How to help alleviate specialty Rx costs
Originally posted September 9, 2014 by Melissa A. Winn on https://ebn.benefitnews.com.
Half of large employers say the cost of specialty pharmacy drugs is their second or third highest cost-driver, behind high-cost claims and special conditions, according to a recent survey by the National Business Group on Health. Brian Marcotte, NBGH’s president, calls the concern “significant,” considering specialty pharmacy currently impacts only about 2% of the population, but advancements in the manufacturing of these expensive drugs threaten to greatly increase the number of employees using them.
As employers consider their 2015 health plan designs, they “are very focused on specialty pharmacy drugs and the potential impact they have” on the company’s bottom-line, says Marcotte. Benefit advisers can add value by offering solutions to reign in the costs of these drugs, including programs to limit the quantity of the drugs dispensed at any one given time, the use of prior authorization to confirm the necessity of the treatment, and even the use of a freestanding specialty pharmacy.
“Benefit advisers should make sure employers are utilizing all of the specialty clinical programs offered by the medical and pharmacy vendors for their benefits,” says Brenda Gagnon, a pharmacy benefit adviser and president and CEO of the health care consulting firm B.M Gagnon Associates.
This is especially true in light of the fact the utilization of the drugs is bound to increase. “Current estimates for specialty medications are that they will cost an employer 50% to 60% of their total health benefits by 2016,” says Gagnon.
That’s true not only because the high cost of developing and manufacturing the drugs is reflected in their high price tag, but also Gagnon says, because “drug manufacturers have put more effort into finding more than one drug therapy for the drug.”
For example, she notes, AbbVie’s Humira is used for rheumatoid arthritis, Crohn’s disease, colitis and psoriasis.
Research and development costs are “passed onto the employer when an employee is taking a specialty medication,” Gagnon adds, saying the cost of the drugs can be anywhere from $1,200 to $12,000 a month, depending on the disease.
Utilization controls
An employer client has no control over the high price tag on these drugs, says Michael Zucarelli, national pharmacy practice leader for the employee benefit and financial firm CBIZ.
Where benefit advisers can help employers tame their client’s drug spend, however, is through health plan options designed to manage these drugs’ utilization, he says.
First and foremost, plans should have some sort of appropriate use protocol or prior authorization. Such a procedure would ensure claims are reviewed to make sure the drugs are safe and effective for the employee, as well as safeguard the plan financially, suggests Zucarelli.
In addition, employers have an opportunity to manage drug use as the number of specialty drugs available to treat any one disease expands, creating competition within the drug classes.
Employers “can now become a little more creative in how they set up their plan. They may prefer one or a couple of treatments over another,” he says.
This can be designed as a formulary in which a less expensive drug option would be covered at 100% and the more expensive option would require the employee to pay 100% of the cost share, he says. Otherwise, it can be set up as a step-therapy program, in which the more expensive drug cannot even be used until the less expensive option has been tried and failed.
“We’re seeing plan sponsors look at that as an option and more are adopting it,” says Zucarelli, adding that he typically advises employers to institute a step-therapy program as soon as possible, while it affects only a small number of plan members.
Advisers can also work with employers on channel management, Zucarelli suggests, saying employers should have a consultant, pharmacy benefit manager, or medical plan carrier evaluate where the drug spend is to gain visibility and look at opportunities for site-of-care management.
“Maybe a patient is getting a particular specialty drug in a hospital infusion suite and that may not be the most convenient or cost-effective treatment,” he suggests.
Gagnon agrees employers can use a third-party consultant company like Artemtetrx, which uses data analytics to evaluate claims data and identify high drug spend and opportunities for cost management across clinical management, reimbursement management, site of care management and plan design.
When an employer client raises a question about a high-dollar claim, Zucarelli says the plan’s PBM or carrier could also be asked to do a case review and insure the patient is taking the high-cost drug for an appropriate use.
“Unfortunately, once an employee is on a certain drug, it’s hard to get them off of it or switch it,” he says, adding that that’s why he suggests employers get a lot of these tactics in place now, before the use of the drugs increases, which is inevitable.
