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.”

Managed Care’s Top Ten Articles of 2016

There’s a lot more going on in health care than mergers (Aetna-Humana, Anthem-Cigna) creating huge players. Hundreds of insurers operate in 50 different states. Self-insured employers, ACA public exchanges, Medicare Advantage, and Medicaid managed care plans crowd an increasingly complex market.

Major health care players are determined to make health information exchanges (HIEs) work. The push toward value-based payment alone almost guarantees that HIEs will be tweaked, poked, prodded, and overhauled until they deliver on their promise. The goal: straight talk from and among tech systems.

They bring a different mindset. They’re willing to work in teams and focus on the sort of evidence-based medicine that can guide health care’s transformation into a system based on value. One question: How well will this new generation of data-driven MDs deal with patients?

The surge of new MS treatments have been for the relapsing-remitting form of the disease. There’s hope for sufferers of a different form of MS. By homing in on CD20-positive B cells, ocrelizumab is able to knock them out and other aberrant B cells circulating in the bloodstream.

A flood of tests have insurers ramping up prior authorization and utilization review. Information overload is a problem. As doctors struggle to keep up, health plans need to get ahead of the development of the technology in order to successfully manage genetic testing appropriately.

Having the data is one thing. Knowing how to use it is another. Applying its computational power to the data, a company called RowdMap puts providers into high-, medium-, and low-value buckets compared with peers in their markets, using specific benchmarks to show why outliers differ from the norm.
Competition among manufacturers, industry consolidation, and capitalization on me-too drugs are cranking up generic and branded drug prices. This increase has compelled PBMs, health plan sponsors, and retail pharmacies to find novel ways to turn a profit, often at the expense of the consumer.
The development of recombinant DNA and other technologies has added a new dimension to care. These medications have revolutionized the treatment of rheumatoid arthritis and many of the other 80 or so autoimmune diseases. But they can be budget busters and have a tricky side effect profile.

Shelley Slade
Vogel, Slade & Goldstein

Hub programs have emerged as a profitable new line of business in the sales and distribution side of the pharmaceutical industry that has got more than its fair share of wheeling and dealing. But they spell trouble if they spark collusion, threaten patients, or waste federal dollars.

More companies are self-insuring—and it’s not just large employers that are striking out on their own. The percentage of employers who fully self-insure increased by 44% in 1999 to 63% in 2015. Self-insurance may give employers more control over benefit packages, and stop-loss protects them against uncapped liability.