Your Insurance Carrier is Switching PBMs, Now What?

PBM Transition

Top 3 Things You’ll Learn

  1. What to expect when an insurance carrier changes PBMs
  2. What options employers have when their carrier changes pharmacy benefits partners
  3. How employers can take back control when they don’t want to transition PBMs with their insurance carrier

Employers aren’t the only ones going out to bid with pharmacy benefit managers (PBMs); health insurance carriers often do the same to weigh their options. If a carrier decides to make changes to their PBM arrangement, the consequences can be far-reaching—affecting their entire client base. Employers who are in a carved-in pharmacy arrangement with a carrier that’s making a PBM switch may feel left in the dark and unsure of what to expect when this occurs. Don’t let your clients to get lost in the commotion. These tips can help them prepare for – and capitalize on – the transition.

The Reality of a Carrier-PBM Transition

In any PBM transition, employers will experience an adjustment period as the two entities work to build the new pharmacy benefit structure. While the carrier and new PBM work out the kinks, employers expect a seamless benefits experience so that members are not disrupted by the transition. However, while the carrier and PBM will try to minimize disruption and premium increases for their clients and members, this is not a guarantee.

Employers in a carved-in arrangement will see changes to pharmacy networks, drug formularies, specialty and mail order pharmacy dispensing requirements, member websites, and member communications – because they will reflect what the new PBM provides. Additionally, any changes to the pharmacy benefits plan design and clinical programs are decided on by the carrier and passed along to all clients. Ultimately, the carrier is the decision maker over the terms of the arrangement and decisions made must consider the entire clientele, not each individual employer and their specific needs or preferences.

Members will feel the impact of these changes, as customer service numbers and experiences change, and sensitive processes like prior authorizations change to reflect the new PBM’s standard utilization management guidelines. Members will need proper notice in advance and will expect top-notch support to address any issues or concerns.

Does this sound familiar? It’s eerily reflective of the steps (and expectations) involved when an employer selects a new pharmacy benefits partner. Only in this case, the employer did not choose for this to occur. It’s being forced upon them, and there is no guarantee the new arrangement will be in their best interest.

When the insurance carrier announces they’re switching pharmacy benefits providers, what they don’t say is that the transition will negatively impact their clients in a bundled medical-pharmacy benefits contract. Being proactive to make a change on your terms is the only way employers can ensure their Rx plan is serving their members well.

Make Lemonade from the Lemons

Rather than sit back and wait for this unwanted disruption to hit, and for the new program options to be dictated to them, employers have another option. Fully funded employers or self-funded employers in carved-in arrangements can act now to ensure their pharmacy benefits program is serving their plan and their members well. By self-funding and carving-out their pharmacy benefits, employers can flip the script and make a better change on their own terms. For some employers, having the power to choose what’s best for their company, their employees and dependents is a vital means to keeping their head above water.

With change and disruption inevitable, why not take the opportunity to negotiate a client-friendly contract for your clients and improve the value of their benefits plan in the process? Why not allow employers to select the plan design and clinical program options that will address their member population and their specific financial and healthcare goals? If you do, HR leaders will be able to rest easy when all is said and done. They’ll know that the change was worth it because they will have a benefits program they chose – one designed for their individual membership, not set for them based on the carrier’s book of business as a whole.

How to Evaluate Pharmacy Benefits Opportunities

To best understand the employer’s options and find out if carving-out makes sense for them, we recommend that you:

  Initiate a market check or pharmacy plan performance evaluation: This is the only way to know that a plan’s prescription drug rates and rebates are competitive, contract terms align to serve the best interest of the plan and its members vs. the carrier, and that the clinical management strategies are effective.

  Compare the alternatives: When contrasting the economics of the current pharmacy benefits arrangement to other options in the market, the evaluation must provide a real apples-to-apples comparison. A trusted partner, independent from the PBMs, is the ideal option to help evaluate the true value of any pharmacy arrangement.

  Make changes (if warranted): With the data in hand, you’ll be able to help your clients choose a partner that provides pharmacy-specific expertise, client-friendly contracts and tailored, transparent clinical solutions.

As the industry’s first and only Pharmacy Benefits Optimizer (PBO), RxBenefits streamlines the pharmacy performance evaluation process to serve and protect self-funded employers’ interests more effectively. All we need is a pharmacy contract, if one exists, and a claim file to provide full visibility into the competitiveness of the plan’s rates and rebates, optics related to the contract terms, and clinical inefficiencies – all of which can lead to an underperforming pharmacy plan and an at-risk client.

Learn more about what’s at stake when employers remained carved-in by checking out our free Definitive Guide to Optimizing Pharmacy Benefits.

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