Should PBMs be required to save insurers money?
If PBMs were required to do this, insurers could use the savings to further reduce people’s premiums and cost-sharing payments.
What role do PBMs play in how much we spend?
What role do PBMs play in how much we spend on prescription drugs? PBMs operate in the middle of the distribution chain for prescription drugs. That’s because they: develop and maintain lists, or formularies, of covered medications on behalf of health insurers, which influence which drugs individuals use and determine out-of-pocket costs
What do the new guidelines mean for Medicare Advantage Marketing materials?
The guidelines allow organizations offering both Medicare Advantage and Prescription Drug Plans the ability to reference one document when developing marketing materials.
What does a PBM prescription discount card cover?
An example of this is a PBM Prescription Discount Card covering hair growth medication, barbiturates or erectile dysfunction drugs, which are excluded from coverage under Medicare Part D.
What is one CMS marketing rule that impacts how Medicare insurance plans market to consumers?
Marketing Rules CMS also regulates marketing and plan presentations, including when you're allowed to market, and how you market. Agents must wait until October 1 to begin marketing next year's plans to potential beneficiaries and cannot enroll members until October 15.
How do PBMs generate revenue?
Altogether, PBMs generate more than $315 billion annually in revenue for themselves and their shareholders by adding their cost of doing business to the end cost of the prescription paid by insurance plans, taxpayer dollars and patient copays at the pharmacy counter. PBMs work with drug makers to develop the formulary.
Do PBMs work with Medicare?
PBMs will administer drug benefits to be offered by managed care plans participating as at-risk, full-service MA plans under Medicare Part C.
How does PBM pricing work?
PBMs increase a patient's access to medications by negotiating directly with drug manufacturers or wholesalers. PBMs negotiate discounts from Wholesale Acquisition Cost (WAC) for quantity discounts that they are able to pass on to their clients. They also negotiate payments based on adherence programs.
What is wrong with PBMs?
Because a portion of their profit is based on the rebate, PBMs rank drugs on their formularies based on the rebate amount rather than the lowest cost overall or drug efficacy. This encourages drug manufacturers to set artificially high list prices and offer steeper rebates rather than offer the lowest possible price.
How profitable are PBMs?
The report showed that the PBM gross profit increased from $25 billion to $28 billion between 2017 and 2019. It also showed that the sources of these profits changed significantly.
Who is PBM to Medicare?
Pharmacy benefit managers, or PBMs, are companies that manage prescription drug benefits on behalf of health insurers, Medicare Part D drug plans, large employers, and other payers.
What is the largest PBM?
PBMs ranked by market share: CVS Caremark is No. 1CVS Caremark: 34 percent.Express Scripts: 24 percent.OptumRx (UnitedHealth): 21 percent.Humana Pharmacy Solutions: 8 percent.Prime Therapeutics: 6 percent.MedImpact Healthcare Systems: 5 percent.All other PBMs: 3 percent.
What roles do PBMs play in healthcare financing?
PBMs are companies that administer pharmaceutical benefits for health plans, HMOs, and employers while managing drug utilization and obtaining discounts from both retail pharmacies and manufacturers.
What is PBM spread pricing?
Spread pricing is when a PBM reimburses pharmacies one price for a drug but charges the health plan another, driving up profits for PBMs. Pharmacies have complained that sometimes the reimbursement rate from PBMs is lower than the actual cost to acquire the drug.
Is GoodRx a PBM?
Unlike many of its discount card peers, GoodRx partners with multiple PBMs, including Express Scripts, OptumRx, MedImpact, and Navitus. These PBMs compete on the GoodRx platform to acquire prescriptions. If an individual PBM's cash rate was easy to find, then plan sponsors would demand that rate.
How does Express Scripts make money?
Express Scripts, which manages pharmacy benefits for roughly 100 million people, claws back millions of dollars per year from pharmacies after prescriptions go out the doors, according to a contract obtained by Axios.
What is Medicare marketing guidelines?
