multiple locations conferencegood years benefit carriers, and bad years can result in double-digit...

Multiple Locations Conference Hashim Zaibak, PharmD

Owner and OperatorHayat Pharmacies

Take 5Long-acting Injectable Administration

Learning Objective

• Discuss four peer-tested ideas that lead to business efficiencies and better patient care.

Disclosure

Hashim Zaibak, PharmD declares no conflicts of interest or financial interest in any product or service mentioned in this program, including grants, employment, gifts, stock holdings, and honoraria.

4 MONTHS!!!

Recent changes in Wisconsin law allow pharmacists to administernon-vaccine injections

Injectable Antipsychotic Administration

Carmen, PMHNP, was looking for an independent pharmacy

Other pharmacists did not want to inject

Hayat Pharmacists trained on injection techniques

Questions?

Hashim Zaibak, PharmDHayat Pharmacies

[email protected]

Multiple Locations Conference Pame McHugh, RPh

Co-OwnerMcHugh Pharmacy Group

Take 5“Dummy” Books

Disclosure

Pame McHugh, RPh declares no conflicts of interest or financial interest in any product or service mentioned in this program, including grants, employment, gifts, stock holdings, and honoraria.

Table of contents

• Return to Stock

• Ordering Cheat Sheet

• Failed Invoice from Wholesaler

• Set Holiday Hours for Phone

• Medicare Prescription Drug Coverage and Your Rights

• Recall Item Return

• Birthday Calls

• Dispill Notes

• Daily Register Report

• POS Weekly Report

• Negative Onhand

• Expired Returns

• ABC Order/C2

• Refill Reminder Report (Previously Matt Report)

• Vendor Contact Info (varies by store)

• PMP Submission and lookup

Questions?

Pam McHughMcHugh Pharmacy

[email protected]

Multiple Locations Conference Chad Alvarez, PharmD, MBA

Senior Director, Retail PharmacyCarilion Clinic

Take 5Truck Stop Pharmacy

Disclosure

Chad Alvarez, PharmD, MBA declares no conflicts of interest or financial interest in any product or service mentioned in this program, including grants, employment, gifts, stock holdings, and honoraria.

Carilion Clinic

• Large IDN, Southwest Virginia

• Operate 5 Retail Pharmacies

• Hospitals

• Stand Alone

• Physician Practice

• LTC/Specialty

• October 1- purchased pharmacy in Truck Stop

Carilion Clinic Pharmacy-Raphine

• Largest Truck Stop on the East Coast

• Parks between 800-1,000 trucks per day

Carilion Clinic Pharmacy-Raphine

Services• Immunizations/POC• MTM• Diabetic Shoes

Future- combine Pharmacy with Urgent Care

Questions?

Chad Alvarez, PharmDCarilion Clinic

[email protected]

Multiple Locations Conference David Cippel, RPh President/Owner

Klingensmith’s Drug Store

Take 5Delivery System Operations

Disclosure

David Cippel, RPh declares no conflicts of interest or financial interest in any product or service mentioned in this program, including grants, employment, gifts, stock holdings, and honoraria.

The Challenges of Delivery for Rural Community Pharmacy

• Klingensmith's Drug Store is an 8 store independent chain located in Western Pennsylvania

• Overview of Klingensmith’s Delivery Services:

• Standard Delivery: • Mon-Wed-Fri

• Personal Care Homes/Pain Program/Emergency Deliveries:

• Monday thru Friday

Overview of Delivery Workflow

• Edit Master text styles• Second level

• Third level• Fourth level

• Fifth level

Deliveries Reconciled next morning at Central office

Drivers return to central warehouse drop off vehicle-,bag of receipts placed in secure drop box

All stores receive email 1:30PM with attached deliver list

Deliveries sorted and drivers depart 1:15PM

Drivers arrive 12:45PM to pickup deliveries at store

Route finalized based on number of stops

Route assigned to driver

Exported from store to Delivery Software and sorted by address

Tech/Clerk Enters Delivery Patient into an Access Database at the Pharmacy (Cutoff 11:00am)

Overview of Delivery Workflow

Questions?David Cippel, RPh

Klingensmith’s Drug [email protected]

Multiple Locations Conference Sean Doyle, Principal–Strategic Planning &

Management Consultant FitzmartinScott Brunner, CAE, NCPA Senior VP Communications & External Affairs,

Project BrightSpot: How NCPA is Looking to Help You Leverage Your

Competitive Advantage(s)

Disclosures

Scott Brunner declares no conflicts of interest or financial interest in any product or service mentioned in this program, including grants, employment, gifts, stock holdings, and honoraria.

