Medical Channel Management Programs

Specialty medication management programs offer plan sponsors a way to rein in costs, uncover hidden drug charges, and close the “oversight gap.”

Specialty medication costs are rising fast and are a major concern for employers and plan sponsors. For most plans, fewer than 1% of members use specialty medications and yet they account for 38% of the total drug spending.

Part of the challenge for plan sponsors trying to rein in costs is that nearly half of all specialty drugs are currently billed through the medical benefit. This lacks the aggressive cost control strategies of the pharmacy benefit and has an “oversight gap”—a lack of visibility into spending that can result in unnecessary extra expenses.

Medical channel management programs can help plan sponsors gain better control of this “hidden” spending as the specialty market continues to expand.

GROWTH OF “HIDDEN” DRUG CHARGES

Twenty or 30 years ago, commercial payer reimbursements to specialty physicians for drug purchases averaged only 3% to 5% of specialty spending. Today, as much as 47% of specialty spending is billed under a J-code—based medical benefit, where visibility is poor and active management is difficult. Nearly 20% of these claims use a “miscellaneous” code. This makes it difficult for plan sponsors to control drug expenditures or have cost predictability.

Practices such as physicians practicing “buy-and-bill” reimbursement for highcost infusible and injectable drugs result in hidden and often unnecessary expenses for specialty medication billed within the medical benefit. As these claims are not subject to the checks and balances associated with an effective pharmacy benefit manager (PBM), they often result in higher overall costs. Some of the challenges with specialty medications billed through the medical benefit include:

• Lack of cohesive drug, health and safety oversight/coordination

• Limited reporting and utilization management

• Potential misalignment of physician financial incentives

• Unintended migration of specialty costs to the medical benefit in response to retail management programs

CLOSING THE “OVERSIGHT GAP”

Medical channel management allows plan sponsors to exclude specific specialty drugs from the medical benefit. Claims are adjudicated via the pharmacy benefit, closing the “oversight gap” and providing greater control over specialty drug spending.

By adopting a medical channel management strategy, plan sponsors can achieve greater visibility, consistent clinical protocol, better management, and documented cost savings.

A medical channel management program represents an opportunity to proactively improve clinical and financial outcomes.

CONSISTENT CONTROL

By moving appropriate specialty claims from the medical to the pharmacy benefit, plan sponsors and their members gain tighter controls and enhanced patient safety measures. A one-time program change, medical channel management offers benefits that can be realized for years to come as more specialty drugs enter the market and additional members are covered by your clients.

Medical channel management through Accredo, for example, offers benefits for both sponsors and their members.

Plan sponsor benefits

• Transparency of specialty spendingand value-based reporting

• Managed spending, trend, and utilization

• Consistent clinical protocol and plan design application

• Real-time adjudication

• Specific National Drug Code—level claims

• Demonstrated cost savings from both therapy and coverage management

Member benefits

• Enhanced clinical services, privacy, and support

• 24/7 access to specialty pharmacists and nursing support

• Adherence and side effect mentoring

• Refill reminders

• Enhanced prescription drug safety

• Shipping convenience

Based on medical claims analysis, Accredo provides client-specific medical management recommendations. The program includes the movement of targeted therapeutic categories from various distribution channels to Accredo.

It’s important to highlight that an effective medical channel management program does not disrupt medical care. It simply changes the way drugs are ordered, giving plan sponsors the ability to more effectively manage the specialty benefit and achieve greater cost control through:

• Increased visibility. Specialty pharmacy spending is tracked through the PBM, rather than a combination of PBM and medical.

• Uniform coverage management. Appropriateness of specialty coverage is aligned with plan design intent via product selection, quality management, and integrated, real-time drug utilization review edits.

• Therapy management. Managing specialty drugs through Accredo’s pharm-acy optimizes the application of nationally accepted clinical and practice guidelines, patient counseling, adherence and side effect monitoring, and waste management.

Medical channel management from Accredo has 3 distinct offerings that can be combined or tiered to help plan sponsors achieve their plan objectives. These include:

• Self-administered therapies, which are designed for administration by an individual or caregiver in a private setting.

• Rare disease therapies that require unique training to administer and/or significant clinical follow-up.

• Clinician-administered therapies, which are administered by a trained professional in a private setting, infusion center, or doctor’s office. Accredo can help identify a clinically appropriate location and coordinate patient care.

DEMONSTRATED COST SAVINGS

Medical channel management programs are proven to work. An Accredo study of 6 plan sponsors using medical channel management demonstrated savings of 8.4%—just over $1 million—for 377 specialty patients. For plan sponsors with larger populations, the cost savings associated with implementing a medical channel management program could be considerable. SPT

About the Author

Warren Davis, MBA, joined Accredo Health Group, a division of Express Scripts, in 2006. He has worked as a director of finance, director of corporate strategy, and vice president of strategy. In his current role as the vice president of specialty solutions, Warren leads the product organization which includes sales, product management, and development. Warren holds an MBA from Regis University and a Six Sigma Green Belt from Villanova University.