The Right Tools to Manage Medically Billed Drugs
Health plans have historically deployed cost-saving strategies to provide member access to the most cost-effective medications and to manage overall pharmacy drug spend, such as drug formularies and utilization management (UM). These and other clinical solutions yielded nearly $50 billion in savings in 2019 alone.
However, these tools have not been as rigorously applied to specialty drugs billed through the medical benefit due to staffing limitations, changes in clinical criteria for complex specialty drugs, and limited technology capabilities allowing for sophisticated UM, causing unnecessary waste.
According to the annual Express Scripts Drug Trend Report, nearly 50 percent of a plan’s total drug spend comes from specialty medications, and 35 percent of those are currently billed through the medical benefit. Medical drug spend is expected to continue to grow – a projected 33 percent increase in spend between 2018 and 2023.
Additionally, with the rise in costly gene therapies and provider-administered biosimilars, many health plans may be ill positioned to most effectively manage the upcoming pipeline of medically-billed drugs:
- FDA expects to approve 10-20 gene therapies per year by 2025, with prices ranging from $850K- $5M.
- 17 of the 23 approved biosimilars are provider-administered and typically managed on the medical benefit.
An integrated medical drug management solution is key in staying on top of plans’ medical drug spend.
A Comprehensive approach to medical drug management can:
Generate the most plan savings
Express Scripts’ Medical Drug Management program optimizes plan drug savings across pharmacy and medical benefits, delivering greater savings and creating administrative efficiencies for plans. We’ve delivered over $100 per member per year (PMPY) average savings for clients with commercial lines of business and $93 PMPY savings in Medicare lines of business through our comprehensive solution. Savings are driven through approaches like utilization management, site of care management, medical drug contracting and strategy, claims management, etc.
Protect plans from inappropriate payment on claims
Administrative challenges, like coding, billing and payment documentation, already cost health care organizations over $265 billion in annual waste. Some of these costs can be attributed to UM and claims management challenges, like improper dosing and payment on duplicate claims, which increases the risk of over-payment and over-utilization for plans and their members. In fact, we find that 20 percent of denied medical drug claims are outside of FDA dosing recommendations and more than half are duplicate claims.
By leveraging the connected capabilities of Medical Drug Management solutions, claims processing can capture often-overlooked savings opportunities:
- Managing across Prior Authorization (PA) and dosing — Ensure billing practices align with originally intended, approved use of the medication
- Claims prepayment review — Align and validate drug units and dosing for claims, driving medical policy compliance
- Claim edits — Enforce FDA guidelines around maximum dosing and off-label use for medical drugs managed outside of standard PA review
By taking advantage of these opportunities, and more efficient UM, plans have experienced a 75 percent decrease in claims that exceed the clinically-recommended dosage, with one client indicating their PA turnaround time dropped from 10 days to as little as 10 minutes once enrolled in the Medical Drug Management program.
There is $265 billion in annual waste, waiting to be claimed as additional value for the health care system and, more importantly, patients. Having tools in place to avoid claim duplication across the medical and pharmacy benefit is just one way to address this challenge.