“Getting these management techniques in place now is going to further minimize disruption,” he adds.
3 Takeaways From the Medicare Trustees Report
Originally posted at 9:41 am EST, August 1, 2014 by Drew Altman on https://blogs.wsj.com.
The annual report from the Social Security and Medicare trustees predicted that Medicare will be solvent until 2030, four years later than the trustees predicted last year. That’s thanks to the recent slowdown in Medicare spending and a stronger economy that yields higher revenue through payroll tax contributions to the Medicare trust fund.
The administration and congressional Democrats are taking credit for elements of the Affordable Care Act that have helped to slow the growth in Medicare spending, and they warn against changes to Medicare that they fear would shift costs to seniors and undermine the program.
Republicans, however, see little good in the trustees’ report. “Don’t be fooled by the news that Medicare has a few more years of solvency,” Rep. Kevin Brady, chairman of the House Ways and Means subcommittee on health, said in a statement. More fundamental changes to Medicare are needed, many Republicans argue, such as transforming the program to a premium-support or voucher model.
Here are three points that might have been lost in the back and forth over the report by those on the left and the right:
* Contrary to conventional wisdom, Medicare appears to be outperforming the private sector. Medicare spending per capita rose at a 6.1% annual clip between 2000 and 2012 vs. a 6.5% growth rate for private health insurance. And Medicare spending is projected to rise at a 4% per capita rate between 2013 and 2022 vs. 4.9% for private insurance. (The bad news is that GDP per capita is projected to rise more slowly, at 3.7% per year.) Medicare’s problem is less poor performance and more the challenge of meeting the needs of an aging society and seniors who have modest incomes to pay for their health care.
* The ACA is projected to cut $716 billion in expected increases to providers and insurers between 2013 and 2022. Despite claims that cutting payments to providers and private plans could make the sky fall, there is no evidence so far that the industry or beneficiaries have been adversely affected by the reductions. In fact, enrollment has been growing in the private Medicare Advantage plans, which were hit by the most severe and controversial reductions, and the gains are projected to continue. So far, complex schemes to reform the way Medicare pays doctors and hospitals, which many believe hold promise, have produced mixed results in the effort to cut costs. But as $716 billion in Medicare savings demonstrates, the tried-and-true way to save money continues to be shaving a little off payment increases each year, as long as the health-care industry is still in the black and can absorb it.
* Perhaps the best news from the 2014 trustees report is that the country has a bit more time to hope for a more functional Congress that can figure out how best to finance Medicare for an aging population. It is almost impossible to envision the current Congress and administration working together on these long-term challenges.
With liberals and conservatives at odds over Medicare’s future direction and seniors such a strong voting group, it will be difficult to shift Medicare quickly in any direction. But there is good news for now in the trustees report.
Millennials under insured compared to other age groups
“A lot has been made of the so-called ‘young invincibles’ who are choosing to forgo health insurance,” said Laura Adams, senior analyst, insuranceQuotes.com. “This could be a costly mistake, especially because this group has easy access to health insurance. Young people typically pay much lower prices to obtain coverage via the health insurance exchanges and can receive subsidies depending on their income. Plus, they can stay on their parents’ health insurance policies until age 26.”
Millennials also are less likely than other age groups to own health, auto, life, homeowner’s, renter’s and disability insurance, according to the report. Some of the disparity can be attributed to living with their parents or having fewer assets to protect, insuranceQuotes.com said, but millennials appear to be under insured across all insurance lines.
“Fewer Gen Yers are buying houses and more are living at home with their parents,” said Kile Lewis, co-CEO and co-founder of oXYGen Financial, a financial planning firm serving generations X and Y. “But only 12 percent of 18- to 29-year-olds have renters insurance despite the fact that almost four out of five adults under 25 live on their own, and two-thirds of adults ages 25 to 29, rent their homes, according to a report from the Joint Center for Housing Studies of Harvard University.”
Highlights from the report:
- 95 percent of millennials said their overall financial security is very or somewhat important, almost the same number as consumers aged 30 to 64.
- 12 percent of millennials have renter’s insurance.
- 64 percent of millennials lack life insurance. The most common objection is that it costs too much.
