role as its TPA "to enrich itself to Kraft Heinz's detriment" through undisclosed fees and processing medical and dental claims without human review. In December, bricklayer and metal worker unions filed a lawsuit against Elevance Health, alleging the payer does not allow self-insured plans to access their own claims data and charges the plans higher rates than it had negotiated with hospitals. A labor union in Massachusetts sued BCBS Massachusetts in April over similar allegations. These lawsuits are largely being driven by the Consolidated Appropriations Act and the hospital price transparency rule that took effect in 2021, according to a July 6 Bloomberg Law report. Playbook for Employers – Addressing PBM Misalignment. The guide, released by the National Alliance of Healthcare Purchaser Coalitions, identifies several key strategic recommendations that employers can adopt when looking to better navigate their relationship with PBMs. For one, the playbook recommends that employers find advisers that are genuinely putting in the work for them. Advisers should be independent and transparent, according to the guidebook, and contracts should be designed to ensure that PBMs act in the employer's best interest. "As we uncover these increasingly apparent anomalies, I think we’ve got to challenge ourselves to do better and most importantly require that our advisers, our middlemen and our intermediaries do better on our behalf," Mike Thompson, CEO of the alliance, told Fierce Healthcare. STAT News investigation takes deep dive into PBM broker conflicts of interest. Employers across the country — from big names like Boeing and UPS to local school systems — pay consulting firms to handle a straightforward task with their prescription drug coverage: Get the best deals possible, and make sure the…

The Federal Trade Commission votes to issue a cautionary statement against reliance on prior advocacy statements and studies related to pharmacy benefit managers (PBMs) due to several compelling reasons: Learn from SMEs, click now Outdated Information: The advocacy letters and studies in question were published or issued between 2004 and 2014. With the rapidly evolving healthcare landscape and significant changes in the PBM industry since then, these materials no longer accurately represent the current market realities and practices of PBMs.Evolving PBM Industry: The PBM industry has undergone substantial transformations over the years, including changes in regulations, business models, and market dynamics. The Commission recognizes that relying on outdated materials could lead to misguided decisions and policies that do not align with the current state of the industry.Ongoing FTC Study: The Commission is actively engaged in an ongoing study of the PBM industry to update its understanding of the sector and its practices. This study is essential for gaining a comprehensive and up-to-date perspective on the challenges and opportunities within the industry. As such, relying on old advocacy statements and studies may hinder the progress of this critical investigation.Opposition to Transparency and Disclosure Requirements: The cautionary statement highlights that PBMs have been using older FTC advocacy materials to oppose mandatory transparency and disclosure requirements. This indicates a potential bias towards preserving a lack of transparency in their operations, which could adversely impact consumers and other stakeholders.Ensuring Accurate Decision-Making: The Commission's primary role is to promote competition, protect consumers, and make informed policy decisions. By issuing this cautionary statement, the FTC aims to encourage stakeholders to base their decisions and arguments on the most current and reliable data available to ensure fair and effective regulation within the PBM industry.Fairness and Consumer Protection: The cautionary statement is part of the Commission's commitment to fair competition and consumer protection. Relying on outdated materials may result in policies that do not adequately address present challenges or adequately safeguard consumers' interests. By providing these reasons, the Federal Trade Commission seeks to promote a more informed and accurate discussion surrounding PBMs, ensuring that decisions are based on the latest data and understanding of the industry's dynamics.

FTC Reverses Course on Previous Endorsement of Pharmacy Benefit Intermediaries and other notes from around the interweb: FTC Reverses Course on Previous Endorsement of Pharmacy Benefit Intermediaries. The FTC on Thursday plans to walk back years of advocacy in support of the entities that manage prescription drug coverage—support that analysts say has helped fuel the growth and market integration the agency is now investigating. The agenda for the Democratic-controlled Federal Trade Commission’s open meeting includes voting on a statement that would withdraw prior advocacy statements against state legislation aimed at boosting transparency, as well as studies related to pharmacy benefit managers that the FTC said, “no longer reflect current market realities.” The agency declined to provide specifics on the statement ahead of the meeting but said the vote is a direct response “to PBMs’ continued reliance on older FTC advocacy materials that opposed mandatory PBM transparency and disclosure requirements.” A former top FTC policy official and other antitrust analysts said this includes several statements the FTC issued primarily in the early 2000s against state legislation that would have required PBMs to disclose certain information about their business practices and finances to state governments. The entities manage drug coverage on behalf of health plans and others. Become an Expert in Managing Pharmacy Benefits Employers are suing their health plan for claims data in increasing numbers. Lawsuits from large companies and employers are increasingly being filed against third-party health plan administrators to access complete employee medical claims data. Through lawsuits recently filed against Aetna, Elevance Health and BCBS Massachusetts, employers claim payers have breached their fiduciary duties by not allowing complete access to claims data and how claims are processed. In a June 30 complaint, Kraft Heinz alleged Aetna has used its role as its TPA "to enrich itself to Kraft Heinz's detriment" through undisclosed fees and processing medical and dental claims without human review. In December, bricklayer and metal worker unions filed a lawsuit against Elevance Health, alleging the payer does not allow self-insured plans to access their own claims data and charges the plans higher rates than it had negotiated with hospitals. A labor union in Massachusetts sued BCBS Massachusetts in April over similar allegations. These lawsuits are largely being driven by the Consolidated Appropriations Act and the hospital price transparency rule that took effect in 2021, according to a July 6 Bloomberg Law report. Playbook for Employers – Addressing PBM Misalignment. The guide, released by the National Alliance of Healthcare Purchaser Coalitions, identifies several key strategic recommendations that employers can adopt when looking to better navigate their relationship with PBMs. For one, the playbook recommends that employers find advisers that are genuinely putting in the work for them. Advisers should be independent and transparent, according to the guidebook, and contracts should be designed to ensure that PBMs act in the employer's best interest. "As we uncover these increasingly apparent anomalies, I think we’ve got to challenge ourselves to do better and most importantly require that our advisers, our middlemen…

