Medicare, Part D plans must scrutinize pharmacy benefit manager practices, relationships


Insurers in Medicare Advantage and Part D should evaluate their practices and relationships with pharmacy benefit managers (PBM) to ensure better quality and member experience, Healthcare Payer News reported.

PBM services could prove problematic for insurers as they face more competition, stronger regulatory emphasis on quality ratings and greater severity of patient needs, according to healthcare consultant John Gorman, former managed care assistant director at the U.S. Department of Health and Human Services.

PBMs, such as Express Scripts and Walgreens, are largely responsible for formulary administration and transition benefits, and play a role in coverage determinations, grievances and appeals--all categories where Centers for Medicare & Medicaid Services audits found many violations, Healthcare Payer News noted.

CMS found the most frequent violations involved unapproved quantity limits, unapproved utilization management and improper use of prior authorizations or exceptions, among others. What's more, these issues drive quality and member experience problems that could send beneficiaries packing and hurt Medicare plans' bottom lines, the article noted.

"That these are listed as the most frequent violations among Medicare Advantage and Part D plans ought to send a shiver up the spine of every chief compliance officer, chief medical officer, chief quality improvement officer and every chairman of the board and CEO in this industry," Gorman said.

Insurers need to focus on pharmacy coverage as they adjust exchange plan offerings to attract consumers during round two of open enrollment, given that more than half of Americans take at least one prescription a year and prescriptions account more than 10 percent of medical spending. However, insurers should note that increased opportunity to leverage pharmacy benefits could disrupt the relationship between employers and PBMs, FierceHealthPayer previously reported.

Despite issues in Medicare managed care, PBMs CVS Caremark and Express Scripts claim they could save Alabama up to $50 million by managing its Medicaid prescription drug benefit.

For more:
- read the Healthcare Payer News article

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