Are You Verifying Your PBM Guarantees?
There are a number of key performance measures that drive the success or failure of your PBM contract. Knowing how your PBM can manipulate each will greatly improve your ability to lower your total prescription spend. Verifying the validity of your PBM contract performance guarantees is a critical part of this equation. Validating all of the parts of your PBM contract is a complex task but one that can yield substantial savings. At Cadre Rx we know how to identify, validate and verify all of the critical contract performance measures that hold your PBM accountable. After working with our team your organization will have the skills and tools necessary to self monitor your PBM’s performance and insure that you are receiving the lowest possible price for your prescription products.
There are several key performance measures (KPM’s) that must be routinely monitored. PBM’s commonly leverage loopholes in their contracts to create revenue sources.
1) Total Rx Spend is a product of two variables, unit cost and utilization rate. Unit cost is typically a variable controlled by your PBM contract and should be periodically monitored.
2) Brand Prescriptions are usually reimbursed based on AWP (Average Wholesale Price) minus a percentage discount plus a dispensing fee. AWP should be monitored along with the negotiated reimbursement discount. Review of reimbursement rates for retail, mail order, and specialty pharmacy claims is necessary to verify contract compliance.
3) Generic Prescriptions are typically based on a proprietary reimbursement list, MAC (Maximum Allowable Cost) or MRA (Maximum Reimbursement Amount). All these rates are expressed in terms of effective discount off AWP. It is critical to verify generic guarantees and evaluate the methodology used for such calculations.
Helping our clients verify their PBM performance and lowering pharmacy benefit cost is our business. On average we have saved our clients $3 to $6 per claim. Cadre Rx knows the industry well, and we are confident of our ability to save our clients money.