PHAR 746 Pharmacy Management

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PHAR 746Pharmacy Management

• Stacy Ramirez, Pharm.D.
• Clinical Assistant Professor
• Department of Pharmacy Practice

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Third Party

• Discuss the history of insurance
• Understand the role of third party payers in
  pharmacy
• Examine third party contracting
• Identify the role of PBMs

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10.50
20
2.00
1,000,000
12.21
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Third Party History

• 1929
• Private Group Health Insurance
• Teachers in Dallas, TX
• 1932
• Blue Cross/Blue Shield
• Non-profit
• Group health plans

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Third Party-History

• 1939-1945
• Wartime wage freezes
• Increase in group plans from employers
• 1954
• Disability benefits included in Social Security
• 1950s
• Growth of Private Health Insurance

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Third Party-History

• 1965
• Medicare/Medicaid
• Implemented in 1966
• 1980s and 1990s
• Growth of managed care, HMOs
• 2006
• Medicare Part D

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Third Party-History

• Euphemisms
• Consumer-driven
• We pay most of the cost
• Consumer Choice
• Only if you can afford it
• Consumer Responsibility
• Youre on your own
• Defined Contribution
• Employers pay what they want

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Third Party

• Third party prescriptions account for up to 97
  of all prescriptions filled
• Up significantly with Medicare Part D
• Cash patients account for the balance

Cash
Third Party
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Third Party

• Public
• Medicare
• Medicaid
• Private
• Insurance companies
• Drug Manufacturers

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Third Party-Public

• Medicare
• Part D
• Available to older Americans
• Also disabled after 24 months

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Third Party-Public

• Medicare
• Challenges include
• Rocky start-up
• Confusing enrollment
• Conversion from cash patients
• Slow payment

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Third Party-Public

• Medicaid
• State and Federally funded
• Assistance for low income people
• Better than average reimbursement rates

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Third Party-Public

• Challenges
• Complex processes
• Formulary process
• Inadequate access??

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Third Party-Private

• Insurance Companies
• Traditional Indemnity
• HMO
• Capitation
• Pharmacy Networks

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Third Party-Private

• Challenges
• Falling reimbursement rates
• Complex processes
• Negotiating power

Reimbursement Rates
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Third Party-Private

• Drug Manufacturers
• Patient Assistance Programs
• 200 below poverty level
• Varying other requirements
• All have some type of program

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Third Party-Contracting

• Price
• AWP
• MAC
• AMP
• Dispensing fee

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Third Party-Contracting

• Volume
• Covered lives
• of scripts filled
• Growth potential
• Marketing support

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Third Party-Contracting

• Network
• Exclusivity
• Member choice

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Third Party-Contracting

• Incentives
• Exclusivity
• Generic goals
• Market share
• Professional services

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Third Party-PBM

• Pharmacy Benefit Manager
• Caremark
• Medimpact
• Prescription Solutions
• Administer drug benefit programs
• Employers
• Insurance carriers

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Third Party-PBM

• PBM Stats
• 95 of rxs processed through PBM
• 70 of 3 billion rxs paid through PBM
• 19 of scripts filled at mail-order owned by PBM
• Manage benefits for 65 of seniors

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Third Party-PBM

• PBM contract with
• Insurance companies
• Managed care organizations
• Self-insured employers
• Unions
• Medicaid and Medicare managed care plans
• Government entities

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Third Party-PBM

• Functions of PBMs include
• Claims processing
• Formulary management
• Drug utilization review
• Educations
• MTM
• Specialty drugs

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Third Party-PBM

• Formulary Management
• Relative clinical Value
• Net cost
• Market share
• Discounts or rebates
• Possible patent expiration