Managed Care Pharmacy 101
The information on this pages gives a broad overview of what managed care pharmacy is and the tools we use. Other resources that may be useful are our "What is Managed Care Pharmacy?" webinar and Managed Care Glossary.
Managed Care Pharmacy
Managed Care Pharmacy uses a number of best practices that offer quality care and cost-effective coverage to patients, payers, employers, and government.
- Pharmacists are Medication Experts
- Electronic Prior Authorization
- Step Therapy
- Medication Therapy Management
- Mail Service Pharmacy
In the health insurance marketplace, the payers (commercial market and government) usually have three major concerns:
- Providing a meaningful benefit package
- Moderating the amount of individual's out-of-pocket costs
- Moderating the cost impact on the payer’s bottom line
When the payer shops for a benefit package that meets its criteria, it seeks a health plan to provide cost- effective health benefits.
Managed care pharmacy has developed a variety of managed care pharmacy strategies utilized by commercial health plans and government-managed programs like Medicaid and Medicare that are used to moderate costs while providing a safe, clinically effective, and valuable prescription drug benefit. The payer selects those strategies that best fit their employee needs and business operations.
Formulary Development by Pharmacy & Therapeutics (P&T) Committees | Drug Utilization Review (DUR)
- Pharmacists complete four years of graduate coursework resulting in a Doctor of Pharmacy degree (PharmD), with the greatest concentration in pharmaceutical education as compared with doctors and all other health care professionals.
- In addition, many pharmacists seek further training and specialization through residencies and fellowships.
- Pharmacists are life-long learners who pursue continuing education to maintain their license and stay current on changes in pharmaceutical science, health policy, and research.
- Managed care pharmacists are responsible for the development and use of a broad and diversified range of clinical and quality-oriented drug management services.
- Managed care pharmacists are also involved in management of population health and provide patient-centered care as an integral and valuable member of the health care team.
Managed care pharmacists play many roles:
- Ensure patient safety
- Conduct drug utilization review (DUR)
- Serve on pharmacy and therapeutics (P&T) committees
- Design and run Medication Therapy Management (MTM) programs
- Develop quality assurance programs
- Create programs to detect fraud, waste, and abuse of medications
- Design drug benefit plans
- Help clients evaluate and improve their pharmacy benefit
Formulary Development by Pharmacy & Therapeutics (P&T) Committees
P&T committees continually develop, manage, and update formularies as new medications and new information becomes available. These committees are made up of physicians, pharmacists, and nurses
P&T committees review . . .
• Medication formularies to promote safety, effectiveness, and affordability
• Therapeutic classes to update and implement best practices
• Peer-reviewed literature and clinical trials
Health care professionals — including prescribers and pharmacists — collaborate to increase access to safe, cost-effective and evidence-based medication therapy.
Pharmaceutical innovation now focuses increasingly on high-cost specialty and biologics, making formulary management more important than ever.
Formulary systems use P&T Committees to evaluate clinical and medical literature when selecting the preferred medications for different diseases and conditions that best serve a plan’s patient population.
The P&T committees assign medications into a “drug tier” by utilizing clinical and cost information.
Medications are assigned to tiers based on medication usage, cost, and, most importantly, effectiveness. Tier 1 drugs are the most accessible to patients in terms of usage and lower out- of-pocket costs. The higher tiers will have different copay responsibilities due to the higher cost of the medications. Some states have enacted laws that require a drug to be on a certain tier.
The cost of the drug is determined by the manufacturer and the distributor, not the health plan, payer, pharmacy benefit management (PBM) plan, or the employer.
Drug Utilization Review (DUR)
A comprehensive review of a patient’s prescription and medical information in order to ensure patient safety and evaluate cost-saving opportunities related to medication.
Medical and medication therapy information is evaluated prior to dispensing a patient’s new medication for:
- Drug-drug and drug-disease interactions
- Dosing appropriateness
- Medication allergies
- Clarity and completeness of directions
This type of review allows the pharmacist to identify and resolve problems before the patient has received the medication.
- The patient’s therapy is evaluated during the treatment process for:
- Over or underutilization of medication
- Excessive or insufficient dosing
- Drug-drug interactions
This type of review allows therapy for a patient to be altered if necessary.
Previously administered medications are evaluated to reveal trends in prescribing, administering, and dispensing of medications, including:
- Appropriate use of generic medications
- Patterns of inappropriate use of medications
- Medication use that is inconsistent with evidence-based guidelines
Output from this type of review may aid prescribers in improving the care of their patients, either individually or as part of a patient population.
