Blue Cross and Blue Shield: Change in Pharmacy Benefits Affects Federal Enrollees : Statement of Sarah F. Jaggar, Director, Health Services Quality and Public Health, Health, Education, and Human Services Division, Before the Subcommittee on Civil Service, Committee on Government Reform and Oversight, House of Representatives

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The Office, 1996 - Drugs - 13 pages
 

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Page 13 - I would be pleased to answer any questions. For more information on this testimony, please call...
Page 12 - Medco negotiated with drug manufacturers. The plan received 90 percent of the total rebates, and the PBMs retained 10 percent as an administrative fee and incentive to increase the amount of discounts. PCS did not meet its rebate guarantee in 1995 and as a result incurred a penalty. Concurrent and retrospective drug utilization review (DUR) accounted for about $10 million in savings that resulted from clinical activities the PBMS performed. Concurrent DUR is performed before dispensing a drug to...
Page 11 - MAC 7.2% prior approval manufacturer discounts retail and mail order pharmacy discounts Source: Blue Cross and Blue Shield Association. Retail and mail order pharmacy discounts accounted for about $264 million in savings. For retail, the savings represent the discounts PCS achieved from negotiating with individual pharmacies the amount PCS would reimburse them for prescriptions.8 Mail order savings were derived from discounts that the Association negotiated with Medco.
Page 2 - Federal enrollees' shift to the Association's mail order program has been substantial. During the first 5 months of 1996, the total amount paid retail pharmacies for prescriptions dispensed to the enrollees affected by the benefit change decreased by about 36 percent, or about $95 million, from the amount paid during the same period in 1995. In addition to assessing Medco's performance related to the benefit change, the Association reviewed both PBMS' overall performance in meeting their contract...
Page 12 - s intervention program accounted for about $13.5 million in savings. The program encourages patients to use, and physicians to prescribe, less expensive brand-name drugs considered as safe and effective' as other, more expensive brand-name drugs. The prior approval program accounted for about $36.5 million in savings. This program covers 13 drugs that require Association approval before dispensing and derived savings from prescriptions denied reimbursement or never filled.i0 The coordination of benefits...
Page 12 - COB is an industrywide method used to avoid paying duplicate benefits to an individual covered by another insurer. 'Medco uses an independent group of health care professionals, known as a Pharmacy and Therapeutics Committee, to evaluate drugs in all therapeutic categories on the basis of safety, efficacy, and substitutability. "Prior approval is required for medications that may be used to treat conditions or illnesses that are not covered by the Association, are outside the Food and Drug Administration...
Page 7 - OPM also indicated that the Association should arrange for mail order customers who needed delayed medications to get up to a 21 -day supply from PCS network retail pharmacies without paying the 20-percent copayment. This ad hoc arrangement required PCS to respond quickly to the needs of the Association and over 5,000 enrollees who used this service.6 The copayments for over 10,000 retail prescriptions dispensed to these enrollees cost the plan approximately $291,000.
Page 2 - ... about 66 percent greater than anticipated. As a result, Medco could not meet its customer-service performance measure for prompt dispensing and delivery of prescriptions to enrollees for several weeks during the benefit change's implementation. Medco, PCS, and the Association collaborated, however, to respond to this increased volume, and, by mid-March 1996, Medco was meeting its customer-service performance measure. Although the Association and Medco appear to have corrected the problems experienced...
Page 5 - ... ending January 27, 1996, they reached 233,000— an amount about 66 percent greater than expected. By the week ending March 9, 1996, and continuing through the week ending April 6, 1996, the number of weekly prescriptions received ranged between 175,000 and 187,000. Enrollees with Medicare part В benefits accounted for most of the increase in prescriptions. About 9 percent of these enrollees...
Page 13 - For more information on this testimony, please call John Hansen, Assistant Director, at (202) 512-7105.

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