The evolving relationship between self-funded employers and their third-party administrators within the US healthcare system is underlined by the Consolidated Appropriations Act of 2021. This act provides employers with enhanced access to claims data. Highlighted within this context are two significant lawsuits. Kraft Heinz and two unions have taken legal action against health insurance providers. A CAA-Compliant Checklist will help self-funded companies avoid similar actions. Central to these lawsuits are allegations that the providers have not fully adhered to the law's requirements. It is mandated that employers must have unrestricted access to their de-identified claims data. Accusations levelled at the providers suggest they have supplied selective and edited claims data. Consequently, employers find it challenging to assess the integrity of payment associated with the management of their plans' funds. Additional allegations against Aetna include wrongful retention of millions in undisclosed fees, payment of millions of dollars in provider claims that should not have been paid, and misconduct related to claims processing. These actions have been to the detriment of Kraft Heinz. CAA-Compliant Checklist for HR Leadership Teams Click to learn more about Pharmacy Benefit Institute of America These lawsuits could potentially mark the beginning of a wave of similar legal actions. Stakeholders in the healthcare industry and employers who do not undertake proper reviews of their health plans could face significant implications. Advice to employers includes conducting an in-depth review of their advisors. This includes consultants, brokers, third-party administrators, and pharmacy benefit managers (PBMs). The aim is to understand if there are any conflicts of interest. It is suggested that employers establish fiduciary committees to review contracts and the spending of health plans. Employers are warned of the risk of being sued by their own employees if they fail to meet their fiduciary responsibilities. In summary, this discussion raises serious concerns about transparency and fiduciary duties in the management of healthcare plans. It also highlights potential legal repercussions for employers and third-party administrators.

Understanding PBM Key Performance Indicators (KPIs) is crucial for HR and finance leaders. KPIs provide measurable and actionable insights into PBM performance, progress, and success. Furthermore, KPIs serve as quantifiable metrics that help assess the effectiveness and efficiency of PBM pricing and clinical programs. Mastering pharmacy benefit management (PBM) KPIs is crucial for the following reasons: Performance Evaluation: KPIs provide a standardized and objective way to evaluate PBM performance at member, departmental, or organizational levels. By setting clear KPIs, HR and their consultants can monitor progress, identify strengths and weaknesses, and make data-driven decisions to improve performance. Goal Setting and Alignment: KPIs play a crucial role in establishing SMART goals—specific, measurable, achievable, relevant, and time-bound. By offering a clear sense of direction, KPIs effectively channel efforts towards desired outcomes. When HR fully understands the KPIs, they can concentrate their actions and allocate resources to the areas of utmost importance, thereby facilitating the accomplishment of strategic objectives. Decision Making: KPIs provide valuable insights that assist in making informed decisions. By tracking relevant KPIs, employee benefit brokers, consultants, and self-funded organizations gain visibility into what is working and what needs improvement. KPIs enable data-driven decision-making, helping to prioritize initiatives, allocate resources effectively, and adjust when required. Continuous Performance Monitoring: KPIs serve as monitoring tools that allow individuals and organizations to track progress over time. Regularly reviewing KPIs helps identify trends, patterns, and areas of concern. By analyzing KPI data, organizations can identify bottlenecks, inefficiencies, or underperforming areas and take proactive measures to address them, leading to continuous improvement. Continuous performance monitoring is best done with software automation that doesn't rely on PBM self-reporting. Click to Learn More about PBM KPI Automation Accountability and Transparency: KPIs promote accountability by clearly defining expectations and responsibilities. When KPIs are well-defined and understood, PBM and HR teams know what is expected of them. This fosters a sense of ownership and responsibility, leading to improved performance. Furthermore, transparently sharing KPI data within an organization promotes a culture of transparency, enhances communication, and enables collaboration. Benchmarking and Performance Comparison: KPIs facilitate benchmarking by allowing organizations to compare their performance against industry standards, competitors, or their own historical data. Benchmarking helps identify areas where an organization is lagging or excelling, providing insights for improvement or potential areas of competitive advantage. Communication and Stakeholder Management: KPIs provide a common language for communicating performance to stakeholders, whether they are employees, management, investors, or customers. Clear and well-defined PBM KPIs help stakeholders understand the progress, achievements, and challenges faced by an organization, fostering trust, and facilitating effective communication. To ensure a successful relationship with their Pharmacy Benefit Manager (PBM), the self-insured organization and their advisors must possess a comprehensive understanding of their objectives and the competitive landscape. Additionally, they should be capable of compelling the PBM to provide pertinent information about essential services. Evaluating PBM transparency is best accomplished by a trained individual who possesses intimate knowledge of the buyer's desired benefits and disclosure objectives. Pharmacy Benefit Managers will offer openness and…