The Medicare Marketing Guidelines (MMG) implement the Centers for Medicare & Medicaid Services’ (CMS) marketing requirements and related provisions of the Medicare Advantage (MA, MA-PD ) (also referred to as Plan), Medicare Prescription Drug Plan (PDP) (also referred to as Part D Sponsor), and except where otherwise specified, Section 1876 cost plans (also referred to as Plan) rules, (i.e., Title 42 of the Code of Federal Regulations, Parts 422, 423, and 417). These requirements also apply to Medicare-Medicaid Plans (MMPs), except as modified or clarified in state-specific marketing guidance for each state’s demonstration. State-specific guidance is considered an addendum to the MMG. State-specific marketing guidance for MMPs will be posted to http://www.cms.gov/Medicare-
How long does it take to review marketing materials in HPMS?
Based on the material type, and as indicated by HPMS, marketing materials submitted in HPMS for prospective review will have a review timeframe of 10 or 45 days. The marketing review time period begins on the date a material is submitted in HPMS.
What is a third party marketing organization?
Third-party marketing organizations are entities such as a Field Marketing Organization (FMO), General Agent (GA), or similar type of organization that has been retained to sell or promote a Plan’s/Part D Sponsor’s Medicare products on the Plan’s/Part D Sponsor’s behalf either directly or through sales agents or a combination of both.
What is a script in Medicare?
Informational scripts are designed to respond to beneficiary questions and requests and provide objective information about a plan or the Medicare program. Sales and enrollment scripts are intended to steer a beneficiary towards a plan or limited number of plans, or to enroll a beneficiary into a plan.
What is an educational event for Medicare?
Educational events are designed to inform Medicare beneficiaries about Medicare Advantage, Prescription Drug or other Medicare programs and do not include marketing (i.e., the event sponsor does not steer, or attempt to steer, potential enrollees toward a specific plan or limited number of plans).
What is co-branding in Medicare?
Co-branding is defined as a relationship between two or more separate legal entities, one of which is an organization that sponsors a Medicare plan. Co-branding is when a Plan/Part D Sponsor displays the name(s) or brand(s) of the co-branding entity or entities on its marketing materials to signify a business arrangement. Co-branding arrangements allow a Plan/Part D Sponsor and its co-branding partner(s) to promote enrollment in the plan. Co-branding relationships are entered into independent of the contract that the Plan/Part D Sponsor has with CMS.
What is a non-benefit/non-health service provider?
Third parties that provide non-benefit/non-health services (“Non-benefit/non-health service providing third party entities”) are organizations or individuals that supply non-benefit related information to Medicare beneficiaries or a Plan’s/Part D Sponsor’s membership, which is paid for by the Plan/Part D Sponsor or the non-benefit/non-health service-providing third-party entity.
Why do PBMs need to reorient their business model?
Some experts think that PBMs also need to reorient their business model away from securing rebates and more toward improving value in pharmaceutical spending. For example, health plans and PBMs could do more to support physicians in prescribing the most cost-effective medications on their patient’s formularies.
Why do PBMs get rebates?
Because they often receive rebates that are calculated as a percentage of the manufacturer’s list price, PBMs receive a larger rebate for expensive drugs than they do for ones that may provide better value at lower cost.
How do PBMs work?
PBMs operate in the middle of the distribution chain for prescription drugs. That’s because they: 1 develop and maintain lists, or formularies, of covered medications on behalf of health insurers, which influence which drugs individuals use and determine out-of-pocket costs 2 use their purchasing power to negotiate rebates and discounts from drug manufacturers 3 contract directly with individual pharmacies to reimburse for drugs dispensed to beneficiaries. 2
What is a pharmacy benefit manager?
What are pharmacy benefit managers? Pharmacy benefit managers, or PBMs, are companies that manage prescription drug benefits on behalf of health insurers, Medicare Part D drug plans, large employers, and other payers. By negotiating with drug manufacturers and pharmacies to control drug spending, PBMs have a significant behind-the-scenes impact in ...
What is spread pricing?
A separate controversy involves a PBM practice known as “spread pricing,” whereby PBMs are reimbursed by health plans and employers a higher price for generic drugs than what the PBMs actually pay pharmacies for these drugs . The PBMs then keep the difference.
