Evaluating Vendors

Evaluating Vendors

To ensure that vendors understand how they are to be evaluated, set expectations early in your relationship.  Make sure to address the following key areas when comparing and contracting with vendors for selection.

Define medical and pharmacy benefit contract terms

Related financial implications of the benefit design should be spelled out to include at least the following elements:

  • Cost of the drug by the unit/dose size and by the source of dispensing (e.g. retail versus mail order).
  • Drug reimbursement to the pharmacy related to the cost of the drug itself, plus the cost of dispensing to the patient in accordance with state or federal requirements.
  • Approach to patient cost sharing that will offset the final employer cost of care required to treat the patient’s medical condition.
  • Excessive or uneven out-of-pocket costs for the patient which can create barriers to successful treatment and increase the total cost of care paid by the employer through the medical and pharmacy benefit. This situation results when tiers are created for specialty drug benefit coverage (co-pay, deductible or co-insurance) which causes high value drugs to then be unaffordable for the patient. It defeats the coverage goals intended by an employer because a non-integrated approach to drug benefit management results in larger medical management increases.

Determine how claims adjudication will be managed

This is for retail and drug distribution channels as well as compliance with contracted pricing, drug utilization management and patient safety oversight. Examples include:

  • Access and distribution channels – Medical and pharmacy networks in order to capture and manage all reimbursement claims for drugs regardless of medical or pharmacy benefit coverage.
  • Contract pricing compliance – Compliance should apply consistently and across all drug categories that are being managed by a health plan with or without a PBM. If drug coverage is carved out, effort will be required to optimize benefit design to allow for contract pricing compliance across both types of benefits.
  • Provider and patient management – Reporting and communication on case/care management efforts need to be timely and consistent in order to maximize outcomes for the employers’ health benefit spend. This includes assuring compliance to the drug regimen as well as oversight for patient safety.
  • DUR and REMS (FDA Risk Evaluation Management System) – This is required by the FDA for many specialty drugs through the manufacturer; for access to drugs from the manufacturer, special levels of reporting requirements around drug use may be done by the health plan or PBM as a result of their contract.
  • Formulary and rebate management – Based on actual drug dispensing and/or utilization by covered members in a plan through analysis of paid claims data. This can result in additional cost savings or rebate dollars for the employer, but must be included in the vendor contract terms.

Define case/care management coordination

Identify the role that each vendor will play in supporting the case/care management goals of your at-risk population to ensure effective coordination and achieve desired program outcomes. Roles for each of the following services should include:

  • PBM – Care management services with the patient to assure coordination of benefits with the health plan as well as communicating with other key stakeholders.
  • Health Plans – Case management services with the patient and coordination with other key stakeholders such as the treating physician, specialists, local pharmacist, home care nurse, family members, etc.
  • Specialty Pharmacy – Patient and provider management or services to assure optimal patient care outcomes with their prescription drug treatment plan under the medical and/or pharmacy benefit.

Determine provider compliance across various clinical settings

Integrate of medical and pharmacy data, where specialty drugs are being used as well as prescribed. Since coverage for many specialty drugs is sought through medical benefits, do not assume the pharmacy benefit coverage is the sole source for assuring patient compliance with drug therapies. Compliance measurements can be delivered by medical carriers through:

  • Physician profiling and network management where specialty drugs are being used or dispensed to assure patients are receiving their drugs to achieve optimal outcomes of care.
  • Tracking of performance and outcomes (i.e. patient care) for use of specialty drugs to assure pharmacy benefit plan administration as well as medical and pharmacy service providers who consistently bill for specialty drugs in manners which are not cost-effective.

Determine patient compliance activities

Care and case management coordination across both medical and pharmacy benefits should include:

  • Sharing of information which is critical to the patient in both the medical and pharmacy benefit coverage settings.
  • Program evidence of success or failure for the specialty vendor through identification of key metrics that can assure success at the macro or micro level of review as well as during an audit.
    • Quality improvement/continuous quality improvement (CQI) measures in the dispensing operations.
    • Quality improvement/CQI measures in the patient or clinical services operations.
    • Certification(s) or Recognition of Excellence in dispensing, clinical services or IT functions that support delivery of optimal patient care outcomes.