A health plan saved $28.5 million by separating the service physicians perform in administering medical injectable drugs (MIDs) from the cost of the drugs themselves. Highmark, a licensee of the Blue Cross & Blue Shield Association, paid for the drugs and the doctors’ time and skill through the medical benefit. Historically, the plan used a buy-and-bill model, but changed the distribution to an up-front purchase using NDCs (National Drug Codes), which are more accurate than medical J-codes.
Crucial to making this work was Highmark’s partnership with Walgreen’s. The specialty pharmacy could purchase the drugs more cheaply and also was able to do more than just supply the medications.
“This specialty pharmacy is able to serve as a pharmacy provider, a home infusion therapy provider, and a medical provider,” says Eric J. Culley, PharmD, MBA, director of clinical pharmacy services at Highmark and coauthor of a study about the program that appears in the Journal of Managed Care Pharmacy.
That’s how Highmark was able to make this work. Initially, the program involved four injectable agents, but grew to include more than 50 drugs by 2008.
Highmark reviewed injectable drug claims and found that many of the specialty drugs were already being supplied by Walgreen’s, something it took into account when it weighed which specialty provider to use.
“We stayed with them because we believed that we could negotiate a better rate without disrupting the supply chain line, while providing the same quality service to our members,” says Christopher Baldini, clinical pharmacy specialist and coauthor.
The study cites a drug cost savings in 2007 of $15.5 million or $290 per claim (28 cents per member per month) and about $13 million or $201 per claim (23 cents PMPM) in 2008, or a savings of about $28.5 million over two years.
The PMPM savings amounted to about 25 cents over two years.
Physician participation in the program was not mandatory, with 28 percent of all MID claims in 2007 and 22 percent in 2008 paid to physicians under the buy-and-bill method.
“We feel the program could be replicated by other plans,” says Baldini. He can’t emphasize enough the relationship with a specialty pharmacy that supports the health plan’s benefits, authorization requirements, and service expectations.
Culley says, “We know that this concept is new and that not many plans are doing this. But it doesn’t mean that it’s not worthwhile. We’ve seen a tremendous savings.”