Is your plan prepared for the potential high cost of prescription drugs your employees may require for their health?
Understanding the healthcare system’s complexities, particularly with the rising costs of prescription medications, can seem overwhelming. Pharmacy Benefit Managers (PBMs) play a crucial role in addressing these challenges.
Collaboration between PBMs, Third-Party Administrators (TPAs), and plan sponsors ensures patients have access to affordable, top-notch pharmaceutical care. By working together, this partnership strives to provide optimal healthcare solutions while keeping costs down.
What is a Pharmacy Benefit Manager (PBM)?
Have you ever wondered what exactly a PBM does?
These intermediaries are jacks of all trades, responsible for overseeing the distribution of outpatient pharmacy care to patients and ensuring discounts are applied where possible. From health insurers and employers to government programs like Medicare and Medicaid, PBMs are a vital go-between for a range of stakeholders.
They act as a conduit between self-funded healthcare plans, the TPAs who administer them, and drug manufacturers, wholesalers, and retail pharmacies.
PBMs have three primary functions:
- Ensuring Appropriate Medication: PBM pharmacists review prescriptions to ensure patients get the right treatments, considering factors like appropriate dosing, medication over- and underutilization, and more.
- Claims and Formulary Management: PBMs handle prescription drug claim adjudication and create clinically based formulary drug lists – comprehensive lists of the medications that are covered.
- Cost Savings: PBMs have immense bargaining power with drug manufacturers and pharmacies and therefore can negotiate reduced drug prices. By preventing drug waste and ensuring patients receive only the medication they need, PBMs can help people manage their medication effectively.
How do Pharmacy Benefit Managers (PBMs) integrate with Third-Party Administrators?
At first glance, the roles of PBMs and TPAs might appear distinct, but their collaboration creates a unified and holistic approach to healthcare.
While PBMs prioritize the management of prescription drug costs, TPAs take on a broader responsibility of managing the overall health benefits in an employer’s plan. By integrating their services, PBMs and TPAs provide a more comprehensive approach to handling prescription drug benefits.
TPAs can harness the expertise of PBMs to help their clients effectively manage costs and optimize pharmacy benefits, while PBMs benefit from TPAs’ administrative support and data analysis capabilities.
Together, PBMs and TPAs help create powerful strategies that ensure beneficiaries receive optimized prescription drug benefits without straining their finances. It’s like having a dedicated team where one member brings a profound knowledge of medications while the other ensures the seamless administration of health plans.
As a TPA, Personify Health partners with a select group of PBMs, providing our self-funded partners with flexibility and established integration and connections tailored to each client’s unique needs and financial goals.
Why should you integrate your Pharmacy Benefits Manager (PBM) and Third-Party Administrator (TPA) relationships?
Wondering why integrating your PBM and TPA relationships matters so much?
Bringing together TPAs and PBMs creates a streamlined process for managing prescription drug benefits effectively.
This integration empowers employers and health plans to navigate a more efficient administration system, enhancing their ability to handle prescription drug benefits with precision. By adopting this model, the administrative load is lightened, reducing the chances of errors or delays.
When PBMs and TPAs collaborate, they uncover opportunities to cut costs and craft strategies that elevate patient outcomes. Engaging in this partnership allows participants to access holistic clinical management programs aimed at enhancing medication adherence, managing chronic conditions, and promoting overall wellness.
With these entities working hand in hand, they can spot chances to save costs that benefit all involved – from the plan sponsor to the patient.
This integration goes beyond just a trendy term; it stands as a true game-changer in the healthcare industry.
What are the advantages of unbundling a Pharmacy Benefits Manager (PBM) and medical services with a Third-Party Administrator (TPA)?
One of the remarkable features of a TPA is its unique capability to offer PBMs alongside carrier networks that would otherwise be out of reach.
By unbundling PBM and medical services, TPAs open up possibilities that aren’t typically available when a group approaches an Administrative Services Organization Carrier directly.