Sean Doyle is the Principal-Strategic Planning & Management Consultant with Fitzmartin. The conflict of interest has been resolved by peer review of the slide content.

Learning objectives

1. Discuss the impact of the Amazon/PillPack merger on pharmacies and lessons learned from other industries.

2. Identify opportunities for community pharmacies to compete, leveraging community pharmacies’ existing competency/value in adherence packaging and same-day, in-person delivery.

D I S R U P T I O N

the Live Independent Initiative

TM FitzMartin Inc. 2019

D I S R U P T I O N


datacenterknowlege.com

1. Tech and data platform


2. Logistics

Amazon Prime

Whole Foods


2. Logistics

3. Cash: “No profit. No worries.”

$41.2B

Amazon

Online Entertainment

Online Shopping

Airlines

Auto Insurance

Hotels

Grocery / Supermarkets

Shipping Services

Banking

Life Insurance

Pharmacies

Travel Websites

Health Insurance

61

47

45

44

43

40

40

38

35

30

28

23

13


2. Logistics


4. Brand and customer experience


2. Logistics


4. Brand and customer experience

5. People, a testing ground

Represents 1 of every 151

employed Americans

What makes Pharmacy vulnerable:

1. Lack of standardization

2. Little focus on consumer experience

3. Incredibly fragmented market

4. Middlemen are value extractors

w/ large profit margins

5. Companies focus on formatting

or coordinating information

6. Model relies on opaque pricing

Retailer

HealthWarehouse.com

Costco

Independents

Sam’s Club

Walmart

Kmart

Grocery Stores

Walgreens

Rite Aid

CVS/Target

Pioglitazone (Actos)

$12

$16

$19

$20

$132

$160

$113

$167

$255

$270

A price difference of 22.5x

for the same drug

Source: CBInsights, Consumer Reports

Benefits, Claims, Insurance:

Amazon as a platform for health benefits management, claims

management and billing.

Amazon as a platform for employers or small health plans.

Amazon offering self-insured employers a common product in

conjunction with benefits managers: stop-loss insurance.

Amazon and Medicare/Medicaid management

ALEXA and HOME CARE

Whole Foods medical clinics

EMR: data is a perfect fit, AWS is known for security

Healthcare supply chain management

Device delivery and monitoring

Amazon as a/or buys a PBM

Genomics Investment: GRAIL

PillPack

The State of Business

“...if these independent pharmacies don’t do

something to continue to communicate their

unique value, then over time their value

proposition will erode and people will

continue to turn to their alternatives.”

Mark Kaiser -

Founding Partner

Phase2 Health

Double

Our Members’

Net Income

Define Our

Own Future

10,000,000

Lives

Saved


Fact: We are capable of

competing.

Fact: We haven’t been telling

our story.

Are we going to participate

in the conversation?

“Does Your Pharmacy Do That?”

Live Independent

50 Stories, 50 States


Pharmacist vs Pharmacy

My pharmacist saved my life

2

A man with a cold walks into the pharmacy

And his life is changed

with one look


My pharmacist saved my life

3

Getting Mom to take her medicine changed her life


I had no idea how close I was to dyingI never expected it would be my

pharmacist who would save my life



Awareness Contemplating Buying

Find a pharmacist web page




Member Tools: Creating ROI

Member access to a local marketing

communications tool kit. Equipping you to win at

home and be part of the national media effort.

Online member access to a working forum.

Show enhanced member value, and recruit

more members to join us in our initiative.

Ads and media for you to use locally.

POP and Instore signage templates.

PR support: content ideas, templates.

Online use cases and best practices, webinars

and remote help.


Awareness Contemplating Buyin

g

Yes. Yes we

do ...and so

much more!

Live Independent–

50 States, 50 Stories:

Inspire with passionate, compelling stories that remind

us why we became pharmacists in the first place.

Demonstrate the advantages we offer over Amazon/big-box

competitors.

