THIRD-PARTY PHARMACY RECONCILIATION Billy Caster Sales Solution Expert Inmar Healthcare Network Jon Brumbaugh Sr. Manager, Product Inmar Healthcare Network
Session Description A discussion and presentation on how best-in-class reconciliation practices can align directly with the ever-changing industry. We will look at reconciliation from the perspective of the pharmacy, finance and managed care organizations These best practices are derived from our experience working with 21,000 pharmacies and processing more than 1.1 billion claims. 2
The Industry is Aligning Goals The triple aim Improving the health of populations Improving the experience of care Reducing per capita healthcare costs 3
Reconciliation must Align with Trends PHARMACY FINANCE Growth of Government Payers Narrow network revolution Pharmacists as care providers Lower patient pay Overall industry growth Consolidation (M&A and partnerships) Generic price inflation (GPI) Healthcare Reform RECONCILIATION Retail clinics Patient engagement and services Specialty pharmacy Value Based Healthcare / Quality initiatives MANAGED CARE 4
Your Organization must be Aligned with Reconciliation The Pharmacy The Finance Organization Managed Care Organization Best-in-class reconciliation involves streamlined processes, transparency and communication among your pharmacy, finance, managed care departments and more. 5
The Pharmacy Patient Engagement and Services Implement, adapt, and financially track services catered to patients as the industry moves to value-based reimbursement and lower patient pay. Capture all adjudication responses Capture non-rx claims Communicate pharmacy process problems That are costing you money (i.e., drug selection, re-adjudication and service fees) Hard and Soft Dispensing Stops (Pre and Post-Edit) To protect you financially need continuous review, incorporating feedback from the reconciliation/audit process SOP documentation Pharmacy reversals, prior authorization, step therapy and patient data 6
Pharmacy and the Industry Topics affecting Pharmacy: Lower patient payment More patient services (Retail clinics, MTM, etc) Specialty pharmacy Cost reduction efforts Narrow network revolution Exceptions / Collections business intelligence Medical services 7
Increased Role of Pharmacy As of 2014, there is Between $200B and $300B in avoidable healthcare costs. Pharmacy is becoming a formidable presence 30 56 In 2010 (K): 208 225 PA NPA PCP Pharmacist In 2020: 76 Pharmacists per 100K patients In 2014: There were 13B pharmacy visits in the U.S. each year, as opposed to 470M to physicians. Source: NACDS Total Store EXPO 2014, Convenient Care: Point-of-Care Testing in the Pharmacy. Alex Adams (NACDS), Michael Klepser (Ferris State University), Karen Mankowski (Meijer Inc.), Cheryl Miller and John Tamerius (Quidel Corporation) 8
The Finance Organization Know your numbers: How you compare, what they tell you and where you can take action. Increase profitability: View business by different areas of concentration and take action: AWP: Re-billing must funnel into the receivable. 340B: Must be cared for in the receivable. Brand vs. generic vs. specialty pharmaceutical impact Collaborative approach to reconciliation between the pharmacy, point of sale, accounting, managed care and more. Set up the most efficient processes for: POS reconciliation to the third-party receivable Weekly and monthly reporting/gl feeds Payment exception management Annual review of GL Codes that drive financial reporting and help glean opportunity areas. Annual review of business rules, write-off practices, etc. 9
Finance and the Industry Topics affecting finance / accounting: Higher third-party receivable from public funding, government payers Narrow Network Revolution Cost reductions efforts Lower Patient Pay Patient services, refunds, etc. Reimbursement rate decline Generic Price Inflation New Fees (Ex: DIR) EFT payments Audits 10
Changing payment dynamic Increase drug spending with a changing demographic of payment source: Pharmacies benefit from expected overall growth in prescription spending Public funds will eventually overtake employer-sponsored spending 12% 10% 78% Source of payment for outpatient pharmacy claim 2% 5% 23% 35% 11% 53% 44% 38% 16% 66% 48% 21% 37% 45% 26% 17% 12% Individually Purchased Employer Insurance Public Funds Consumer Outof-Pocket 1973 1983 1993 2003 2013 2023F Source: Pembroke Consulting, 2013-14 Economic Report on Retail, Mail, and Specialty Pharmacies January 2014. 11
Dispensed medications by payer 65.1% 2014: 4.4B Rx, $305B 57.0% Commercial Third-Party 19.0% 8.3% 7.5% 26.0% 10.0% 7.0% Medicare Part D Medicaid Cash 2008 2009 2010 2011 2012 2013 2014 Source: IMS Health, The 2014 U.S. Pharmaceutical Market: Trends, Issues, & Outlook. August 24, 2014. 12
