Managed Care Pharmacy Practice

Transcription

1 Managed Care Pharmacy Practice Robert P. Navarro, Pharml) Principal NavarroPharma, LLC Morrisville, North Carolina Senior Vice President MediMedia Managed Care, I.I.C Trenton, New Jersey AN ASPHN" PUBLICATION' Aspen Publishers. Inc. (iaithersburg. Man land

2 Table of Contents Contributors Foreword Preface Acknowledgments xvii xxi xxiii xxv PART I FUNDAMENTALS OF MANAGED CARE PHARMACY BENEFIT MANAGEMENT 1 Judith A. Cahill, Part Editor Chapter 1 The U.S. Health Care System and the Development of Managed Care 3 Robert P. Navarro and Judith A. Cahill Introduction to U.S. Health Insurance Industry 4 Evolution of the Health Insurance Industry 6 Economic Basis for the Development of Managed Care 7 Early Development of Managed Care 8 HMO Act of Federal and State Growth in Managed Care: Medicare and Medicaid 13 MCOs: More than HMOs 14 Physician Reimbursement Mechanisms 19 Gatekeeper Physicians 22 Risk Sharing of Pharmacy Cost 22 Carve-Out and Ancillary Health Care Benefits 22 Quest for Quality 23 Impact of Managed Care on Physicians and Pharmacists 24 Member Involvement in Managed Care 26 Conclusion 27

3 vi MANAGED CARE PHARMACY PRACTICE Chapter 2 Pharmacy Benefit Management Principles and Practices 29 Robert P. Navarro Basis for Pharmacy Benefit Management 29 Principles of Pharmacy Benefit Management 32 Growth of PBMs 33 Pharmacy Benefit Management Program Components 36 Advanced Pharmacy Benefit Management Components 43 Measuring Pharmacy Benefit Management Program Performance 43 Conclusion 45 Chapter 3 Pharmacy Benefit Design, Contracting, and Marketing John D. Jones Business Basis for Pharmacy Benefit Management 47 Corporate and Government Impetus for Pharmacy Benefit Management 49 Legal Basis of Pharmacy Benefit Management 50 Benefit Design, State Requirements 52 Principles of Marketing Pharmacy Benefits 53 Payer and Patient Expectations and Decision Points 55 Role of Members in Pharmacy Benefit Provider Selection 57 Pharmacy Performance Measurements Important in Marketing 59 Marketing Campaign Advertisement Examples 60 Marketing Process 60 Pharmacy Benefit Contracting Components 62 Pharmacy Benefit Management Contracting Trends 64 Risk Contracting 65 Overview of Impact of Medicare and Medicaid 65 Risk-Contracting Elements and Executions 68 Payer Expectations 70 Performance Measurement 72 Future Trends in Pharmacy Benefit Design and Contracting 73 Conclusion 76 Appendix 3-A 77 Appendix 3-B 83

4 Table of Contents vii Chapter 4 Pharmacy Distribution Systems and Network Management 89 Lowell T. Sterler and Douglas Stephens Pharmacy Program Distribution Options 90 Community Pharmacy Provider Networks 90 Pharmacy Provider Network Development 92 Pharmacy Provider Network Contracting 93 Participating Pharmacy Provider Agreement 94 Participating Pharmacy Provider Manual 95 Participating Pharmacy Network Management Issues 95 Measuring Performance 97 Audits 98 Reports 100 Member Satisfaction 100 In-House Pharmacies 101 Mail Service Pharmacy 107 Developing an Integrated Distribution System 108 Pharmacist's Role Ill Impact of Managed Care on the Profession of Pharmacy 114 Conclusion 114 Appendix 4-A 116 Chapter 5 Pharmacy Data and Information Systems 125 John H. Romza and Garth E. Black Scope of Pharmacy Information Management 125 Pharmacy Information Management Systems 127 PMSs and Electronic Data Interchange 134 Role of Switching Companies 135 Internet Technology 137 Adjudication Systems 138 Other MCO Information Systems 141 Conclusion 143 Chapter 6 Drug Formulary Management 145 Michael J. Dillon History and Purpose of Drug Formularies 145 Definitions 147 Why Formularies? 148

5 viii MANAGED CARE PHARMACY PRACTICE Decision-Making Process 151 Formulary Exception Process 157 Formularies' Relationship to Other Pharmaceutical Care Practices 158 Future Directions 161 Conclusion 163 Chapter 7 Drug Utilization Review Strategies 167 Andrew M. Peterson and Marcus D. Wilson History and Current Role of DUE/DUR 167 Types of DURs 170 Steps in Conducting DURs 173 Application of DUR in Pharmacy Benefit Management 175 Prior Authorization 176 Prospective DUR 178 Physician Education Programs 179 Performance Measurement of DUR Programs 180 Evolution of DUR 181 Conclusion 182 Chapter 8 Member Satisfaction Strategies 185 Jim Wilson and Shawn Burke Importance of Member Satisfaction 186 National Committee for Quality Assurance and Health Plan Employer Data and Information Set 189 Satisfaction Measurement among Employer Groups 191 Member Satisfaction with Pharmacy Benefits 192 Conclusion 197 Chapter 9 Pharmacy Program Performance Measurement 199 Yrena M. Friedmann and Nicholas A. Hanchak Role of Pharmacy Benefits in Overall Health Plan Performance 199 Pharmacy Performance Metrics 200 Measuring Performance of Various Components 207 Interpreting Results of Pharmacy Measurement 208 Interpreting Cost Metrics 208 Communication of Pharmacy Program Results 210 Application of Results for Program Improvement 212