Show how we change lives, strengthen families, change

communities.

Publicly declare we will save 10,000,000 lives in three years.

Prove the difference.

Equip the you to close net new and profitable customers.

Launch a national consumer campaign that will include:

National and local PR, Broadcast and digital media

Consumer-facing website driving traffic to local members

D I S R U P T I O N


Self-Insured Health Plans: Opportunities to Both Save and Make You Money

Multiple Locations Conference John Crumly, Mark Haegele, Brian Beach

Risk Alternatives for your Self-Insured Health Plan and

Collaborative Care Case Studies

Multiple Locations Conference John Crumly, CEO, PPOK

Mark Haegele, Vice President, Lockton Companies

Learning objectives

1. Develop questions to ask your current broker about your health coverage.

2. Assess whether a self-funded health plan is right for your business.

3. Illustrate opportunities to sell pharmacy services to other self-insured plans.

Disclosures

John Crumly, PharmD, is the CEO and Executive Director of MaxCareRx. The conflict of interest was resolved by peer review of the slide content.

Mark Haegele is the Vice President of Lockton Companies. The conflict of interest was resolved by peer review of the slide content.

Risk alternatives for your health plan

• Evolution of self funding

• Self funded alternatives• 100% Risk Retention

• Specific Only

• Traditional – Specific and Aggregate Deductible

• Aggregate Only/Level Funded

• Captives

• State by state implications


• Evolution of self funding• Market Trends

• Risk/Reward

• Advantages• Insurance cost savings

• Transparency

• Access to data

• Administrative cost savings


Why?

Take CONTROL of your employee benefits and create a STRATEGY:

• Make your plan an asset

• Build up a reserve

• Renew based upon your claims, not others’

• Design your own plan

• Reward wellness

• Select your own network structure

• Reinsurance protection

• ERISA Qualified

Potential Savings:

• CLAIMS• Plan Design

• Wellness

• HRA

• Network

• STOP LOSS PREMIUM• Specific

• Aggregate

• Less Taxes Paid

• ADMINISTRATION• Claims Paying

• Customized Services

Macro self-funding vs. fully insured comparison (pros/cons)

Self-Funding Fully Insured

Total Costs❖ Governed by federal regs (ERISA) and not subject to state premium tax (1.75–2.50%).❖ Subject to ACA taxes—PCORI and reinsurance fee❖ Avoid ACA insurer tax (-2.46%).❖ Avoid carrier padding and risk charges (-2 to -5%).

Total Costs❖ Subject to state taxes and state-mandated benefits.❖ Subject to ACA taxes—PCORI, reinsurance, and insurer tax.❖ Carrier padding and risk charges hidden in many pockets.

Volatility❖ Aggregate (all claims) and specific (shock claims) stop-loss insurance limits ultimate

exposure.❖ Good claim years benefit company, and bad years are capped.❖ Can adjust budget to higher predictability/confidence level.

Volatility❖ Locked in for 12 months.❖ Good years benefit carriers, and bad years can result in double-digit increases.

Transparency❖ Full transparency (encounter data).❖ Ability to change any element of plan.

Transparency❖ Good data access (premium vs. claims, high-level utilization).❖ Carriers determine plan elements.

Reality❖ Generally saves money over three-year period.❖ Costs are all about claims—claim costs are discounts and utilization.❖ General benchmark—85% of companies with $7M+ in spend are self-funded.

Reality❖ Carriers drive profitability through renewals for second year and beyond.❖ Premiums typically increase regardless of great claims history.

S E L F - F U N D I N G

Components of premium

Component Description% of PremiumFully Insured

% of PremiumSelf-Funded

Claims❖ Costs from a healthcare provider or facility for services provided (represents

the largest component of premium)60% 70%

Reserves

❖ Funds set aside to cover liability for claims incurred but not yet reported (IBNR)

❖ Estimate of 1.5 to 2 months of expected paid claims

❖ Fully insured will charge for reserve administration and risk

15% 12%

Pooling Charge/ Stop Loss

❖ A provision that limits the dollar amount a plan will have to pay for any individual claimant to a predetermined level during the policy year

8-10% 8-10%

Administration❖ Includes claims and eligibility administration, network, risk charges, profits,

broker compensation8-10% 6%-8%

Taxes ❖ State and ACA taxes 5-6.5% 1-1.5%

Margin ❖ Fund established to protect a plan against unexpected claims fluctuations 5-9% 2-5%


Fully Insured Self-Funded

Administration

Claims

Administration

Stop-Loss Premium

Claims

Corridor for High Claims (25%)

Specific/Aggregate

Fixed Costs for the Employer

Maximum Liability for the Employer

Fixed Liability for the Employer

Total Savings 3% - 5%

Fully insured vs. self-funded


Plan is responsible for run-out claims when self-funded plan is terminated.