- 36 percent of millennials do not have auto insurance, which could be attributed to declining numbers of young adult drivers.
- 10 percent of millennials have homeowners insurance, compared to half of consumers ages 30 to 49, and 75 percent of those 65 and older.
- 13 percent of millennials have disability insurance, compared with 37 percent of those 30 to 49.
“Despite all of this evidence that millennials do not have a lot of insurance, most millennials are confident they are prepared for the financial consequences of car accidents, having their belongings stolen, incurring substantial medical bills or becoming disabled,” InsuranceQuotes said. “Sixty percent of 18-29 year-olds are either very or somewhat confident that they are prepared for those risks; older adults are equally confident in their own preparations.”
The survey was conducted by Princeton Survey Research Associates International, and findings are based on responses from 1,003 adults in the continental United States. Statistical results were weighted to correct known demographic discrepancies; the margin of sampling error for the complete set of weighted data is plus or minus 3.5 percentage points,
Are pharmacy discount cards still relevant?
Originally posted August 15, 2014 by Michael Giardina on https://ebn.benefitnews.com
Providers of prescription drug discount cards are increasing their efforts to reach out to employers, even as the Affordable Care Act is expected to decrease the ranks of those most likely to use the cards – those without health insurance.
The FamilyWize Community Service Partnership, which seeks to reduce the cost of prescription medicine for children, families and individuals by $1 billion by the end of 2015, is one provider looking to educate more employers about its discount card program.
“One of the areas we have really focused is with employers with lower waged workers because many of them do not work full-time, or they may not opt for the plan the company is providing because of costs,” says Lori Overstreet, vice president of marketing for FamilyWize. “Obviously, if they were part-time, then the company wouldn’t need to cover them, but this would give them a benefit, or if they opt out of the company plan this will also give them a benefit because the card is free to the consumer and free to the company.”
FamilyWize works with Envision Pharmaceutical Services, a pharmacy benefit management company, to negotiate prices at more than 60,000 brand name pharmacies such as Walmart, Kmart, CVS and Target. These negotiated prices are realized when FamilyWize discount drug card are used by consumers.
“The price depends obviously on the chain, the prescription itself, and even where they are,” says Steve Tremitiere, vice president of strategic partnerships at FamilyWize. He adds that most of the discounts appear with generics, but some can be for brand name drugs.
FamilyWize recently cemented 10-year national partnership with United Way Worldwide in an effort to address needs for the uninsured and underinsured. The average savings for FamilyWize discount card holders is 40% and can reach up to 75%, Tremitiere says.
Tremitiere, wants to be clear that all types of employees and employers can use the benefit, which easily be registered for online and printed out directly from a user’s home or work computer. “Employers are a good conduit because they are a trusted resource,” Tremitiere explains.
But not everyone agrees that these types of prescription drug discount cards still offer value in the post-ACA world.
“With the advent now of the Affordable Care Act and what’s involved, you probably have fewer and fewer people that would need it [prescription discount cards] because they can probably get the negotiated discount off their prescription drugs through their employers or exchanges,” says Michael J Staab, president and co-founder of Innovative Rx Strategies, a pharmacy consulting firm.
Gregory I. Madsen, a registered pharmacist and principal and co-CEO of Innovative Rx Strategies, adds that these discount cards are for “people who don’t have prescription drug coverage, which is very few people anymore.”
A virtual game changer of the prescription drug discount program was the introduction of Medicare Part D, also called the Medicare prescription drug benefit. The Medicare Prescription Drug Modernization Act was first signed into law by President George W. Bush in December 2003, and was seen as a safety net for seniors who were paying out-of-pocket for their prescription drugs.
“They were the cash-paying customer, they were the cash cows of the pharmacy world,” says Madsen. “They were paying cash for all their stuff and these cards were really targeting those people. And then Medicare Part-D came in and they got in under contracted rates and the cash-paying customer sort of went away, except for this small group of part-time employees that were employed.”
Even though the number of uninsured is shrinking because of the ACA, small employers may find value in discount prescription drug cards.
