Tag Archives: COVID-19

How are pharmacy benefit managers reacting to the coronavirus?

The spread of COVID-19 is having a widespread impact across industries worldwide. Leaders across the healthcare industry, including pharmacy benefit managers (PBMs), are working to develop policies and interventions to address the rapidly changing healthcare landscape. PBMs are a major influencer in the supply chain of outpatient pharmaceutical products, including financing, distributing, pricing, shipping, and setting policies that affect how prescription medications are dispensed. These entities have moved quickly to develop new policies that provide guidance and assurance to their plan sponsor clients and members amid the coronavirus outbreak.

The interventions put into place serve to mitigate the administrative strain placed on providers, ensure adequate supply and access to medications for members, and support the continuation of business amid a time of great uncertainty. Although the responses were meant to be pragmatic, a major factor that has not been addressed is whether or not these strategies will add cost for plan sponsors, increase drug trend, exhaust the supply of certain pharmaceutical products, or override the plan provisions that sponsors had intentionally built into their programs to manage cost and care.

In this article, Milliman’s Andrew Jackson, Brian Anderson, and Marc Guieb highlight actions PBMs are taking across pharmacy management, patient access, and the supply chain and the potential effects on plan sponsors and members.

How will the coronavirus pandemic impact patients’ out-of-pocket costs?

The unique structure of the U.S. healthcare system means that the out-of-pocket costs for patients requiring hospitalization due to COVID-19 can vary substantially among those with different types of health insurance. In addition, costs to those of different age groups, living in different parts of the country, experiencing different levels of severity, or facing the illness at different times of the year will also vary substantially.

Although it is too early to analyze the healthcare cost data for those who have been treated for COVID-19 in the U.S., historical data from patients who have sought medical attention for influenza or pneumonia may be informative for understanding out-of-pocket costs resulting from COVID-19 treatment. The biological and clinical characteristics of COVID-19 differ from other respiratory infections, but the signs and symptoms that necessitate hospitalization and intensive care for severe cases of the disease are also seen in severe cases of other respiratory infections.

In this report by Milliman’s Stoddard Davenport, healthcare claims data from three large national research databases is used to investigate the variation in out-of-pocket costs for patients who historically experienced acute inpatient hospitalizations involving treatment of acute respiratory infections (pneumonia and influenza). In this analysis, the focus is exclusively on cases that required hospitalization.

How will the COVID-19 pandemic affect health payer operations?

The coronavirus pandemic will have a significant and long-lasting effect on healthcare systems around the world. Health insurers, managed care organizations, and third-party administrators provide infrastructure that facilitates the flow of information and funds throughout the healthcare value chain. Payers answer benefit and coverage questions, connect patients to healthcare services, provide reimbursement for services rendered, facilitate financing, and manage relationships with purchasers.

In the current care delivery and financing paradigm, these day-to-day administrative activities are key to making the U.S. healthcare system work. However, the status quo is threatened as customers and provides experience business interruption on a massive scale due to COVID-19.

In this paper, Milliman’s Barbara Culley, Maureen Lewis, and Andrew Naugle identify five key payer functions are likely to be affected by the COVID-19 pandemic and actions payers can take to ensure business continuity while enhancing their contributions to the value chain.

Telehealth expansion aiding healthcare system during coronavirus pandemic

On a nationwide basis, we are being encouraged to limit our social interactions to slow the spread of the coronavirus, slow the rate of those who will fall ill to it, and avoid overtaxing our healthcare system over a short period of time.

What does social distancing mean for those who require healthcare during this time? Could they be helped by telehealth, which has the potential to replace some in-person services and better triage care based on needs?

Medicare has specific definitions for telehealth services—it is covered by Part B and is limited to live audio/video services furnished by specific practitioners at a distant site to a beneficiary in an originating site. Restrictions under the Medicare program regarding beneficiary location, provider type, and geography have limited the adoption of telehealth services provided to Medicare beneficiaries. The Telehealth Services During Certain Emergency Periods Act of 2020, which is part of the Coronavirus Preparedness and Response Supplemental Appropriations Act of 2020, has removed many of these restrictions.

In this article, Milliman’s Susan Philip and Susan Pantely discuss Medicare’s telehealth expansion during the coronavirus pandemic.

