Transcript HIRSP Authority

NASCHIP Meeting
October 15, 2008
Building a Positive PBM Vendor
Relationship
Introduction of
Presenters
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Amie Goldman, CEO
Health Insurance Risk-Sharing Plan Authority
[email protected]
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Vernita Bridges-McMurtrey,Executive Director
Missouri Health Insurance Pool
[email protected]
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Alan Kellogg R.Ph.
HealthLinX, L.L.C.
[email protected]
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Ken Anderson, President
IPC, Inc.
[email protected]
Why Embark on a PBM
Procurement
Background
 Pharmacy Benefit Management included
in Plan Administrator contract.
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PBM was a subcontractor to TPA
Why Embark on a PBM
Procurement
Consequence
 PBM contract not competitively bid
Fees are small portion of total TPA cost
 PBM cost is more than admin fee (e.g.
rebates and drug pricing)
 Quickly evolving market
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Questions about accountability
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Who is the Customer?
Why Embark on a PBM
Procurement
Goals of Procurement
 Direct partner offering best value
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Continued high levels of customer services
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Competitive Administrative Fee
Lowest Net Cost for Drugs (pricing and rebates) w/guarantees
Clinical Programs Focused on Cost and Quality
Aggressive performance standards with financial penalties
Continued Transparency and 100% Pass-Through
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100% manufacturer revenues returned to HIRSP
No spread on retail, mail or specialty pricing
Only margin is on admin fee
Favorable audit requirements
Why Embark on a
PBM Procurement
Solutions to Drug Benefit Management
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Benefit changes and Innovations
Value Based Benefit Designs
Integration of Pharmacy, Medical and Lab Data
Quantifying the Return on Investment in Value Based
Claims
Special Pharmacy Plan Designs
Implementation Strategies
Strategies to Increase Medication Compliance
Technology Solutions
The Procurement Process - RFP
 RFP Types
– Pass through vs. traditional pricing
– Per script vs. PMPM Administrative Fees
– Yes/No/Deviation vs. Question/Response
 Selection of Potential Bidders
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Limit if possible
Allows focus on grading and time spent with bidders
Evaluate marketing philosophy and statements
Survey of Health Pools and Local Market Leaders
www.health-linx.com
The Procurement Process - RFP
 Requirements of Bidders
– Determine Goals for the Plan
– Current Services/Claim Volume
– Mix of Customer Service/Price/Clinical Programs
Wanted
 RFP Production
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Bidder Notification/Intent to Respond
Electronic RFP
Electronic Data File-Actual Claims, HIPAA Compliant
Pricing Documents
www.health-linx.com
The Procurement Process - RFP
 RFP Areas
– General Information (Plan
Info)
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Timeline
Instructions to Bidder
Proposal Requirements
Ethics Requirements
Bidder History
Claim Administration
Mail Service
Reporting
Account Services
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Audit/Fraud and Abuse
Communications
Clinical Services
Network Management
Price/Performance Guarantees
Professional/Ethical/Legal
Specialty
Pricing
Contract
Therapeutic Comparison
www.health-linx.com
The Procurement Process – Contracting
– Value of incorporating the contract into the
process
– Verify elements of pricing, service and clinical
– Attach the RFP
– Performance Guarantees
– True-up and Settlements
– Auditing rights for claims and rebates
– Termination language on pricing, rebates, run-outs
www.health-linx.com
The Procurement Process – Pitfalls
– Simplification of a complicated program
– Embark on an RFP using a public RFP
– Selection based upon pricing only
– Selection based upon clinical services only
– Proper selection, poor contracting
– Rapid changes in the marketplace
• Specialty Drug/Specialty Drug Rebates
• New pricing schemes and interpretation by bidders
• Changes in benchmark pricing
www.health-linx.com
Building and Managing a
Positive PBM Vendor
Relationship
NASCHIP Conference
October 15, 2008
IPC Presentation on Managing and Auditing
Prescription Benefit Administrators
1061 Peruque Crossing Court  O’Fallon, Missouri 63366  (636) 614-1344
Fax (636) 639-8021  E-Mail: [email protected]  Website: www.ipc-inc.com
Managing the Vendor Relationship
 Vendor Implementation and System Testing
• Start as Early as Possible
• Clearly Define Implementation Plan
o Eligibility Data
o Benefit Design
• Copays and Deductibles
• Clinical Edits and Incentives
• Special Handling and COB
o Historical Claim Data
• Clinical Edits
• Open to Fill Mail Order Prescriptions
o Communications
o Billing and Payment
• Establish System Testing Processes and Review
• Customer Service – Pre and Post Implementation
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Managing the PBM Vendor Relationship
 Contract Compliance
• Periodically Validate
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Pricing
Benefit Setup
Incentives
Performance Guarantees
 Customer Service
• Training and Scripting
• Retraining and Re-scripting
• Customer Service Call Reports and Call Monitoring
 Administrative Services and Systems
• Eligibility Maintenance, Card Production and Welcome Kits
• Claim Billing and Payment
• Grievance and Appeals
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Managing the Vendor Relationship
 Account Management
• Day to Day Service with Questions and Escalated
Complaints
• Objective Reporting and Recommendations
 Clinical Services – High Risk Pool Population
• Balancing Appropriate Care with Barriers to Service
 Managing Escalated Complaints
 Diagnosing Vendor Mismanagement
• Awareness of Root Causes Leading to Ongoing Issues
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Managing the PBM Vendor
Relationship – Auditing
Post-Implementation Audit
• Contract Pricing Terms
• Benefit Design
• Key Services
o Clinical Programs
o Operational
o Administrative
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Managing the PBM Vendor
Relationship – Auditing
 Claim Audit
• 100% Claim Audit
• Annually
o Claim Pricing – MAC, Discount, Drug Coding
o Benefit Design – Copayments, Coverage Limitations
 Contract Audit
• Quarterly
o Performance Standards
• Annually
o True-up Arrangements
• Rebate
• Pass-through Pricing
o Performance Guarantees
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Managing the PBM Vendor
Relationship – Auditing
Integrity Audit – Fraud Waste and
Abuse (FWA)
• Provider
• PBM
• Member
Clinical Program Audit
Auditing for Vendor Success
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What Now?
 Assess your current prescription drug administrative arrangement
 What is your trend rate?
• Year over year
• Compared to industry or NASCHIP averages
 How is your services?
• Member access to care
• Responsiveness to your issues
 How old is your current agreement?
• Every Three years pricing improves
• New Management requirement evolve
 If your are not comfortable with your answers to these questions, you
may want to explore benefits of competitively bidding, or updating your
administrative arrangement
 Define goals
 Assessing resources
 Board Presentation and Buy-in
NASCHIP Conference 2008
Questions
NASCHIP Conference 2008