Plan will only pay ~20% of a normal month’s worth of claims due to lag.

It takes 1-2 months for claims to be submitted and paid.

100% should be budgeted and 80% “RESERVED” on plan sponsor’s books for plan termination.

Second Month Third Month Going ForwardFirst Month

Plan will only pay ~50%.

Plan will only pay ~80%.

By the fourth month, plan should have ~1.5 months of reserves on the books.

IBNR reserves must be adjusted regularly.

Establishing IBNR reserves


What is Stillwater Collaborative Care?

• Provides opportunities to improve the physical and financial health of community businesses and members.

• Allows us to partner with local communities to make healthcare affordable and stabilize healthcare cost.

• Plan designed to keep the healthcare dollars local.

Why Stillwater Collaborative Care?

Member EmployerProvider

Why choose Stillwater Collaborative Care?

The cost of everything we buy.

The cost of health insurance.

325%

How we solved our health care cost crisis.

• Provider owned Population Health.

• Lower contracted rates for local employers.

• Lower Fixed Cost for local employers.

• 100% of Rx Rebates back to local employers.

• Future increases tied to Medicare.

• Transparency.

• Multiple financing alternatives.

Cost Saving Results

Features

Single

Family

Coinsurance

Primary OV

Specialist OV

Urgent Care

Rx Generic

Rx Preferred Brand

Specialty

SCC Plan

$1,500

$3,000

20%

$10

$25

$50

$5

$30

$250

Current Plan

$2,000

$6,000

20%

$25

$50

$150

$10

$85

$250

Annual employer premium savings was 18% or $24,000!

Benefit to employees

• Concierge customer services covers: Member Health, Claim/Plan Questions, Issue resolution.

• Better benefits.

• Lower out of pocket

Concierge

• Provides personalized care.

• Point of contact for questions related to the plan, tier levels, or billing.

• Can also assist with establishing members with a primary care provider or a specialist as needed.

Results - clients

• Twelve employers have signed up.

• 3,020 members on the program.

• The clients’ industry varies: Churches, manufacturing, healthcare providers, cities, and local businesses.

• Employers save 15-40% on spend.

Results - health

• All members welcomed to the program via SCC’s onboarding call.

• 212 participants received on-site health screenings.

• 55 participants identified as tobacco users.• Several are now participating in the smoking cessation program.

• Established primary care relationships with multiple members.

• Assisted members with applying for and receiving financial assistance

• Assisted members to resolve claim issues.

Results - claims

Timeframe 1/1/18-12/31/18

Claims processed: 29,211

Member balance bill liability: $0. Eleven claims negotiated.

Claims paid as Tier I benefits: 98%.

Results - financial

• SCC has saved the community over $4 Million.

• Clients specifically saved $1.25M by joining the program.

• SMC’s Employee health plan is on track to saved over $2M for 2018 and reduce claims.

PPOk insurance experience

• Initially, part of a Professional Employer Organization for 13 years. MaxCare subsidiary was the PBM.

• PEO dissolved had to move to fully insured.• Only thing transparent were the premium increases.

• 2016 returned to self insured w/ 90 employees.• Transparent pass through model w/ MaxCare.

• Enjoy benefits of Pharma Copay assistance dollars and rebates.

• Recently added Reference Based Pricing for Hospital.

• Some pain in year 1, but now have access to direct contracts and concierge partner that minimizes the noise.

MaxCare growth challenges to solutions

• Small sales force –• Too many RFP’s where we were not the “preferred” PBM.

• “Good, Uneducated or Bad” Brokers.

• Our Solution – Start a Brokerage. • Now we have an alternative for bad brokers.