“If they [these employers] have less than 50 employees, they [employees] are part-time, this card will still be a better deal than them paying cash,” Madsen explains.
Other examples of prescription drug discount cards or prescription discount programs, in general, are surviving the ACA’s implementation. For instance, the National Association of Counties, the only national organization that represents county governments on Capitol Hill, offers the NACo Prescription Discount Card Program. The free program, operated by CVS Caremark, has been in place since 2005.
Andrew Goldschmidt, NACo director of membership marketing, says that the program is one of the “oldest and most mature” offered by the association, which dates back to administration of President Franklin Delano Roosevelt.
“You have a lot of folks that have a lot of prescriptions that are off formulary, depending on what kind of plan they have, or if they even have a plan,” says Goldschmidt. The NACo prescription discount card program has saved $570 million on 45 million prescriptions for employees in over 1,400 counties.
“The prescription drug program [usage] has gone down a bit, and rightly so if people are getting coverage through the ACA that didn’t have it before,” explains Goldschmidt, while noting that now it can be used as a good complementary program for employers.
Jackie Chin, executive vice president of New York State Restaurant Services, a division that handles all insurance programs for the New York State Restaurant Association, says the ACA “should not slow down registration” for its WellCard program. In addition to its prescription discounts, its WellCard offers discounts on dental, medical and vision coverage for uncovered employees and their families.
“Since there is no cost to participate in this discount card program, an employee can still register with WellCard because with regular health insurance through ACA or public health exchanges, your co-pays for prescription may be more expensive,” Chin explains. The New York State Restaurant Association includes a diverse group of approximately 10,000 members that range from small mom-and-pop restaurant owners to large restaurant groups.
“It differs from other prescription drug discount card because there is no membership fee and there is no cost to the employee and the employee's family member to avail themselves of any savings they can receive by using this discount card,” Chin says.
Why do companies bother with wellness programs?
Originally posted August 6, 2014 by Dan Cook on https://www.benefitspro.com
Communicating about the company wellness program is directly correlated to significant cost savings associated with those programs, a survey from Buck Consultants of Xerox found.
Another striking finding: U.S. employers said their primary motivation for offering wellness plans was to cut health care costs; respondents from outside the U.S. said their No. 1 reason was to improve employee morale and to reduce sick days and presenteeism – the phenomenon described as workers being on the job but not able to perform at the expected level.
The survey “shows an evolution in employer thinking to a much more holistic and measurable approach,” said Dave Ratcliffe, principal, Buck Consultants at Xerox. “Workers' wellness is now viewed as a state of well-being across the spectrum of health, wealth and career. Wellness is part of the employee value proposition. Social media, gamification, mobile technology, automated coaching and personalized communication are all part of the mix."
The big-picture results offered yet more evidence that wellness programs are becoming a standard component of benefits package design around the globe. More than three-quarters of respondents said they “are strongly committed to creating a workplace culture of health, to boost individual engagement and organizational performance.” More than two-thirds of these employers told Buck wellness plans “are extremely or very important to attract and retain workers.”
Employers are taking wellness investments seriously, the survey showed. While in 2012, 36 percent said they measured wellness outcomes, in the latest survey, 52 percent were measuring the outcomes. To encourage participation, 52 percent of employers said they rely on a very simple tactic: offer reduced insurance premiums to those who participate.
And, as wellness programs continue to gain advocates, employers are committing marketing dollars to them, developing brands for their programs and communicating regularly with employees about their programs.
Buck said the finding about communicating regularly with employees about aspects of a wellness plan was a common theme among every U.S. company that reported “a lower health care cost trend of 6 or more percentage points.” These employers send out targeted email messages and often mail wellness news to their homes to underscore the company commitment to wellness. The number branding their wellness programs is rising: 43 percent of respondents internationally said they created a brand identity for their plans.
But employers still have work to do to achieve the participation numbers they'd like to see.
“Participation rates indicate that employers are still struggling to find effective approaches to motivate workers. And there is a significant gap between employers' stated desire to create a culture of health and their current progress in achieving this goal,” Buck said. Buck's sixth global wellness survey analyzed responses from more than 1,000 organizations in 37 countries.
