As pharmacy benefits costs continue to rise, focus on pharmacy benefit manager (PBM) contracting is becoming more important.
Employer groups, Union Funds, Third Party Administrators, and Managed Care companies are selecting their Pharmacy Benefit Manager based on price. The PBM with the greatest discount off AWP is selected with the hope that the greatest discount will result in the desired cost containment. However, are you really getting what you think you bought.
During the selection process of your PBM, did you evaluate:
- Effective Discount of AWP vs Actual?
- Effect of DUR & Zero Billed Claims?
- Package size at mail order?
- PBM MAC vs HCFA MAC?
- Amount of Drugs on MAC?
- How is drugs off MAC Priced?
- Rebateable claims vs Non rebateable?
- Pass-through vs Margin pricing?
- How is rebates determined?
- Have the PBM re-classified generic drugs to brand drugs?
- What is your discount in relation to WAC
Retrospective Auditing can analyze all claims that have been paid within a contract period. Most Pharmacy benefit contracts are 3 years. The Retrospective audit can analyze all claims and determine the compliance with the PBM contract.
Seneca Consulting provides a comprehensive PBM claim audit that includes 100% of the paid claims. Seneca can perform the PBM audit using either First Databank, or Medispan. We can also determine AWP rollback neutrality, and effective discounts off WAC!
Detailed analysis of actual discount off AWP for both retail and mail claims. Actual discount is determined by the AWP price on the day dispensed as published by either Medispan or FirstDataBank. Detailed analysis of MAC pricing and methodology.
Over-Charged Claims Detail
Report identifying all over charges claims. Details include AWP price, billed price and amount overcharged. This report is provided in any format requested by the group or PBM.
Cost Quantity Discrepancy Summary
In some instances, total savings are realized from an average percentage of claims throughout a certain time period. This average can be altered by undercharging for higher quantity claims. The total average of savings for the year can be altered based on their contract terms.
Mail Order Analysis
It is becoming a common practice to bill for mail delivery medications based on a smaller package size than what is purchased by the mail delivery facility. Audit will provide an average package size billed as well as the actual discount received.
Determine if rebate terms were met.
How does it work?
The PBM provides a electronic claims file in a industry standard format (NCPDP 2.0 Data Elements). This claims file is provided with every invoice.
The claims are electronically repriced based on the terms of the PBM contract. Since the claims file is a standard format, and the clients contract terms are built into the RxAnalyser system, any discrepancies are identified within 72 hours!!
Either Seneca Consulting, or the client, can then dispute any overpriced claims OR identify any claims that should not have been covered by the clients pharmacy plan design!!
In addition to the compliance capability of the Prospective Audit, The claim utilization files are merged to create a claims data warehouse. The data warehouse is then used for actual plan design modeling and could also aid in any health intervention programs.
Other applications include:
- Case Management / Utilization Management
- Stop-Loss reporting and trigger
- Speciality Drug compliance and alternative therapy determination.
- AWP Neutrality calculation
- WAC discount calculation
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