This asthma is really slowing me down. This prescription isn't helping much.
Tim’s asthma is not well controlled, and he uses his inhaler multiple times a day. Tim’s therapy should most likely be modified to prevent further medical complications.
A pharmacist conducted a concurrent DUR at the health plan and noticed that Tim was only prescribed an as-needed inhaler. With the pharmacist’s recommendation to the prescriber, derived from evidence-based guidelines, Tim was prescribed a maintenance asthma medication.
The DUR lead to recommendations to optimize Tim's care for better asthma control. Although another medication was added, the patient and the health plan have an overall cost savings. The added prescription vastly decreases Tim’s likelihood of a costly emergency room visit for a severe asthma attack and enhances Tim’s quality of life.
Prior authorization (PA) is a process designed to ensure that the medications patients receive are safe, effective, and provide the greatest value. ePA is an automated PA process which provides real-time responses.
Managed care pharmacists take care to ensure that medication is used appropriately in their patient population. PAs require approval of certain medications to ensure appropriateness based on clinical evidence. This additional step guarantees that the prescription is medically necessary even when a clinically effective, less expensive option is available. The PA will be approved by the health plan if the patient’s condition meets the necessary requirements. The NCPDP SCRIPT standard-based ePA reduces health care costs, improves patient and prescriber experience and provides real-time responses.
The use of a proven, clinically effective prescription prior to trying a medication with less evidence of clinical effectiveness or higher cost. The majority of prescriptions are not subject to step therapy programs.
Managed care pharmacists determine if a medication is preferred based on effectiveness, safety, and cost. Step therapy requires the use of a preferred medication prior to beginning another medication for the same condition or in the same therapeutic class. This may require use of a medication different from what was originally prescribed. After talking to the prescriber, the patient always has the option to pay for the original medication prescribed without using the prescription benefit. Also, the prescriber can provide additional information about the patient’s medical history which may result in the original prescription being approved.
Is there a clinically effective and more affordable medication than the one that my doctor prescribed?
Mindy has a prescription for a medication that is new on the market. The pharmacist explains that her insurance requires her to try a different medication first because it is as effective and will cost her less.
The prescriber and pharmacist discuss the patient’s options. The pharmacist informs the prescriber that if Mindy decides to take the preferred medication and experiences side effects or if the medication is ineffective for her, the insurance may cover the originally prescribed medication after the prescriber provides additional information to the insurance company concerning the patient’s medical history.
The health plan’s preferred medication worked as intended for Mindy. The medication achieved an identical medical outcome for less than half the cost of the originally prescribed medication
Services that identify and address medication-related problems and medication mismanagement, and help the patient understand proper medication usage. Certain patients enrolled in Medicare Part D and employer-sponsored benefit plans receive this service.
MTM benefits patients who…
- Use several medications for multiple health conditions
- Take medications that require careful monitoring
- Change from one health care setting to another, such as from the hospital to the home or from the home to a long-term care facility
- Receive medications from multiple pharmacies
Go over ALL my medications and labs to make my treatment better?...YES, PLEASE!!!
George has multiple medical conditions and wants to take his health care seriously. He remembers the pharmacist telling him that he may benefit from his plan’s MTM consult program, so he calls and sets up an appointment.
The pharmacist learns that George hasn’t been taking his diabetes medication for three months. George assumed he didn’t need it because the physician didn’t give him a new prescription at his last visit. The consult identified gaps in care, the pharmacist consulted with the physician, and George began taking his medications again.
Because George continued his medication, the pharmacist potentially prevented George from visiting the emergency department or being hospitalized. MTM interventions such as this result in postive health outcomes for patients and can result in savings by reducing avoidable hospitalizations and other disease complications.
The option of receiving maintenance and medical supplies through the mail.
Chronic conditions often require long-term use of medications. Mail service pharmacies help ensure patients receive medications in a timely manner, to prevents gap between prescription refills. The ability of mail service pharmacies to purchase medications in large quantities may also allow these pharmacies to offer patients a lower drug cost, copay or both.
My medications will come right to my door and cost less?
Peter will likely be taking his new medications long term. He has trouble finding time to get to the pharmacy due to his job schedule and often picks up his prescriptions late.
At the pharmacy, the pharmacist explains to Peter that his insurance offers mail order.
Peter now receives his medications automatically every three months and no longer misses doses. Peter still uses his community pharmacy for other prescriptions and retail needs.
Using a mail service pharmacy, Peter now saves money on each copay and does not need to remember to make trips to the pharmacy. Most importantly, he is adherent and at a lower risk of complications.