Play or Pay in 2015 — so many requirements, so little time
Originally posted August 6, 2014 by Dorothy Summers on https://ebn.benefitnews.com
2015 is getting close and the Employer Shared Responsibility Mandate (“Play or Pay”) under the Affordable Care Act (ACA) is almost here. So what does this mean for your organization? Play or Pay requires certain employers to offer affordable and adequate health insurance to full-time employees and their dependents, or they may be liable for a penalty for any month coverage is not offered.
Play or Pay goes into effect in the calendar year of 2015 for large employers only. However, mid-size employers aren’t entirely off the hook. They’ll have to report on insurance coverage even though they won’t be liable for penalties in 2015. By January 1, 2015, businesses with 100 or more full-time or full-time-equivalent employees must ensure they are offering health benefits to all of those working an average of 30 hours per week, or 130 hours per month. If an employer has a non-calendar year plan and can meet certain transitional rules, they can delay offering employee health benefits until the start date of their non-calendar year plan in 2015. Mid-sized employers will have to comply beginning in 2016.
Here are important questions that employers need to answer today:
- Do you know which category your business fits into?
- How do you classify who is a full-time employee?
- What do you need to do to comply with Play or Pay requirements?
Let’s take an in-depth look at each of these questions.
Which category do you fit into?
Whether you are a small, mid-sized, or large employer is determined by the number of full-time and full-time equivalent employees (FTEs). It sounds simple on the surface:
- Small employers have 1-49 full-time or FTE employees
- Mid-sized employers have 50-99 full-time or FTE employees
- Large employers have 100+ full-time or FTE employees
However, it’s important to remember that these numbers can be affected by several factors, including whether the employer is a part of a control group, seasonal employees and variable-hour employees. That brings us to our next question:
Who is a full-time employee?
The law defines a “full-time employee” for penalty purposes as an employee who, for any month, works an average of at least 30 hours per week, or 130 hours. This includes any of the following paid hours: vacation, holiday, sick time, paid layoff, jury duty, military duty and paid leave of absence under the Family and Medical Leave Act.
Employees who aren’t considered full-time include non W-2 leased workers, sole proprietors, partners in partnerships, real estate agents, and direct sellers.
Variable-hour employees—those who don’t work a set amount of hours each week—fall into a gray area. That is, they don’t need to be counted as full-time employees until and unless it becomes an established practice for them to work more than 30 hours per week.
To assist employers in determining whether variable hour workers will meet the definition of full-time employees (and therefore need to be offered health insurance), employers may use various “look back” and “look forward” periods. Here is a summary of terms used for measuring variable-hour employees:
- Measurement Period: A period from three to 12 months in which the employer would track hours to determine whether the employee worked an average of more than 30 hours per week.
- Stability Period: A period from six to 12 consecutive months in which the employer must provide health insurance coverage to employees who worked more than 30 hours per week in the Measurement Period. Note: must be at least six months and cannot be shorter than the Measurement Period.
- Administrative Period: A period not to exceed 90 days, which falls between the Measurement Period and Stability Period, and/or a short period after a new employee’s date of hire. Using this waiting period allows employers to analyze eligibility of full-time employees and provide enrollment information to enroll them in a plan before penalties could be assessed.
Does your plan meet the Play or Pay requirements?
To avoid penalties, you’ll need to make sure your plan meets certain requirements. First, coverage must be offered to full-time employees and their dependents. Under the ACA, dependents are defined as children under age 26. Spouses are not considered dependents.
3 questions to ask before moving to a private exchange
Originally posted July 24, 2014 by Andrew Bloom on https://ebn.benefitnews.com
As employers grapple with how best to deliver health insurance to their employees, the concept of private insurance exchange or marketplace is quickly gaining traction. In a private exchange model, rather than continuing to assume the responsibility for making healthcare decisions for plan participants (or managing the risk on their behalf), an employer transfers responsibility to employees. This transfer of power enables employees to make important decisions on behalf of their families. Employers have something to gain, too: predictable healthcare costs.
