When we operate our cars, we often assume the car operates as intended by the manufacturer. We’ve learned oil changes and checkups are the easiest way to assure this. These checkups look at the cars different systems and how they function. Adjustments are then made as required. If the car operates outside of intended parameters and no adjustments are made, then long term performance will likely be negatively affected.
If you think of your pharmacy benefit plan in this same way, an annual pharmacy audit is the best way to assure your plan is being administered as intended and the contract terms are being correctly applied. If you think of a car, consider how it might run if the oil was low, the spark plugs were the wrong ones, the oil was the wrong type, and the air in the tires was low. Your pharmacy plan is much like this. Actual discounts, rebates, and PBM claim adjudication may be different than what is defined in the contract. It may be very difficult to know if a plan is operating as intended without your annual pharmacy plan audit. When you drive away from your cars oil change and check up you feel good that you’re doing what is needed to be a good steward of this important personal asset. When you complete an annual pharmacy plan audit you will feel the same, but the magnitude of the potential savings is much greater each year and over time.
The closest thing to a cars owner’s manual for a pharmacy benefit plan is the PBM’s contract. The annual audit keeps pricing and plan design parameters under control and ensures that claim adjudication doesn’t stray from the agreed upon contract terms.
When your auditor looks under the hood of your pharmacy plan, they’ll look at:
- Financial contract elements like negotiated discounts, MAC list application, dispensing fees, administration fees, etc.
- Rebates to assess the financial and procedural accuracy of rebate reimbursement based on the contract.
- Plan design with a focus on copays, coinsurance, deductible, and claims filled for excluded and non-FDA approved drugs.
- Clinical programs that include proper application of prior authorizations, quantity limits, step therapy programs, etc.
- Eligibility looking at all claims filled by eligible members on data of fill.
- Performance guarantees to validate the service guarantees in the contract: customer service answer times, mail service days to fill and delivery, etc.
As you think about the need for your plan’s checkup or audit, consider these questions:
- How do you know if your PBM is delivering what was promised?
- How has the actual plan performance compared to the expected performance illustrated during the RFP process?
- How are the claims being adjudicated compared to what’s in your PBM contract and plan design?
You schedule your car’s oil change and checkups at specific intervals. Reach out to us today to schedule your plan’s checkup (its annual audit)! This is one of the best offensive strategies a plan sponsor can use to manage pharmacy benefit plan costs. Auditing will keep pricing and plan design parameters under control and ensure that claim adjudication does not stray from the agreed up on contract terms. An audit will typically pay for itself, but just as important, it will present you with a more detailed understanding of your PBM contract.
Additional insight is available on the different types of audits and the process of the audit itself in earlier CobaltRx blogs at https://www.cobaltrx.com/blog. To learn more, we can be reached at 225-281-0291 or visit us on the web at www.cobaltrx.com.