As healthcare costs continue to rise, it's essential for employers to stay up to date on the wide range of cost containment solutions available in the health risk management space. One of the key drivers of healthcare costs is prescription spending, which represents more than a quarter of total benefits costs for many employers.
Cost containment is an integral component of the Medical Stop Loss group captives that we support. With that in mind, we invited Nick Williams from True RX to join our monthly Health Risk Webinar Series to discuss how Pharmacy Benefits Managers (PBM) can help employers curb the rising costs of medication. In this blog post, we’ll highlight eight PBM cost containment strategies that Williams covered during the webinar, along with his valuable insights into the benefits of implementing these solutions for group captive members and other employers.
A PBM can help group captive members control the “uncontrollable” cost of medications by initiating a wide array of cost-containment solutions. With the cost of medications drastically increasing, PBM partners are becoming increasingly valuable as they can “speak pharmacy” for their clients, giving those companies more time to focus on running their daily operations.
There are many effective cost-containment solutions a PBM partner can help employers implement. Some of the customizable solutions that Williams discussed in the webinar include:
Let’s break down each of these solutions:
Patients are often prescribed new or more expensive versions of the medication they need. Using the Step Therapy approach, PBM partners work to get patients the same type of medication at a lower cost. This can be done by finding the same medication through a different brand or using a medication that has been on the market longer. The lower-cost medication yields the same results as the higher-cost medication, making step therapy a win-win solution for both the patient and employer.
Formulary Guard is a solution used by PBM partners to keep unnecessary high-cost combination medications off the pharmacy benefit plan.
During the webinar, Williams mentioned a specific case where Formulary Guard was able to lower the cost of medication from $1,899.06 to $76.62 just by separating two medications that had been combined.
The No Spread Pricing solution means the PBM will follow a pass-through pricing model vs. a spread pricing model. This means the client will only be charged what the PBM pays the pharmacy as a claim.
A PBM partner can help employers maximize rebates; however, rebate management is ever-changing. It’s extremely important to regularly talk to your PBM about your rebates to understand how they are being handled.
Some important questions employers should ask include:
Copay Assistance is a behind-the-scenes program that utilizes copay cards provided by the medication manufacturer to maximize savings. If a specialty medication were to appear on an employer’s plan, a dedicated case manager would intercept the claim and pull the necessary information from the manufacturer to reduce the cost for the patient and employer.
If an employee needs a rare medication, a dedicated case manager would apply for Manufacturer Assistance on behalf of the patient. This requires some heavy lifting for the PBM, however, if the request is approved, specialty costs are typically reduced by up to 80% for the employer and the patient pays $0 for the medication.
The J-code Solution identifies more cost-effective sources for specialty infusions without compromising patient care. According to a recent analysis cited by Williams, each patient enrolled in the J-code Solutions program will save an average of $109,000.
Clinical Programs match patients with the correct medication the first time.
When implemented correctly, PBM cost containment strategies can yield significant savings for employer groups. If you have additional questions about PBM strategies or are interested in learning more about joining a Medical Stop Loss group captive, please contact our team.
This presentation was part of Captive Resources’ Medical Stop Loss Webinar Series — regular installments of webinars to educate medical stop loss group captive members. The thoughts and opinions expressed in these webinars are those of the presenters and do not necessarily reflect Captive Resources’ positions on any of the above topics.