CVS Health’s plan to purchase giant insurer Aetna is causing health plan executives to question how this will impact their bottom lines and market competitiveness. Now is the optimal time for health plans to re-evaluate their PBM contracts to take advantage of emerging pricing opportunities and negotiate new terms if needed.
The proposed CVS-Aetna merger is the latest in a series of industry disruptors, and there may be more to follow soon. While these disruptors can be unsettling, they can also benefit health plans – if health plans know how to use the disruption to their advantage.
The Burchfield Group compiled a list of 12 steps that health plans should consider with their PBMs now to take advantage of emerging pricing opportunities and protect themselves from potential emerging threats:
1) Make sure your contract specifies what the PBM will do to ensure that the appropriate firewalls are in place and the recourse or penalties permitted should these fail.
2) Make sure your contract gives you the right to conduct an independent third- party audit of the PBM’s claims processing system and data warehouse (and/or access to independent audit reports of the PBM) to identify potential weaknesses that could lead to issues.
3) Make sure your compliance and IT departments review, and are comfortable with, audit findings and contract provisions related to information firewalls and the security of your information.
4) Re-evaluate, and reassign if necessary, which entity is responsible for which delegated functions or services – e.g., call centers, Medication Therapy Management (MTM), prior authorization – to avoid potential conflicts of interest.
5) Know your contract termination rights. Understand your options if you are not satisfied.Now that you know what to look for, you are in a stronger position to take advantage of any emerging pricing that works to your advantage, and what steps to take to protect yourself from possible emerging threats.
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