6 Table of Contents ix Advanced Outcomes Management Metrics 216 Linking Pharmacy Programs to Overall Medical and Economic Outcomes 219 Conclusion 220 Chapter 10 Pharmacy Benefit Management Companies 221 Robert P. Navarro and Suzanne S. Blackburn Genesis of PBMs 221 Growth and Evolution of PBMs 226 Outsourcing Pharmacy Benefit Management to a PBM 230 Financial Arrangement between PBMs and Their Customers 236 Projecting Cost Savings Using PBM Services 237 Reintegrating the Value of PBM Services 238 Contracting for PBM Services 239 Conclusion 240 PART II ADVANCED PHARMACY BENEFIT MANAGEMENT STRATEGIES 243 Robert P. Navarro, Part Editor Chapter 11 Medicaid Pharmacy Benefit Management 245 Mary Kay Owens Legislative History 245 Administration of Medicaid Benefits 247 Funding Medicaid Benefits 248 Medicaid Eligibility 248 Medicaid Services 249 Medicaid Benefit Design 250 Managed Care Waivers 250 Medicaid Managed Care Contracts 251 Performance Measures and Member Satisfaction 252 Medicaid Pharmacy Benefit Design 252 OTC Product Coverage 253 Medicaid Prescription Copayments 253 Dispensing Fees 254 Pharmaceutical Manufacturer Rebates 255 Challenges and Opportunities in Medicaid Pharmacy Benefit Management 255 Medicaid Demographic Challenges 255

7 MANAGED CARE PHARMACY PRACTICE Developmental and Cultural Issues 256 Traditional Fee-For-Service Medicaid Benefit Management Challenges 257 Managed Care Challenges in Providing Medicaid Benefits Pharmacy Benefit Management Opportunities 261 Future Managed Care Medicaid Trends 264 Conclusion 267 Chapter 12 Medicare Pharmacy Benefit Management 269 Debi Reissman The Social Security Act of 1965 and the Tax Equity and Fiscal Responsibility Act 269 Benefits Covered under Medicare 272 Types of Medicare Programs 272 Why Medicare Enrollees Prefer HMOs to Traditional Medicare 274 Prescription Use and the Medicare Patient 275 Management of the Medicare Prescription Drug Benefit Location of Network Pharmacies 277 Drug Formularies 277 Mail Order 280 Drug Utilization Review 280 The Future of Medicare 281 Conclusion 281 Chapter 13 Quality Improvement Initiatives in Managed Care 285 Amelia Goodwin Defining Quality Health Care 285 Assigning Accountability 289 Measuring Quality 290 Current Quality Improvement Initiatives 293 NCQA 294 Joint Commission 297 American Accreditation Healthcare Commission/The Utilization Review Accreditation Commission 302 FACCT 303 AHCPR 304 HCFA 306 Other Quality Improvement Initiatives 306 Future of Quality Measurement in Managed Care 307

8 Table of Contents xi Role of Pharmacists 309 Conclusion 311 Chapter 14 Health Informatics Systems 313 Robert P. Navarro, Robert Da Silva, and Suzanne Rivkin Evolution of Pharmacy Data Standardization 314 EDI and Electronic Commerce 315 Data and Information Needs of Managed Care 318 Pharmacy and Medical Claims Integration 324 Electronic Medical Record Data 328 Building a Data Warehouse 332 Patient Outcomes Assessment 336 Electronic Prescribing 337 Merging Retrospective and Transactional Data 340 Pharmacy and Health Telematics 341 On-Line Patient Marketing 342 Conclusion 343 Chapter 15 Provider and Vendor Risk Contracts 347 Craig S. Stern, Carol J. Stern, and John M. Cronin Pharmacy Risk Contracting 347 Physician Risk Contracts 352 Reimbursement Agreements 359 Choosing a Reimbursement Methodology 364 Quality Issues 365 Forecast 366 Conclusion 368 Chapter 16 Disease Management Programs 371 Robert P. Navarro, Dale Christensen, and Harry: Leider Definition and Goals 372 Rationale 374 Medical Conditions Appropriate for Disease Management Disease Management Process 376 Growth of Disease Management 378 Role of Pharmacy Benefit Management Companies 378 Pharmaceutical Manufacturer Role in Disease Management. 379 Role of Physicians in Disease Management 380 Role of Pharmacists in Disease Management 382

