Pharmacy Benefit Manager
We know that administration of the Medicaid pharmacy benefit is highly complex regardless of delivery system; however, states face unique challenges when the benefit is delivered via managed care. Under this approach, each state’s Medicaid health plan typically contracts directly with their own pharmacy benefit manager (PBM), which adds a layer of complexity and opacity to the system. To address these challenges, states have enacted policies to improve transparency, mandate minimum reimbursement levels, and/or implement delivery models with additional controls or oversight, such as uniform prescription drug lists, carve-outs, and/or “single PBM” (SPBM) models.
That’s why government agencies need a partner with specialized knowledge and dedicated expertise to help them navigate these challenges and deliver results. Our real-world understanding of federal, state, and local government agencies makes us particularly well qualified to provide clients with the timely and targeted solutions they need most. Our team of pharmacists, accountants, analysts, and data specialists work together providing their specialized knowledge assisting our government clients in the oversight and management of their prescription benefits. One of the strengths of our PBM oversight and audit staff is our extensive understanding of pharmacy reimbursement and benefit management, which we have pioneered nationally based on actual drug acquisition costs. This work has contributed to drug-pricing transparency, generated substantial program savings for our clients, and enhanced our PBM oversight and audit approach.
Our Services
Myers and Stauffer has considerable experience providing multiple channels of support in working with drug formularies and PBM systems. Our services include oversight and compliance within the management of the state Medicaid pharmacy benefit through both the managed care and fee-for-service (FFS) delivery systems, oversight and audit within state employee and municipal health benefit programs, and support for state PBM licensure and regulatory compliance programs.
Additionally, our PBM audit practice extends federally to CMS, as we have performed financial-related examinations of health and drug plans participating in the Medicare Advantage (Part C) and Medicare Prescription Drug (Part D) programs since 2006.
Pharmacy Benefit Oversight in Medicaid Managed Care
Managed care has become the predominant delivery system within Medicaid, with nearly 75 percent of beneficiaries enrolled in comprehensive managed care organizations (MCOs). While an optional benefit, prescription drug coverage is provided by all state Medicaid programs, with most states opting to include the pharmacy benefit as a carve-in within their managed care programs. In doing so, each of the state’s MCOs typically contracts directly with a pharmacy benefit manager (PBM) and thus are at-risk for the pharmacy benefit. This adds a layer of complexity and opacity to the system.
In response to the challenges associated with PBMs, many states have increased requirements to improve pharmacy benefit oversight in Medicaid managed care. More recently, states have begun to consider delivery models that offer increased control of the pharmacy benefit, including use of uniform prescription drug lists.
For Medicaid programs interested in exploring alternative models for delivery of the pharmacy benefit, Myers and Stauffer assists states with evaluation of various options, such as the single PBM model used within the managed-care environment or the potential of a carve-out of the pharmacy benefit from the managed care benefit whereby the pharmacy benefit remains in managed care, yet MCOs are required to leverage a PBM selected by the state. Additionally, we help states implement new pharmacy-benefit delivery models through procurement support, readiness reviews, reimbursement consulting, and post-implementation oversight.
PBM Oversight with State Municipal Employee Health Benefit Programs
We provide PBM audit services to a variety of state and municipal programs for oversight of the pharmacy benefit provided through employee health-benefit programs. These programs tend to incorporate contracting terms commonly applied in commercial insurance programs, including pricing, rebate, and other performance guarantees, as well as detailed benefit-design specifications, including formulary, step therapy and prior authorizations.
We audit all of the major PBMs and have developed systems and analytical processing programs to test compliance with contract parameters. Our testing offers the most current intelligence customized exactly to each health plan’s prescription benefits and contract requirements to meet the specifications of each audit.
PBM Oversight within State Licensure and Regulatory Compliance Programs
As more states are tasked by their legislative branch with the responsibilities to license and regulate the PBM industry, states are developing standards and requirements that protect the interests of patients, pharmacies, and health plans operating in their states. Given the depth and breadth of our experience in PBM audit and oversight, Myers and Stauffer is ready to assist clients as they establish or enhance PBM compliance audits within their state’s regulatory environment.
We have helped clients with Maximum Allowable Cost fee-schedule compliance, reimbursement appeals process oversight, prompt payment requirement testing, and other areas for which states are implementing regulations on PBM operations.
PBM Oversight within the Medicare Advantage and Medicare Prescription Drug Programs
Since 2006, we have worked with CMS to perform financial-related examinations of health and drug plans participating in the Medicare Advantage (Part C) and Medicare Prescription Drug (Part D) programs.
These examinations include extensive sampling of drug and medical claims, as well as review procedures to ensure that direct/indirect remuneration and drug rebates are correctly calculated and reported. We have also participated as a Medicare Drug Integrity Contractor since the inception of Medicare Part D assisting in the identification and prevention of fraud, waste, and abuse.
Since 2010, we have partnered with CMS to establish audit designs, protocols, and procedures for conducting compliance and performance audits in the review of prescription drug plans (PDP) and Medicare Advantage Organizations (MAO) to ensure compliance with Medicare program requirements. While conducting these audits, we focus on evaluating plan sponsors’ compliance with requirements for formulary administration, coverage determinations, appeals and grievances, and compliance program effectiveness.
