Christopher Cannon, NASTAD U.S. Virgin Islands ADAP and Georgia ADAP

April 3, 2014

PBMs: From RFP To Implementation

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Presentation Agenda

• Introduction: What is a PBM?

• U.S. Virgin Islands ADAP: Step-by-Step PBM Selection and Implementation

• Georgia ADAP: Lessons Learned

• Resources

• Question and Answers

• Evaluation

What is a PBM?

What is a PBM?

A PBM or pharmacy benefits manager is an organization or system that provides administrative and pharmacy claim adjudication services, pharmacy benefit coverage programs, and drug utilization functions. Some may also have arrangements with mail-order pharmacies.

PBMs do not adjudicate insurance claims; pay insurance premiums, deductibles, or co-payments; adjudicate medical claims; or pay medical co-payments.

What is a PBM?

79% of ADAPs have a contract with a PBM. Benefits of PBM Contract:

– created a statewide pharmacy network and claims adjudication system

– better facilitation of TrOOP with CMS – facilitation of client-level data reporting to HRSA – increased ability to collect rebates and back-bill – increased eligibility and re-certification screening

efficiency – reduced dispensing and distribution costs – increased medication inventory control – provided adherence counseling services and

monitoring of clients.

What is a PBM?

Challenges of PBM Contract:

– software training and integration with established data systems is difficult

– corporate culture versus public health priorities

– customer service needs versus response times.

Step-by-Step PBM Selection and Implementation

Pharmacy Benefit Manager (PBM):

From RFP to Implementation

Presented by: Virgin Islands Ryan White Part B/ADAP Program

Presenters:

Gary A. Smith, Project Director

Dianne Henry-Malone, ADAP/Data Coordinator

Why hire a PBM?

Assist with contract and compliance monitoring of ADAP

providers;

Develop, implement and maintain an online claims processing

database that will track and approve medication dispensing claims;

Create and submit monthly invoices on behalf of the ADAP

pharmacies with preapproved ADAP allowable claims;

Produce bi-weekly client-level data regarding number of clients that

picked-up their medications on time. This information will be

shared with case managers to contract clients to assist with

addressing any mitigating barriers;

Ensure accurate third-party billing occurs at each dispensing

transaction by rejecting medication dispensing claims submitted by

pharmacist for clients that have other insurance types;

Why Hire a PBM (continued)?

Assist the Program with preparing documentation to submit to

pharmaceutical companies to begin receiving rebates. The income

derived will support the administrative cost of the PBM, as well as

provide needed funds that will supplement reduced federal and

local funding;

Assist the program in making more accurate medication purchasing;

and

Assist with oversight of the ADAP formulary and mandated bi-

annual updates.

Request For Proposal (RFP) Process

Preparation of Scope of Services;

Comparison of V.I. Scope of Services with

other Ryan White program’s Scope of

Services;

Submission of Scope of Services to local

Property & Procurement Department

(P&P);

RFP submitted to local media as well as

online media.

RFP process (continued)

Review of proposals by P&P staff;

Ensure that all requirements of the RFP were

responded too as written and requested;

Interview & Evaluation process by P&P staff in

conjunction with Ryan White staff; and

Selection of PBM which best met our needs.

Implementation Process

PRE-IMPLEMENTATION MEETINGS

Discovery meeting held with PBM; and

Scheduled weekly implementation calls with PBM.

CONTRACT STATUS

Discuss contract strategy with PBM, i.e., who is point of contact, who will manage contract; and

Finalize and execute contract.

Implementation Process (continued)

ELIBILITY PROCESS

Discuss eligibility process, update frequency & type of file;

Determine method of transmission;

Determine ID number origin and additional requirements;

Perform first eligibility test file; and

Discuss test results with PBM.

Implementation Process (continued)

MEDICARE PART D DATA SHARING

Determined that PBM will assist with CMS file submission / data sharing;

PBM initiated contact with CMS to begin data exchange implementation;

PBM will send first test file to CMS; and

PBM will send first production file to CMS.

Implementation Process (continued)

FINANCE

Determine billing / finance point of

contact;

Determine billing frequency; and

PBM provided a sample of invoicing

reports and billing information.

Implementation Process (continued)

ID CARD PRODUCTION

Discussed ID card layout with PBM;

Determined mode of distribution and

timeline for delivery of cards;

Received ID card and welcome letter

draft from PBM; and

Provide approval of ID card and welcome

letter.

Implementation Process (continued)

SYSTEM ACCESS

Provided staff names for access to PBM system; and

Implementation of set-up and training by PBM.

MEMBER SERVICE

Set-up services support needs, i.e., business hours, after-hours, weekends, holidays; and

Implemented dedicated PBM toll free number for pharmacy services.

