Milliman consultant Brian Anderson will copresent at the AIS Health Virtual Conference, “Proven pharmacy benefit strategies for a rapidly changing marketplace,” on September 16. His presentation, “Exclusions and other emerging formulary management strategies,” examines tactics employed within the prescription drug marketplace and provides perspective on strategies that can be effective under particular circumstances. Anderson will be presenting alongside Joshua Freddell, senior director of Enterprise Product Innovation at CVS Health.
The conference will focus on pharmaceutical drug spending and highlight steps the nation’s leading pharmacy benefit managers are taking to control it. For more information on the virtual conference, click here.
Employers looking to manage the cost of their healthcare plans should think about the value of conducting a claims audit. In this Employee Benefits News article (subscription required), Milliman consultants Brian Anderson and David Cusick consider how routine audits can detect flaws in a plan’s design, leading to better claims handling procedures and reductions in plan costs.
Here is an excerpt:
If feasible, it is a good idea to have claims audited every one or two years. At least as important, however, is the implementation audit. An implementation audit takes place shortly after a plan has been set up. A good time frame is 90 days after beginning work with a new vendor or any substantially new contract. Implementation audits are akin to taking off the training wheels. They help ensure that a plan has been set up correctly and that the plan sponsor is getting all of the benefits it contracted for during the implementation process. They happen after enough time has passed to gain a body of experience data but still soon enough to head off a major course change requiring extensive retroactive corrections.
Expect an audit to take three to six months. After that the recovery effort begins, in twofold fashion: recovering any money that the plan may have overpaid, and the equally important work of correcting errors in the system that were identified in the audit. Plan sponsors may engage an overpayment recovery vendor, or choose to handle it in-house.
The benefits of proactive auditing for the plan sponsor should be evident: to verify the integrity of vendor contracts and to meet fiduciary responsibilities. As with anything, there is no guarantee an audit will pay for itself every time. But it is not unusual for an audit to have findings about 3% to 5% of paid claims costs, with recoveries of about 1% to 2%. Today, for many reasons, claims audits are more effective than ever. They can be relied on to uncover something in the working of a plan that can be improved, isolated issues as well as systemic and redundant errors, contractual compliance questions, or basic data entry problems.
While almost all pharmacy benefit manager (PBM) contracts include audit provisions, many plan sponsors underestimate the value of auditing their PBMs, which can help recover funds lost through overpayments or system errors. Recovered losses mean that a typical pharmacy benefit audit claim can more than pay for itself, but at the very least ensures plan sponsors that they are meeting fiduciary responsibilities in the area of managing their PBM contracts. Milliman’s Brian Anderson offers more perspective in this article.
Reproduced with permission from Benefits Magazine, Volume 51 Number 5, May 2014, pages 22-27, published by the International Foundation of Employee Benefit Plans (www.ifebp.org), Brookfield, Wisconsin. All rights reserved.
A new healthcare reform briefing paper by Brian Anderson and Troy Filipek looks at the reform provisions affecting Medicare Part D. The paper is available here.
A new healthcare reform briefing paper by Brian Anderson and Troy Filipek looks at the reform provisions relevant to pharmacy benefits and their implications for patients, physicians, pharmacy benefit managers (PBMs), pharmaceutical manufacturers, and other interested parties. The paper is available here.
We have blogged before about possible increased transparency facing pharmacy benefit managers (PBMs), and about how changes in pharmaceutical average wholesale price will affect PBM contracts. Now a new article by Brian Anderson and Bob Cosway in Health Watch looks at some of the intricacies of effective PBM contracting from a plan sponsor’s perspective. What should employers and others that pay for healthcare look for in these contracts? What’s the best way to keep up with new drugs coming onto the market? How should pricing be set and kept current?