The final wave: The effect of the coronavirus on the MPL industry

Physicians nationwide have begun to brace for the impact of the coronavirus on the healthcare industry. While the health of the nation and world is of primary importance, the medical professional liability (MPL) industry has begun to consider the impact on providers from related MPL claims. Healthcare providers, facilities, and MPL writers can expect direct and indirect impacts from the coronavirus pandemic—with the indirect impact possibly proving more impactful over the long term.

Paradoxically, the more we as a society are able to address and slow the spread of the coronavirus, the more the MPL industry may see related claims. It might be difficult to allege malpractice against a hospital short on ventilators when thousands of other hospitals are short as well. But if the spread can be slowed to a rate at which most hospitals have the capacity to handle these cases (at least under a crisis standard of care), it may be easier to allege malpractice against those hospitals with overwhelmed emergency departments or that experience adverse results relative to others.

According to a study from Wuhan, China, which began in December 2019, 13.5% of patients hospitalized with the coronavirus developed a hospital-acquired infection.[1] The more typical rate among hospitalized patients in China is less than 5%.[2] The rate of hospital-acquired infection is typically greater among patients with respiratory conditions[3] and hospital-acquired infections are only one measure of complications from treatment. However, this information suggests one way in which facilities or providers may be subject to allegations of medical liability.

As the healthcare system reaches capacity, many providers will work outside their areas of expertise to treat affected patients. In typical circumstances, doing so would be rife for allegations of malpractice. Whether that can happen under a pandemic may depend on the interpretation of Good Samaritan laws, which vary in wording by state.[4] MPL writers should consider consulting with their legal advisers and taking steps to ensure that these laws appropriately address pandemics.

More concerning may be the impact of the coronavirus on claims after the pandemic is over. Patients are now delaying nonessential medical care as part of social distancing. Some patients will experience adverse impacts from delays in treatment whether the delay occurred from social distancing or a provider called upon to address greater medical needs. These delays can complicate future medical treatment, possibly in severe ways that the patient may not anticipate. Healthcare providers may experience MPL claims alleging failures to provide appropriate medical care to patients with less immediate need. In reviewing Good Samaritan laws, MPL writers should ensure healthcare providers are appropriately protected from such claims. A March 15, 2020, editorial in the Washington Post urged legislators to enact such a change, citing emergency physicians who may need to turn away patients in order to maintain available beds for more urgent needs.[5]

More pressing for physicians and other healthcare workers currently may be the risks to their own health. Providers are among the most at risk for contracting the coronavirus given their contacts with sick patients. Among working physicians, 20% are 65 or older[6], the age group most at risk for complications from the coronavirus (this compares to 16% among the general population[7]).

One study found the case fatality rate from the coronavirus in this age group to be about 8%[8], but this understates the prospective impact on healthcare as many survivors may have decreased respiratory capacity and may be unable to work prospectively.[9] Data on the complication rate from surviving the coronavirus is difficult to come by, in part because it can best be measured over the long term. Complication rates in this older demographic between 20% and 25% would reduce the number of working physicians by 5% by the end of the pandemic. Hence the ultimate impact of the coronavirus on the MPL industry may be not in direct claims or even the second wave of delayed-healthcare claims that follows. It may be in a healthcare industry materially compromised by the disease caused by the coronavirus and its associated complications.


[1] https://www.thelancet.com/journals/lanres/article/PIIS2213-2600(20)30079-5/fulltext

[2] https://www.ncbi.nlm.nih.gov/pubmed/28325579 and https://www.sciencedirect.com/science/article/pii/S1201971214015392

[3] https://erj.ersjournals.com/content/48/suppl_60/PA4912

[4] https://recreation-law.com/2014/05/28/good-samaritan-laws-by-state/

[5] https://www.washingtonpost.com/opinions/2020/03/15/make-this-simple-change-free-up-hospital-beds-now/

[6] Estimated from data at https://www.statista.com/statistics/415961/share-of-age-among-us-physicians/

[7] https://www.statista.com/statistics/270000/age-distribution-in-the-united-states/

[8] http://www.cidrap.umn.edu/news-perspective/2020/02/study-72000-covid-19-patients-finds-23-death-rate

[9] https://nypost.com/2020/03/13/coronavirus-survivors-may-suffer-from-reduced-lung-function/