• Important to find like minded partners (e.g.)• PBM Consultants

• Brokers

• Third Party Administrators (TPA)

Brokerage – general agent

• New alternative to fully insured for Oklahoma pharmacists• Oklahoma State Medical Association (OSMA)

• Pharmacists, staff and families can join MEWA

• Competitive pricing, transparent PBM, no mail order.

• Intangible – physicians and pharmacists communicating as organizations.

• Working on Opioid solution together

• Challenge – Cannot cross state lines.

Local solution to vertical integration

• Clear Benefits and partners• Provide alternative insurance solutions for our pharmacies and

businesses in local community.

• Self insure

• Join an existing captive insurance company• Protected cell – each company is underwritten on its own merit for first tier

risk.

• Focus on transparency and keeping business local

• Opportunity for pharmacists to show value with local hospital via collaborative care model. CPESN Opportunity for transition in care?

• Should more independent pharmacy groups form their own captive?

Changing the future:Combining Self Funding, Direct

Contracts and Reference Based Pricing

Reference Based Pricing

Multiple Locations Conference Brian Beach, PharmDCo-Owner and CFO

Kelley-Ross Pharmacy Group

Disclosure

Brian Beach declares no conflicts of interest or financial interest in any product or service mentioned in this program, including grants, employment, gifts, stock holdings, and honoraria.

A Different way to pay for

Health care1 What is reference based pricing (RBP)?

2 RBP Solution

Status quo: the problem

The Problem

No regulations on what hospitals can

bill for services

What if there was a way to

reduce the cost of healthcare

starting at the source of the problem?

1

Today, for-profit hospitals charge

>700% of Medicare and non-profit

hospitals charge >550% of Medicare2

With a traditional PPO “discount”

of 50%, employers still pay 300%

of Medicare3


100

HOSPITAL PRICE

Acetaminophen (Tylenol)

RETAIL PRICE

Bacitracin(Neosporin equivalent)

Diabetes Test Strip

Gauze Pads

$1.50 each

$108.00 each

$18.00 each

$77.00 a box of 50

$.015 each

$1.49 (bottle of 100)

$4.11 each

$12.33 (pack of 3)

$1.85 each

$27.00 (box of 50)

$0.098 each

$4.90 (box of 50)

Status quo: the problemTotal Hip Replacement

101

HOSPITAL 1 HOSPITAL 2

Discounts can be deceiving

* One of the top 5% largest national PPO networks in the country |

PPO Network Discount 32% 45%

Billed Charges $54,704 $230,117

Total Plan Payment $37,466 $125,414


PAYMENTS

PPO provider payments

are usually based on

pre-negotiated rates

102

How Traditional PPO Provider Payment Works

DISCOUNT

Rates are often determined by

applying a PPO discount to the

billed charge from the provider

PROCEDURE

Virtually every provider has a

different billed charge for the

same procedure

COSTS

Result: unpredictable and

illogical claim costs

What is referenced based pricing?

103

Provider reimbursements based on a point of reference (most commonly Medicare)

RBP was historically only used for facilities and surgical centers but now includes physicians

Common Network Structure

Hospitals / Facilities

Reference based pricing

Physicians*

Physician-only network or RBP

+

How RBP worksSTEP 1

STEP 2

STEP 3

STEP 4

STEP 5

RBP Vendor assumes fiduciary status and updates Plan document

to include smart and rational levels of reimbursement

Member receives treatment normally at hospital/facility

Hospital/facility sends bill to Third Party Administrator (TPA)

TPA sends bill to RBP Vendor who audits bill and reprices bill in

line with Plan document, and returns to TPA

RBP Vendor manages additional provider communication should

a balance bill arise

105

Balance bill process

Members Responsibility RBP Vendor Responsibility

Members must open their mail and be on the lookout for:

1. Provider Bill

2. Explanation of Benefits (EOB)

If the Provider Bill does not match the Member Responsibility on the EOB, the Member must call TPA immediately

Send RBP vendor a copy of the Provider Bill

Correspond with Provider to eliminate balance bill

If Provider appeals, RBP vendor will respond to appeal

RBP vendor will protect Member on all disputed claims with communication and / or additional negotiations

Breakdown of RBP claims

4% are appealed. RBP vendor will defend and / or further negotiation

15% are balanced billed. Majority are resolved with an attorney letter, appeal response or additional negotiation of the bill by the RBP vendor

