With the obvious explosion of vaccine utilization into our culture in the last few months, have you considered researching just how the vaccine administration reimbursements from your prescription benefit management (PBM) payers work?
The best place to start is with the PBM network agreements your pharmacy has opted to participate in. Beginning with your largest payer, consider these questions:
- Is there a vaccine pricing component for each of the PBM networks you participate in?
- Is there a dedicated vaccine network?
- Which vaccines are included or excluded from reimbursement?
- Are there any specific adjudication instructions that must be followed to assure complete reimbursement?
Once you have some idea of the mechanics that drive the reimbursement, it’s time to understand the actual costs appearing in your pharmacy data. This is often the point where “science” becomes an “art”.
Some PBMs disclose their vaccine administrative fees outright, but others employ reimbursement schedules with words like “Up to” or “No greater than” – phrases that don’t provide much insight into what your pharmacy has agreed to be reimbursed for the services it’s providing.
Can you request more strict language? Well, there is no one-size-fits-all strategy to negotiating pharmacy network agreements with PBMs. One pharmacy’s success may be heavily dependent on its size and total volume, while another may find only partial success based on geographic location.
But like any negotiation strategy, coming to the table with reasonable and well-defined priorities will always yield the most traction.
Increasing symbiosis between a health system’s pharmacy and its employee PBM plan
Health systems are in a unique position within the employee pharmacy benefit marketplace compared to most other employer groups. They have the power to maximize total plan savings simply by taking advantage of internal pharmacy resources that are not found within typical employee plans.
Health system plans can escape their PBM’s retail network demands by negotiating with its internal pharmacy to dispense drugs on a custom at-cost financial arrangement that provides savings to the plan and ensures the pharmacy is kept whole.
Likewise, pharmacy employees can be significant assets to a health system’s PBM negotiations, as well as with overall management strategy and ongoing decision-making processes. Greater coordination between a health system’s plan and pharmacy will almost always result in greater health and financial outcomes, as well as employee convenience. The triple aim outcome will always be: “better care – better service – better financial performance.”
The biggest hurdle to a health system achieving these benefits is a PBM contract that seeks to retain as much revenue within the PBM ecosystem as possible. As a result, typical PBM contracts are built without consideration of the health system’s advantages.
For example, when negotiating a custom pharmacy financial arrangement or revising formulary placement, PBM contracts may attempt to take contractual credit for the newly reduced costs or replace lost revenue with excessive fees elsewhere. 340B utilization further complicates these negotiations that require knowledgeable industry nuance to settle.
Visante offers the insights of its PBM consultants specialized in health system employer plans to assess plan performance and ensure that each of our clients receives maximum value for the organization and its employees.