Dispensed medications by payer 65.1% Since 2008 522M+ new government scripts (382M Part D, 140 Medicaid) 68M+ less commercial 19.0% 8.3% 7.5% 2014: 4.4B Rx, $305B 57.0% 26.0% 10.0% 7.0% Commercial Third-Party Medicare Part D Medicaid Cash 2008 2009 2010 2011 2012 2013 2014 Source: IMS Health, The 2014 U.S. Pharmaceutical Market: Trends, Issues, & Outlook. August 24, 2014. 13
Dispensed medications by payer 65.1% Since 2012 178M+ new govt. scripts (137M Part D, 41M Medicaid) $11.9B in govt. growth ($9.2B Part D, $2.7B Medicaid) $1.72B commercial shrinkage 19.0% 8.3% 7.5% 2014: 4.4B Rx, $305B 57.0% 26.0% 10.0% 7.0% Commercial Third-Party Medicare Part D Medicaid Cash 2008 2009 2010 2011 2012 2013 2014 Source: IMS Health, The 2014 U.S. Pharmaceutical Market: Trends, Issues, & Outlook. August 24, 2014. 14
The Managed Care Organization Know your numbers: How you compare, what they tell you and where you can take action. Use reconciliation data in pricing strategies and drug purchasing. Predict impact of industry changes: generic conversion, PBM mergers, product cost changes and more. Optimize payer relationships and contracts with value-added analytics and insight. Protect yourself from audits in contracts. Understand the financial scale of every contracting term. Solid audit management process to understand audit language in contracts, address all responses on time, effectively negotiate and reduce risk of future audits. 15
Managed Care and the Industry Topics affecting Managed Care: Value-based quality initiatives Patient Services Emerging Care Models and the Growth of Accountable Care Organizations (ACOs) Healthcare Reform Differing network design Adherence Audits 16
Emerging Care Models (ACOs/PCMHs) Accountable Care Organizations (ACOs): Collaborative, collective accountability for the cost and quality of care delivered Outpatient pharmacies are well positions to support ACOs: Patient Care Management and Education Compliance and Evidence-Based Care Minimization of Waste and Cost Containment Medication Reconciliation Patient Identification and Services Local Provider for Accountability, Efficiency, and Quality Pharmacists have the opportunity to leverage their services to influence patient outcomes that drive a number of specific ACO quality measures Source: NACDS Total Store Expo 2014: Emerging Care Models: Partnerships with Pharmacies to Drive Patient Outcomes. Mike Dull (Shop Store Operating Co., LLC) and Donald Klepser (University of Nebraska Medical Center) 17
The Positive Perception of ACOs Increase Prescribing of Generics and Biosimilars Increased Prescribing of Generics and Biosimilars mprove Prescribing Adherence to Evidence-Based Guidelines Improve Prescribing Adherence to Evidence-Based Guidelines Improve Overall Health Outcomes Improve Overall Health Outcomes Decrease Overal Healthcare Costs Decrease Overall Healthcare Costs Optimize Lowest Cost Site of Service Optimize Lowest Cost Site of Service Improve Coordination of Medication Reconciliation Improve Coordination of Medication Reconciliation Drive Improved Adherence Drive Improved Adherence Enable Value-Based Payment Reform Enable Value-Based Payment Reform Decrease Total Pharmacy Costs Decrease Total Pharmacy Costs 30% 59% 54% 54% 51% 49% 48% 46% 69% 0% 20% 40% 60% 80% Source: EMD Serono 2014 EMD Serono Specialty Digest, 10 th Edition, 2014. 18
Growth of ACOs and PCMHs 800 Accountable Care Organizations 600 400 200 0 42 493 2010 2013 2014+ 2010 2013 2014+ In 2014, there were more than 5000 Patient Centered Medical Homes (PCMH) Source: NACDS Total Store Expo 2014: Emerging Care Models: Partnerships with Pharmacies to Drive Patient Outcomes. Mike Dull (Shop Store Operating Co., LLC) and Donald Klepser (University of Nebraska Medical Center) 19
Best practices in new-age reconciliation Evergreen strategies Strong reimbursement exception management tools Price optimization Payer and reimbursement tracking Strategies for aligning reconciliation with the industry: Patient engagement and medication adherence programs Measure quality and value metrics Track the metrics that drive your business success Future Strategies Value-based reimbursement Quality adherence and outcomes Adapt and transition your strategies to create a sustainable business model. 20
Making it happen Need a Healthcare Network partner that can do these things: Reconciliation know your reimbursement metrics and peer benchmarking Contract management and modeling solution Audit tool that provides insights and preventive measures Customer / Patient analytics 21
Jon Brumbaugh Jon.brumbaugh@inmar.com Billy Caster Billy.caster@inmar.com