What are the reforms to regulate PBMS?
Policymakers have considered three principal reforms to regulate PBMS: Require greater transparency around rebates. Federal and state policymakers likely need more data on the rebates PBMs receive to gain a more complete understanding of pharmaceutical spending and where reforms may be needed. Ban spread pricing .
Should PBMs keep rebates?
There is a lot of debate over whether PBMs should be able to keep the rebates they receive from drug manufacturers , which generally aren’t publicly disclosed. Some believe PBMs should be compelled to “pass through” all or a larger portion of these savings to health insurers and other payers.
How much can PBM save?
Savings can range from 20% to 30%, from limited use to high/incentivized use of PBM tools consistent with best practices. At current/average use, PBM tools will save $1 trillion compared to low or limited use over the next decade. In addition to these expected savings, an additional $1 trillion could be saved if all plan sponsors adopted high use of PBM tools best practices. Likewise, $1 trillion could be lost if PBM tools are limited by government policies or other factors.
What is a PBM?
Pharmacy Benefit Managers (PBMs) now implement prescription drug benefits for some 266 million Americans who have health insurance from a variety of sponsors: commercial health plans, self-insured employer plans, union plans, Medicare Part D plans, the Federal Employees Health Benefits Program, state government employee plans, managed Medicaid plans, and others. Working under contract to these plan sponsors, PBMs use advanced tools to manage drug benefit programs that give consumers more efficient and affordable access to medications. Visante was commissioned by the Pharmaceutical Care Management Association (PCMA) to estimate the savings that these PBM tools generate for plan sponsors and consumers.
Why is Medicaid different from Medicare?
Medicaid is different from Private/Commercial insurance and Medicare Part D for many reasons, including different populations, different age mix, different disease and drug mix, problems with patients accessing care, etc. But most important for this analysis, two important PBM tools are essentially removed from our savings model:
What are PA and ST used for?
PA and ST are often used as UM tools, but PBMs offer their clients other UM tools as well, including drug utilization review (DUR), refill-too-soon checks, and quantity limits. PBMs use DUR and other utilization management programs to reduce over-utilization and waste, as well as reducing adverse drug events associated with polypharmacy.
Who is tasked with remaining compliant with the Centers for Medicare and Medicaid Services while marketing their services?
Insurance companies and agents are tasked with remaining compliant with the Centers for Medicare & Medicaid Services while marketing their services. It makes sense on the surface, but the details may need some clarifying.
Can you use Medicare on a Social Security card?
Additionally, agents shouldn’t use the word “Medicare” on their business card in any fashion that suggests they represent Medicare, like putting the words “expert,” or “specialist” behind it.
Can an agent sell Medicare Advantage?
A: CMS states that only agents who are licensed, certified, or registered under state law are permitted to market an insurance company’s Medicare Advantage or prescription drug plans. Agents are also required to complete the insurance companies’ annual mandatory certification processes for the carriers they wish to represent. Only after an agent is trained and certified to understand the rules, regulations, and specific Medicare product details can a carrier confirm an agent’s ready-to-sell status.
How much has Ohio Medicaid increased prescription drug spending?
After two years of significant erosion of pharmacy margins within the Medicaid managed care program, in January 2018, the Ohio Joint Medicaid Oversight Committee’s actuarial firm, Optumas, reported that prescription drug spending had increased nearly 20% over a two-year stretch in the Ohio Medicaid managed care program.
How much of North Dakota Medicaid is going to pharmacies?
This would be consistent with what was recently discovered in the North Dakota Medicaid managed care program, where state officials found 4.35% of all pharmacy claims were going to two health plan-owned pharmacies, yet those pharmacies received 33.77% of the state’s overall prescription drug dollars.
Does CVS have a lawsuit against Caremark?
There is also a patient lawsuit going after CV S/Caremark steering and mandatory mail-order programs for HIV/AIDS drugs. Ohio officials awarded a contract to CVS that allowed them not only to control federal money for HIV/AIDS drugs in Ohio, but also to require patients to buy their medicine only at CVS pharmacies.
