1. Carve out your pharmacy benefit from your health plan. Health Plans are not set up to control the cost of prescription drugs. They don’t aggressively negotiate the cost of drugs or effective cost containment strategies. If the pharmacy costs are not separated they can’t be monitored or controlled.
2. Run an RFP for a separate pharmacy benefit contract. If you are not familiar with this, watch this video. A properly structured RFP with the right bidders can reduce your pharmacy spend significantly. Make sure that the proper audit rights are embedded in the contract.
3. Exercise your PBM Audit right. Once you have negotiated the right to audit the PBM, do it. A full audit of all your claims can turn up significant mis-pricing. Specialty pharmacy claims can run into the many thousands of dollars. A few mistakes here can really add up.
4. Switch from the Retiree Drug Subsidy (RDS) to the Employer Group Waive Plan (EGWP). Tax benefits of the RDS are going away. Apart from that, the EGWP provides a higher base subsidy and free catastrophic reinsurance. Watch this video to get more details.
5. Separate Plan for Early Retirees. Consider a separate plan for your non Medicare eligible retirees with a pharmacy savings guarantee attached. It is possible to cap your pharmacy cost for this particularly hard-to-insure group.
All these strategies combined can have a significant positive impact on your company’s healthcare costs. To review case studies of these types of strategies visit our website KTP.