9 xii MANAGED CARE PHARMACY PRACTICE Role and Source of Disease Management Guidelines 386 Role of Drug Formularies in Disease Management 388 Modifying Participant Behavior 388 Barriers to Successful Programs 391 Specialty Carve-Out and Carve-In Disease Management Companies 391 Measuring Program Performance 392 Conclusion 392 Chapter 17 Pharmacoeconomic Research and Applications in Managed Care 397 Diana I. Brixner, Sheryl L. Szeinbach, Shilpa Mehta, Seonyoung Ryu, and Hemal Shah Basics of Pharmacoeconomic Research 400 Application of Pharmacoeconomics in Pharmaceutical Companies 402 Use of Pharmacoeconomic Data for Effectiveness Claims Role of Pharmacoeconomic Research in Product Management 408 Pharmacoeconomic Information Strategies within Pharmaceutical Companies 410 Packaging Pharmacoeconomic Data for Use by P & T Committees 413 Role of Pharmacoeconomic Data in Evidence-Based Drug Formularies 416 Research Opportunities for Managed Care Organizations and PBMs 418 Role of Pharmacoeconomics in Decompartmentalizing Plan Management 418 Sources of Data 423 Opportunities for Pharmacists in Pharmacoeconomic Research and Applications 428 Conclusion 429 Chapter 18 The Role of the Pharmaceutical Industry in Managed Health Care 433 Stephen Stefano and Robert P. Navarro Influence of Managed Care on the Sales of Pharmaceuticals Relationship of Pharmaceutical Manufacturers to Managed Care 435

10 Table of Contents xiii Evolution of the Pharmaceutical Marketplace 435 Managed Care Marketing Strategy Development 442 Contractual Relationships between the Pharmaceutical and Managed Care Industries 443 Pharmaceutical Company Support Services for Managed Care 445 Future Relationship of Pharmaceutical Manufacturers with Managed Care 447 PART III PHARMACY PRACTICE ISSUES IN MANAGED CARE 449 Albert I. Wertheimer, Part Editor Chapter 19 The Impact of Managed Care on Pharmacy Practice Kenneth W. Schafermeyer Impact of Managed Care Programs on Pharmacy 452 Reimbursement for Managed Care Prescriptions 454 Administration of Managed Care Prescription Contracts Managed Care Strategies for Pharmacists 466 Effect of Managed Care on Hospital Pharmacies 470 Conclusion 471 Chapter 20 Pharmaceutical Care in Managed Care 475 Leslie S. Fish Current Trends 476 Examples of Pharmaceutical Care in Managed Care 480 Impact of Pharmaceutical Care in Managed Care: Cost and Quality 488 Reimbursement for Pharmaceutical Care: Cognitive Services Conclusion 493 Chapter 21 Pharmacist Career Path Opportunities in Managed Care 497 Carl E. Trinca The Future of Pharmacy under Managed Care 497 Preparing for a Career in Managed Health Care 499 Novel Career Opportunities 501 Maintaining Career Viability 501

11 xiv MANAGED CARE PHARMACY PRACTICE Questions Surrounding an Uncertain Future 502 Professional Responsibilities toward Career 504 Conclusion 504 Chapter 22 Ethical Aspects of Pharmacy Practice in Managed Care 507 Mila Ann Aroskar Examples of Ethical Issues and Concerns 508 Ethical Values: Their Place in Pharmacy Practice 511 Ethical Principles and Concepts in Pharmacy Practice 516 Resources for Managing Ethical Concerns in Pharmacy Practice 520 Conclusion 523 Chapter 23 Drug Policy and Regulation in Managed Care 525 Natalie A. Spencer and M. Therese Crouse Food and Drug Administration Issues 525 Direct-to-Consumer Advertising 531 Patient "Bill of Rights" Initiatives 532 Patient Privacy Issues 536 Fraud and Abuse and Consumer Protection Legislation 541 Therapeutic Interchange 543 Narrow Therapeutic Index Drugs 545 Employee Retirement Income Security Act 547 Licensing 550 Any Willing Provider and Freedom of Choice Legislation Mail Service Pharmacies 553 Conclusion 554 Chapter 24 International Opportunities for Pharmacists in Managed Care 557 Albert I. Wertheimer Managed Care Techniques 560 Austria 562 Denmark 562 Finland 562 France 563 Germany 563 Italy 563

12 Table of Con ten ts xv The Netherlands 563 Norway 564 Sweden 564 Switzerland 564 United Kingdom 565 Career Opportunities Abroad 565 Conclusion 567 Chapter 25 Future of Pharmacy Benefit Management 571 Robert P. Navarro Forces of Change 572 Reaction and Interaction of Change Forces 574 Impact of Forces of Change 575 Pharmacy Practice in the Year 2000 and Beyond 589 Conclusion 590 Glossary 593 About the Contributors 625 Index 632