But there is more involved here than simply choosing a private insurance exchange over a traditional benefits delivery model. This is not a simple switch you flip. In fact, the move to a private exchange could be difficult for employees who generally are not accustomed to making benefits plan decisions for themselves, or who balk at the potential of an increased out-of-pocket burden. It’s incumbent upon employers to guide them through the transition to help them accept the idea that having more power and choice is a good trade-off to taking on more risk. To do this, the employer must introduce a defined contribution approach to the workforce and embrace concepts like premium transparency, fixed dollar contributions and multiple plan options.
When done properly, a private exchange will help you achieve the three C’s of benefits: consumerism, compliance and cost-containment.
In short, there’s a tremendous upside toward embracing this strategy, which is a reason why most employers are investigating the option of private exchanges. For virtually every organization, it is not a matter of “if” joining a private exchange is right; it is a matter of “when.”
The key to answering “when” a private insurance exchange is right for your organization starts with understanding where you are on the course. This will help you determine what tools and resources are necessary to help get you there.
Here are three simple questions to consider:
1. How do your employees enroll in benefits today?
2. Do you have a health/wellness and cost management strategy in place?
3. How active are your employees in your current benefits decision-making process?
Depending on the answers to these questions, you may need to:
- Alter your benefits philosophy and design benefits plans and programs to help you move further down the path on the engagement spectrum.
- Design an aggressive wellness and health management strategy. While a private exchange may provide short-term cost savings, it is not a silver bullet. You must continue to drive better behaviors to control costs associated with your program over the long term.
- Execute an ongoing communication strategy that educates employees to become smarter consumers of benefits and better prepared to accept the responsibility and risks associated with making healthcare decisions.
- Implement benefits administration technology that will allow you the flexibility of managing your current program as well as a private exchange, thus affording you the flexibility of a smooth transition.
- Leverage an experienced third party, regardless of implementing a private exchange, to manage the administrative complexities and ever-changing regulatory requirements surrounding your benefits program. This is critical to eliminating costly mistakes and ensuring regulatory compliance.
Before pushing off from the starting line, consider if your organization and employees are ready for such a significant shift in benefits delivery. Keep in mind that preparation for a private exchange is a bit like running a relay. Before the starting shot is fired, everyone in your organization must fully trained to make it around the track.
Employers have an opportunity to transform the delivery, management and overall outcome of their health and welfare programs for the better. A private insurance exchange will be a critical component of your benefits program, but only after you determine your readiness and strategy before taking the first step.
Open enrollment checklist for employers
Originally posted July 23, 2014 by Alan Goforth on https://www.benefitspro.com
Wrestling with the implications of the Patient Protection and Affordable Care Act could make the upcoming open enrollment period one of the most challenging in memory. Mercer, a human resources and benefits company in New York City, encourages companies to approach the fall season with a plan.
Mercer’s proposed checklist includes:
- Consider offering a consumer-driven health plan. The momentum behind this type of plan continues to grow, with 39 percent of large of large employers offering one last year and 64 percent expected to do so within two years.
- Communicate early and often to the newly eligible. Mercer’s research indicates that one-third of employers still need to make changes to comply with the requirement to extend coverage to all employees working 30 or more hours per week. Start communicating right away with newly eligible employees about who is eligible, why they are eligible, how eligibility was determined, what this means and what they have to now consider. Information should also be delivered to those who still remain ineligible and the options these employees may have in the public exchange arena.
- Make voluntary benefits a big part of the message. Voluntary benefits can deliver significant value to employees and are an important element of a thoughtfully designed benefits program. They can also be used to overcome misperceptions and confusion around other benefit offerings. These offerings also can assist employees who remain ineligible for the employer-sponsored medical plan.
- Use open enrollment as an opportunity to reinforce wellness campaigns. This is particularly important if any perceived compliance penalties are going to be introduced next year, such as increased premiums for those who do not participate in health screenings.
- Deploy decision support and mobile technology to support the accountability theme. Participants are being asked like never before to take accountability for their health benefit decisions and cost outlays. For example, some employers are providing digital “wallet cards” for smart phones and other devices that contain benefit information and contacts needed at the point of service or anywhere else a participant needs this information and/or advice.