81% of the RBP repriced claims are accepted

Total Numberof Claims

Total ClaimsDollars

Hospital / FacilityClaim Breakdown

Physician

claims

10%

90%

60%

40%

81%

15%

4%

Hospital / Facility claims (sent to RBP vendor for repricing)

Physicians

Hospital /

Facility

Breakdown of RBP claims

107

To date, there has not been a single lost case awarding the facility additional / full billed amount of the claim

Total Claim Breakdown

Physician

Claims 10%90%

Hospital / Facility

Claims

Hospital / Facility Claim Breakdown Example

Based on 1,000 EE Life Group, 18,000 claims processed / year

1,458 Repriced RBP claims accepted

328Resolved with a phone call or letter and / or negotiation by the RBP vendor

14Remain appealed and RBP Vendor will continue further communication and/or additional negotiations

1,800 10% of claims are Hospital / Facility RBP

Discount comparison: PPO network vs. RPB

Average % Discount for Top 3 Procedure Codes

108

U361 – Operating Room Service – Minor

U490 – Ambulatory Surgical Care – SPU

360 – Operating Room Services –General Class

PPO NET WORK 1

50.52%

63.52%

49.70%

PPO NET WORK 2

45.51%

56.62%

44.65%

RBP

72.93%

78.70%

73.27%

Grand Total 53.71% 48.02% 73.86%

Client #1

RBP savings examples

M E D I C A L CO S T S( C L A I MS + F E E S )

S TO P - LOS SP R E M I U M

R B P S AV I N G S( C L A I MS + S TO P

LO S S )

# of Lives PPO RBP % Savings PPO RBP % Savings $ %

Client #2

Client #3

173

83

88

$3,439,032

$661,076

$855,618

$2,826,102

$488,915

$578,779

18%

26%

32%

$424,135

$235,606

$283,939

$392,833

$191,372

$236,028

7%

19%

17%

$644,232

$216,396

$324,750

17%

24%

24%

Keys to success

Continuous member

education

Member notification

via text and phone

when RBP claim has

been received

Superior customer

support who

exclusively work with

Reference Based

Pricing plan

members

Plan language that

supports the process

Recap – Why consider reference based pricing?

PROVEN COST-SAVER

for employers and members

ACCESS TO ANY

HOSPITAL / FACILITY

in the country

FULLY TRANSPARENT

method to pay claims

111

• Reduce claims spend by 15-50%

• Maintain or lower out-of-pocket costs for members

• More predictable claim costs

• Access to providers at any hospital

• Based on the fair market value of the services rendered

• Member outreach when RBP claim is received to limit member disruption

Kelley-Ross: A Case Study

Multiple Locations Conference Brian Beach, PharmDCo-Owner and CFO


Kelley-Ross case study

• Part 1: • Experience with Healthcare coverage for employees

• Part 2: • Getting paid to provide care beyond rx dispensing

Kelley-Ross case study – part 1

• In 2017, 4 physical locations, 70 employees (~100 lives)

• Union employees under CBA• Multi-employer health plan

• Cadillac plan

• Fixed cost per employee with no visibility on true cost/benefit

• Same premium regardless of dependent count

• Mandatory participation

• 100% employer funded


• Late 2017• Employees file to vote to decertify Bargaining Unit

• Implications:• Changed relationship with employees

• Retirement benefit (removal of pension)

• Healthcare coverage

• First steps• Fully insured discovery

• Limited options for our size for similar coverage

Option 1:HMO plan, no vision/dental coverage included and

significant impact to employees

Option 2:PPO plan, no vision/dental

and changes to OOP

Option 3:PPO Plan, no vision/dental and significant increases

to employee OOP


• Chance connection led to introduction into Partially/Fully Self Funded (PSF/SF) concept:

• Transparency

• Base administration fees

• Pass through rebates on rx

• Customize plan to business/employee needs

• Ability to mitigate risk through stop loss carrier


• Decision• Move ahead with partially self-funded plan

• By EOY had 36 employees with 81 total lives covered under the plan

• No historical experience to base costs

• Premiums at 25-60% of the previous plan

• KR pharmacies as extended day network pharmacy

• No significant change to network provider access by members


• Outcomes at end of Year 1• Clarity on expenses

• Fixed Admin Fees

• Semi-monthly check runs for claims

• Overall plan costs flat • Includes unexpected high cost emergency claim, higher than anticipated

dental plan utilization, and higher rx costs


Medical/Rx Experience (CAS)

