health decisions webinar: july 2013 auditing pbm oversight
DESCRIPTION
For more information, please visit: http://www.healthdecisions.comTRANSCRIPT
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April 2013
Auditing / PBM Oversight
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confidential and proprietary
PBM Auditing
• What is it?– Retrospective review of claims– Validates compliance with “contract” and benefit plan– Tool for identifying future changes
• What it isn’t– Substitute for effective management of pharmacy benefit– Get Rich Quick Scheme– Vehicle for enacting vengeance on PBM
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confidential and proprietary
Auditing – Why do it?
• Fiduciary Responsibility to stakeholders• Provides external impartial view of PBM performance• Pharmacy costs continue to increase
– Utilization continues to increase• Most highly utilized employee benefit• Most visible benefit
– Strategic pharmacy benefit management is critical • significant generic launches• costly specialty pipeline• contract mergers and other factors
– Contributes to a reduction in overall healthcare costs
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confidential and proprietary
Auditing – When should it be done?
• Anytime – contracts typically establish limits• Periodically to meet Fiduciary Requirements• Known issues that aren’t being resolved• Suspect areas of contract non-compliance• Before or after changes in benefit design
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confidential and proprietary
Auditing - What areas can be reviewed?
• Any and all areas allowed by contract– Pricing (Discounts, Fees, Credits)– Benefit Design• Copays• Step Therapies• Quantity Limits• Product Inclusions / Exclusions• Fraud Waste & Abuse
– Contract Guarantees– Rebates
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confidential and proprietary
Types of Issues Commonly Identified
• Disputes on definition of Contract wording and terms• Wrong adjudication rates• Incorrect Copays• QLL’s not established or tracked improperly• Calculation of Guarantees (financial and performance)• Incorrectly calculated rebates
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confidential and proprietary
Recovery of Disputed Amounts
• Some issues are straight forward – easy to collect– Benefit design findings– Some pricing findings– Most rebate amounts
• Issues based on Contract interpretations are difficult– Used to improve future contracts– May require legal action
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confidential and proprietary
Examples of Audit Findings
1. Guarantee Calculation, Admin Fees ($280K)2. Formulary Compliance, Copay, days supply,
Min/Max ($630K)3. Rebates ($20K +)4. Pricing Guarantees ($374K)5. Manufacturer Rebates ($865K)6. Benefit Design (copay, excluded products,
accumulators, pricing, formulary) ($500K)
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confidential and proprietary
Auditing – should YOU do it?
ABSOLUTELY