PBM stands for pharmacy benefit manager. It manages prescription drug benefits for health plans, employers, and government programs. The goal is to reduce patients’ prescription drug costs through negotiation, management of drug benefits, and various cost-saving programs.
Workers’ compensation claims involving prescription drugs pose various difficulties for insurance companies. There are multiple ways to deal with these issues, but one of the most effective approaches involves collaboration between insurance providers and PBMs.
In this article, we will outline five reasons why partnering with PBMs is ideal and provide tips for selecting the best partner.
Benefits of PBM
Let’s look at some of the benefits of pharmacy benefit managers.
- Time-Saving
PBM saves claims adjusters and examiners a lot of time. PBMs can act as third-party administrators by handling and coordinating benefits with a person’s health insurance. This allows the adjusters and examiners to focus only on reviewing claims rather than spending time dealing with copays, deductibles, etc. It helps take on some of the administrative burden.
- Reduced Costs
Another benefit is that PBMs will have negotiated reduced pharmaceutical service prices for the insurance company and its clients. PBMs secure discounted rates through a network of high-quality pharmacy providers that insurance claimants can use to fill any prescriptions related to their claims.
- Ensuring Appropriate Prescriptions
PBMs can quickly assess the suitability of prescriptions for an insurer’s clients. A pre-authorization process enables the PBM to confirm that all prescriptions related to a claim relate to that person’s injury or accident.
For instance, PBM at myMatrixx uses data analytics tools like myDataSense to analyze prescription trends and help payors make informed decisions. Once verified as claim-relevant, the client pays nothing out of pocket for their prescription.
Additionally, PBM will analyze the medical necessity of an exact brand-name prescription and evaluate whether a generic alternative could safely and effectively be used instead to help lower costs for the claimant and insurer.
- Evaluating Compounded Medication Costs
Compound medicines are specially mixed prescriptions from various ingredients customized for each person. They cost more to process than regular prescriptions because multiple drugs are used, along with special equipment and staff time.
PBMs have a payment system for reviewing compound drug bills, considering all the extra costs. This proprietary method helps the insurance company avoid unexpectedly large expenses.
- Extra Services
PBMs can boost customer satisfaction by offering handy extras. Many of them will deliver prescriptions right to your door. That way, you know you’ll get the medicine you need even if you can’t pick them up yourself.
Selecting the Best PBM
Payers, like workers’ compensation insurers, should know some essential things about pharmacy benefit managers (PBMs) in order to select the best PBM. PBMs are intended to lower prescription drug costs but may lack transparency and prioritize their own profits over saving money for payers.
- Business Models and Pricing
A core PBM function is processing prescription claims according to payor rules. While PBMs intend to save money, quantifying and keeping those savings long-term can be challenging. Some PBMs can promise big discounts but then covertly change policies to mainly benefit themselves financially at payers’ expense.
Payors need to understand how PBMs work to steward funds well. Business models like pass-through versus spread pricing impact fees.
- Market Costs and MAC Lists
Maximum allowable cost (MAC) lists set the maximum price PBMs will reimburse pharmacies per generic drug. Importantly, PBMs create and manage their own MAC lists.
The average wholesale cost for generic medications can differ between companies and change over months. MAC lists were meant to make reimbursement fair based on real market costs, keeping pharmacies from always picking the priciest generics. However, some PBMs use different MAC lists for insurance plans versus pharmacies. That lets them make hidden money off charging one price in one place and another elsewhere.
- Contract Language and Rebates
Contract language can sometimes be vague, leaving room for unclear meanings. Money promised back to customers through rebates isn’t always entirely handed over. Those companies that handle prescriptions online or through the mail may automatically send refills for drugs people don’t need anymore, causing unnecessary financial spending.
Insurance companies must consider who they select as partners and carefully review the contract details. Even after the partnership begins, the insurance company still needs to confirm that the PBM is focused on saving money for them rather than maximizing its profits through unclear practices.
Endnote
To sum it up, working with one of the prescription benefit manager companies (PBMs) can have many advantages. They take care of a lot of administrative burdens, try to negotiate lower drug prices, look closely at costs for compound medicines, and sometimes provide extras like shipping prescriptions to people’s homes. However, insurance companies should do their research and only partner with reputed PBMs.