Total Cost Summary

2018 Plan Year

Enrollment Fixed Costs

Total TotalMaximum

Claims

Expected

Claims

Paid

Medical

PBM Paid

Rx

Suppressed

Paid Rx

SSL

Violations

Actual Net

Claims

Maximum

Costs

Expected

Costs

Actual

Costs

at

Maximum

at

Expected

Mar-18 38 15,606 28,004 22,403 - 9,360 2,350 - 11,711 44,176 38,575 27,316 16,860 11,259

Apr-18 37 15,333 27,622 22,098 8,795 823 6,095 - 15,713 43,506 37,982 31,046 12,461 6,936

May-18 37 15,299 27,535 22,028 31,553 163 9,731 - 41,447 43,385 37,878 56,746 (13,361) (18,868)

Jun-18 38 15,572 27,917 22,333 17,991 137 2,168 - 20,296 44,055 38,471 36,203 7,852 2,268

Jul-18 37 15,152 27,156 21,725 11,818 219 5,108 - 17,145 42,860 37,428 33,110 9,749 4,318

Aug-18 36 14,766 26,483 21,186 13,388 1,037 9,255 - 23,680 41,786 36,489 38,446 3,340 (1,957)

Sep-18 37 15,334 27,625 22,100 21,517 42 1,423 - 22,982 43,510 37,985 38,633 4,877 (648)

Oct-18 37 15,334 27,625 22,100 11,667 379 5,041 - 17,087 43,510 37,985 32,670 10,840 5,315

Nov-18 37 15,334 27,625 22,100 17,387 558 4,521 - 22,466 43,510 37,985 38,340 5,170 (355)

Dec-18 36 14,766 26,483 21,186 32,805 1,502 3,542 - 37,849 41,786 36,489 53,555 (11,769) (17,066)

SSL Violations - - - -

ASL Violations - - - -

Totals (Net of

Violations)370 152,495 274,076 219,261 166,921 14,220 49,234 - 230,376 432,084 377,269 386,066 46,018 (8,797)

Medical/Rx Claims

Position to Expected 105.1%

Position to Maximum 84.1%

Fixed Costs

% of Expected 40.4%

% of Maximum 35.3%

Medical/Rx Claims Liability Total Plan Costs Gain/(Loss)

$-

$5,000

$10,000

$15,000

$20,000

$25,000

$30,000

$35,000

$40,000

$45,000

Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Dec-18

Expected Claims Actual Net Claims Total

Brown & Brown of Washington, Confidential, 1/29/2019, KR(Medical&Dental Experience)2018 - Done, ForPresentation 2018 Plan Year


• Renewal at year 2• No major plan changes

• Premiums steady and slight admin fee increases (2%)

• Total expected plan expenses below year 1 and maximum expenses at single digit increase over year 1


• Future state• Reference based pricing (RBP) model

• Deep data dive into actual payments to providers

• No “networks”

• Plan payments agreed at time of service

• “Cash in hand” to providers instead of weeks of delays for approval of claims

• Experience with other employer groups show significant discounts off of billed charges


• Pharmacist as provider• WA law already allows billing insurance for services within scope of

practice that are already being paid to other providers

• KR pharmacists currently billing medical insurance plans since mid-2017

• Early conversations about how to integrate pharmacists into both PSF/SF plans and also RBP plans

Lessons learned

• Understand the options• Ask a lot of questions

• Evaluate impact on employees

• Allow plenty of time to decide

• Look at the costs and risks• What are historical rate increases?

• Risks?• Important to understand ways to mitigate under any plan, but especially

PSF/SF plans

Matt Lund

Employee Benefits Practice Leader and SVPBrown and Brown [email protected]

Brian Beach, PharmDCo-Owner and CFO

Kelley-Ross Pharmacy [email protected]

Mark HaegeleVice President

Lockton [email protected]

John Crumly, DPh, MHA Chief Executive Officer

[email protected]

Questions?

multiple locations conferencegood years benefit carriers, and bad years can result in double-digit...

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