Navigating the complex healthcare landscape can be a daunting task, especially with the soaring costs of prescription drugs. Central to the healthcare system and pivotal in addressing these challenges are Pharmacy Benefit Managers (PBMs). When a PBM works in tandem with TPAs and plan sponsors, the partnership ensures patients receive the best pharmaceutical care at the lowest cost.
What is a Pharmacy Benefit Manager?
PBMs wear many hats but predominantly act as intermediaries overseeing the distribution and discounts of outpatient pharmacy care to patients. They serve a plethora of stakeholders – from health insurers and employers to government programs like Medicare and Medicaid. PBMs are a go-between for self-funded healthcare plans, the TPAs that administer them, and drug manufacturers, wholesalers, and retail pharmacies. Their core functions include:
- Ensuring Appropriate Medication: PBM pharmacists review prescriptions to ensure patients get the most suitable medications, considering factors like appropriate dosing, over and under-utilization of medication, etc.
- Claims and Formulary Management: PBMs handle prescription drug claim adjudication and develop clinically based formulary drug lists – a comprehensive list of covered medications.
- Cost Savings: PBMs have the clout to negotiate reduced drug prices with manufacturers and pharmacies. They help prevent drug waste by ensuring patients receive only the medications they need, and they provide patients with tools and resources to manage their medications effectively.
How do PBMs integrate with third-party administrators?
At first glance, the roles of PBMs and TPAs might seem separate, but their collaboration creates a holistic approach to healthcare. While PBMs are laser-focused on prescription drug costs, TPAs take on a broader role, managing the holistic health benefits of an employer’s plan. By integrating their services, PBMs and TPAs provide a more comprehensive approach to managing prescription drug benefits. TPAs can leverage the expertise of PBMs to help their clients manage costs and optimize pharmacy benefits, while PBMs benefit from the administrative support and data analysis capabilities of TPAs.
Together, PBMs and TPAs can formulate strategies that ensure beneficiaries get optimized prescription drug benefits without breaking the bank. It’s like having a dedicated team where one member brings in-depth knowledge of medications, and the other ensures seamless administration of health plans. As a TPA, HealthComp partners with a panel of PBMs, providing their self-funded partners with flexibility and established integration and connections based on each client’s needs and financial goals.
Why should you integrate your PBM and TPA relationships?
An integrated TPA-PBM model allows for streamlined management of prescription drug benefits. By integrating services, employers and health plans can benefit from a more efficient administration process, providing a greater ability to manage the prescription drug benefit. This model reduces administrative burden and minimizes the risk of errors or delays.
By working together, PBMs and TPAs can identify cost-saving opportunities and implement strategies to improve patient outcomes. Participants can benefit from comprehensive and integrated clinical management programs, including programs to improve medication adherence, manage chronic conditions, and promote wellness. With both entities working in tandem, they can pinpoint cost-saving opportunities that benefit everyone – from the plan sponsor to the patient.
This integration isn’t just a buzzword. It’s a game-changer for the healthcare industry.
What is the advantage of unbundling PBM and medical with a TPA?
One of the salient features of a TPA lies in its unique value proposition: the capability to offer PBMs in conjunction with carrier networks that otherwise remain inaccessible. This unbundling of PBM and Medical services presents an avenue that isn’t typically available when a group approaches an ASO Carrier directly. For instance, consider a population in a state where the Aetna network has a strong presence. This population could greatly benefit from a Specialty Rx carve-out program, something not offered by Aetna’s CVS. However, with the intervention of a TPA, this population can access the specific advantages of such a program, illustrating the powerful potential of TPA and PBM collaborations.
What to consider when working with a PBM?
In the same way that a broker and consultant relationship with a TPA is important, having a broker and TPA involved in the PBM selection process is vital for ensuring the employer receives the best solution for their needs, at the best price. PBM contracts can be complicated, and it is important to ensure they reflect the needs and customizations requested. A solid TPA will have experienced experts on staff who function as a liaison between the PBM, broker, and employer. “TPA’s, like HealthComp, that focus on removing costs from the healthcare system are dedicated to finding like-minded PBM partners. Here at HealthComp, we have the flexibility to offer multiple leading partners that innovate in the Rx space and ensure medications are accessible and affordable for our patients,” states Donna Clifford Klein, the VP of Pharmacy Strategy at HealthComp.
When looking for a PBM that best fits the organization’s goals and objectives, here are a few things every organization should consider:
- Pricing Modalities: PBMs offer various pricing structures, whether transparent or traditional pricing. Understand what suits your needs.
- Navigating Contracts: PBM contracts can be intricate. Ensure your TPA has access to experts who understand the finer details.
- Rebates and Discounts: Always dig deeper to understand what guarantees are being offered and what avenues to take to get the strongest financial offer. Ensuring your TPA has access to experienced PBM associates who can decode the rebate and discount value.
The PBM world is vast, with 66 companies vying for a slice of the market. However, three majors – Express Scripts, CVS Caremark, and OptumRx – reign supreme because they command around 89% of the market. Together, they serve a staggering 270 million Americans. Given the relentless rise in prescription drug costs and reliance on outpatient medications, the PBM and TPA have an essential role to play in the integration of health benefits.
Seamlessly integrating a prescription drug plan into health benefits is key to improving usage, managing costs, increasing member satisfaction, and promoting better health outcomes. This integration gives brokers and employers a universal view of their plans, with population data that can help direct and shape the plan for years to come. PBMs growing collaboration with TPAs promises a future where healthcare is not just about treatment but optimized outcomes and cost-effectiveness. As stakeholders in this vast system, we must understand, appreciate, and leverage these collaborations for a brighter healthcare future.