Let’s create a scenario as an example: Imagine a population living in a state where the Aetna network dominates. This population could greatly benefit from a Specialty Rx carve-out program, something that Aetna’s CVS does not provide. However, with the intervention of a TPA, this population can tap into the specific advantages of such a program.
This example vividly demonstrates the immense potential of collaboration between TPAs and PBMs.
The advantage of this unbundling approach is the ability to leverage the unique strengths of both TPAs and PBMs, creating opportunities that might not otherwise exist. Through this collaboration, TPAs have the power to connect their clients with specialized programs and services that cater to their specific needs.
This level of customization and access to tailored benefits sets TPAs apart and empowers organizations to optimize their healthcare offerings.
By providing these unbundled services, TPAs help unlock novel solutions and possibilities, enabling your health plan and members to access comprehensive healthcare options that align with their specific requirements.
What to consider when working with a Pharmacy Benefits Manager (PBM)?
Considering working with a Pharmacy Benefits Manager (PBM)?
Here are some crucial things to keep in mind.
Partnering with a PBM means engaging in an intricate and comprehensive process. Thus, it is imperative to make informed decisions that ensure you receive the best solutions that cater to your needs while also being at a reasonable price point.
To achieve this, it is crucial to have a close relationship with a broker and TPA who will be involved in the PBM selection process, ensuring all your requests for customizations and needs are met. Entering into PBM contracts can be daunting, but it helps to have a TPA with experienced experts who can serve as liaisons between the employer, broker, and PBM.
“At Personify Health, we understand the importance of finding like-minded PBM partners focused on reducing costs from the healthcare system. We pride ourselves on having the flexibility to offer multiple leading partners that continually innovate in the Rx space,” shared Personify Health SVP of Pharmacy Partnership Donna Clifford Klein. “We’re dedicated to providing accessible and affordable medications to our patients.”
When considering PBM partnerships, it’s important to understand what will work best for your company to ensure that you’re getting the most out of the process.
Here are key considerations to keep in mind:
- Pricing Structures: PBMs provide a range of pricing models, from transparent to traditional. Work with your broker and TPA to assess which model best meets your organization’s needs.
- Understanding Contracts: PBM contracts can be complex. Your TPA should provide you access to experts who can navigate the intricate details and ensure alignment with your requirements.
- Exploring Rebates and Discounts: Delve deeper to comprehend the guarantees and opportunities for securing the most favorable financial offering. Your TPA should have knowledgeable PBM associates capable of interpreting the value of rebates and discounts and communicating them to you.
Focusing on these fundamental aspects can help you make a well-informed decision when seeking a PBM partner. This approach ensures that the chosen PBM is not only aligned with your organization’s goals but also provides the most value, ultimately leading to a more effective and tailored healthcare solution.
The landscape of PBMs is expansive, with 66 companies competing for a share of the market. Nevertheless, the dominance of three major players—Express Scripts, CVS Caremark, and OptumRx—is undeniable. They collectively serve 270 million Americans and command around 89% of the market.
The influence of these major PBMs is far-reaching. Their influence underscores a critical need for strategic and informed decision-making when navigating the PBM market.
By recognizing their pivotal role, organizations can proactively shape a more efficient and patient-centric approach to healthcare benefits, ultimately leading to a more empowered and informed landscape for all stakeholders involved.
Through insightful guidance and a well-informed approach to the integration of health benefits, organizations can pave the way for a more transparent, efficient, and patient-focused healthcare system.
Incorporating a prescription drug plan into health benefits enhances utilization, cost management, and member satisfaction and fosters improved health results.
This unified approach provides brokers and employers with a comprehensive overview of their plans, utilizing population data to guide and mold long-term strategies.
By effectively aligning the prescription drug plan with health benefits, we create a pathway towards enhanced utilization, improved financial management, and ultimately a more satisfied membership base with better health outcomes.
This collaboration between PBMs and TPAs paves the way for a future where healthcare isn’t solely about treatment but about maximizing outcomes and ensuring cost-effectiveness for all involved. As key players in this intricate system, our ability to understand, acknowledge, and harness these partnerships is essential in driving healthcare toward a brighter and more prosperous future.