Implementation Process (continued)

PHARMACY NETWORK

PBM executed contracts and set-up with pharmacies.

REPORTING

Provided PBM with reporting needs and frequency of plan performance reviews.

Implementation Process (continued)

REBATE ADMINISTRATION

Discussed rebate needs and the need for

recoupment services.

Challenges of PBM process

Bureaucracy of the V.I. local government

processes; and

Resistance of pharmacies to the new

process.

Outcomes of PBM process

Initial savings of 25% on dispensing fees;

Accuracy of dispensing fees billing is now

electronic vs. manual verification;

Eligibility verification is performed

electronically;

The electronic monthly reports are now

assisting with inventory reconciliation; and

Various reporting requirements are now

available electronically.

Lesson Learned

Presentation to:

Presented by:

Date:

PBM Webinar

Pharmacy Benefit Manager

Experience--

The overall goal of putting out an RFP for new a PBM

was to expand services for ADAP clients and provide a

more modernized and efficient system.

Assess the needs and services required for your program

(e.g. online adjudication, pharmacy network, COB,

electronic reporting, formulary maintenance, eligibility,

electronic applications, etc.)

Pharmacy Benefit Manager

Services--

Programmatically, the GA ADAP was seeking to implement a more modernized and efficient system for an electronic eligibility assessment process; electronic ADAP application and recertification process; Clients’ Medicaid status confirmation; Coordination of benefits assessment for Medicare, Medicare Part D and other insurance companies; and a tracking and reporting system for coordination of benefits services. The ADAP was also seeking a faster and more efficient process for paying health insurance premiums.

Request for Proposal (RFP)

Process--

Identified deliverables as to what the PBM will do is identified.

Submission of a Contract Action Request is completed. This form is the initial form that is needed to start the process.

Procurement meets with the Business Owner , ADAP Manager and Pharmacy Director to discuss the next steps and develop a timeline with the RFP process (project plan). A committee is formed to review and score the proposals once the posting closes (can be persons in the department who have knowledge).

Request for Proposal (RFP)

Process-- The RFP for the Pharmacy Benefit Manager (PBM) is posted to

the Department of Administrative Services (DOAS) for a minimum of 10 days and a maximum of 30 days.

Vendors interested in the bid submits their proposals by the date set. Proposals sent after the closing of the bid will NOT be accepted under any circumstances.

Any questions that the vendors have are to be directed to the Procurement specialist only!

All vendors must meet the requirements through a series of questions. The category for the questions are (a) mandatory, (b) mandatory scored, and (c) additionally scored.

The committee meets to score all vendors deemed eligible.

Request for Proposal (RFP)

Process-- If the vendor does not meet the criteria for the

mandatory requirements, they are automatically disqualified from the bid.

Once all qualified vendors have been scored one is selected to fulfill the requirement of the PBM.

Public Notice of the contract identifying the successful bidder is posted.

The selected vendor finalizes the contract agreement by a agreeing to all terms.

The funding period each is April 1 to March 31. The contract also has four (4) renewals AFTER the initial contract.

Pharmacy Benefit Manager

Transition--

• The transition included 3-4 months of data testing

and transference for both the pharmacy component

and enrollment/eligibility component in preparation

for full implementation effective April 1, 2013.

• In addition to data testing, there were numerous

technical conference calls held in preparation for

implementation.

• An enrollment site within the local metro area was

selected as a pilot site for the initial implementation.

Pharmacy Benefit Manager

Challenges--

Providing a seamless electronic eligibility and

enrollment process during the initial

implementation stages.

Pharmacy Benefit Manager

Lessons Learned--

Confirm with winning bidder their understanding of contract language

Assess the specific needs and services required for your program (e.g.. Pharmacy services, Program services)

Design technical evaluation, mandatories and scope of work to allow you to differentiate/score each vendor

Request “real-time” access to the PBM in order to monitor services at anytime

Be specific in the Scope of Work regarding methodology, timelines, implementation and execution.

Work closely with legal team to assure strong language and tangible consequences for non-compliance with deliverables

Double check/perform QM audits on reports, data deliverables of the PBM services to assure compliance

Resources

Resources

National Alliance of State & Territorial AIDS Directors (NASTAD), www.NASTAD.org – Christopher Cannon, ccannon@NASTAD.org

– Fact Sheet: PBM and IBMs – Webinar: Insurance and PBM utilization – Fact Sheet: ADAP Contracts with PBM – PBM Proposal Template – PBM Request for Proposal Example – PBM Contact List – PBM Contract Bank and Things to Consider Release of web based PBM toolkit in late April/early May.

Question & Answers

Thank You. Evaluation will follow the conclusion of the

webinar