What is CMS marketing?
CMS defines “communications” and “marketing” in the CMS Medicare Communications and Marketing Guidelines. Agents need to be aware of the differences between the two terms. All marketing materials need to be filed and approved by CMS. Agent created communications to members do not need CMS approval. Any agent created communication must follow ...
What do Medicare agents do?
Agents create and use a variety of materials to advertise that they sell Medicare products such as Medicare Advantage and Part D products. These include, but are not limited to, letters, postcards, posters, brochures, scripts, radio and television ads, billboards, banners, signs, yellow page ads, church bulletin ads, ...
Do insurance agents need to have a business page?
Most carriers require that the agent set up a business page on social media rather than use their personal page. Agents CAN list the name and address of their business and indicate the type of products offered (e.g., Medicare Advantage, Prescription Drug Plans, Medicare Supplement insurance plans, etc.) offered.
Can you use your name on Medicare Advantage?
Note: Medicare Advantage and Prescription Drug Plan carriers may allow the use of their logo or name in certain circumstances such as on websites, but agents must get carrier approval first.
Can you post a business card in the newspaper?
If you post your business card displaying it like an ad in the newspaper or use it as an advertising piece then CMS Medicare Communications and Marketing guidelines do apply. The business card may be attached, with a single piece of tape or a single staple to CMS approved marketing pieces.
Do you need carrier approval for a listing?
If you are listing carrier names or logos, you need carrier approval, and response time is often long and tough to get. Identify yourself as an insurance agent or independent insurance agent. Do not give the impression that you are connected, endorsed or accredited by the state or federal government.
Do insurance agents have to be compliant with CMS?
Agents still have to be otherwise compliant with CMS rules. (Examples of this would be to clearly identify to the Medicare member that you are a licensed insurance agent/broker, and include the recommended disclaimer: “Not connected with or endorsed by the United States government or the federal Medicare program.”).
Why do PBMs use complex contractual verbiage?
PBMs use complex contractual verbiage to limit the scope and extent of rebate sharing in order to maximize their profit. Therefore, unless demanded by and through strong contractual terms, PBMs are not obligated to disclose the rebates retrieved they receive from rebate aggregators, even those that the PBM wholly owns.
What is NPRM in drug law?
The current administration withdrew a notice of proposed rulemaking (NPRM) in 2019 that would have altered the drug marketplace. The NPRM sought to eliminate the “safe harbor” that permits PBMs to legally extract billions of dollars in manufacturer rebates with little or no transparency.
What is manufacturer rebate?
Manufacturer rebates are cash payments made by pharmaceutical manufacturers to PBMs that are theoretically designed to act as drug discounts. Pharmacy rebates are point-of-sale fees or post-sale chargeback (e.g., audit recoupment) that PBMs retain from their member pharmacies. Unfortunately, rebates became a lucrative revenue source ...
Can PEHP verify rebates?
In other words, PEHP was prohibited from verifying the total rebates that ESI procured on behalf of PEHP. Plan sponsors are cautioned to negotiate robust auditing provisions in PBM contracts to prevent such schemes.
Does OptumRx pay for caps?
OptumRx purported that it paid Broward County all rebate funds it received, through CAPS, from the drug manufacturers. However, the rebate funds received by Broward County do not account for the funds retained by CAPS. OptumRx and CAPS are both subsidiaries of UnitedHealth Group. All plan sponsors should take the opportunity to exercise their right ...
Do PBMs pass through rebates?
Most PBMs market themselves as “transparent” and purport to “pass thru” all rebates to plan sponsors. However, recent litigation has brought that into question for some of them. We have seen instances where PBMs secretly use little-known rebate aggregators that are often PBM-owned or affiliated in the manufacturer rebates arena.
Do PBMs have contractual privity?
What’s worse is that PBMs play wordsmithing games with plan sponsor contracting. Plan sponsors get zero information directly from rebate aggregators, plan sponsors have no “direct contractual privity” with rebate aggregators, and in fact, plan sponsors seldom know of the existence of these secretive entities.