Payer and Reimbursement Models Flashcards

A patient with rheumatoid arthritis receives a physician-administered intravenous biologic in a hospital outpatient clinic. The specialty pharmacy supplies the medication to the clinic. Under which benefit is this drug MOST likely to be reimbursed, and what is the common payment methodology used by Medicare for it?

Answer: Medical Benefit; based on Average Sales Price (ASP) plus a percentage.

Drugs administered by a healthcare professional in a clinical setting, such as a hospital outpatient department or a physician's office, are typically covered under the patient's medical benefit, not the pharmacy benefit. The standard reimbursement methodology used by Medicare Part B for these drugs is based on the Average Sales Price (ASP) plus a percentage add-on (currently 6%).

Which of the following best describes a value-based reimbursement model for a specialty medication?

Answer: The health plan's payment for a medication is partially dependent on the drug achieving specific, pre-defined clinical outcomes for the patient.

Value-based contracts, also known as outcomes-based contracts, link financial reimbursement to the actual performance and value a drug delivers to patients. Instead of a simple fee-for-service model, payers, manufacturers, and sometimes providers agree that payment will be tied to achieving specific clinical metrics, such as reduced hospitalizations, improved lab values, or better adherence rates.

A patient's commercial insurance plan utilizes a 'copay accumulator' program. The patient uses a manufacturer's copay card, which covers their $400 monthly cost for a specialty drug. What is the primary consequence of this program for the patient?

Answer: The $400 paid by the manufacturer will not count toward the patient's annual deductible or out-of-pocket maximum.

Copay accumulator programs are designed by payers to prevent the value of manufacturer copay assistance from counting toward a patient's deductible and annual out-of-pocket maximum. The plan 'accumulates' the manufacturer's payments but does not credit them to the patient's cost-sharing responsibilities, often resulting in an unexpected high cost for the patient once the manufacturer's assistance is exhausted.

A specialty pharmacy contracts with a Federally Qualified Health Center (FQHC) to dispense medications to its eligible patients. This arrangement allows the FQHC to generate savings to support its services. Which federal program enables this?

Answer: The 340B Drug Pricing Program.

The 340B Drug Pricing Program is a U.S. federal government program that requires drug manufacturers to provide outpatient drugs to eligible health care organizations, known as 'covered entities' (like FQHCs), at significantly reduced prices. Covered entities can partner with specialty pharmacies ('contract pharmacies') to dispense these drugs, and the savings generated are used to support patient care and expand services.

A Pharmacy Benefit Manager (PBM) is designing its formulary for a competitive therapeutic class, such as inflammatory conditions. To control spending and steer patients towards its preferred biologic agent, which combination of strategies is the PBM most likely to employ?

Answer: Negotiating higher rebates for a preferred product and requiring step therapy through a non-preferred agent first.

PBMs use several key strategies to manage specialty drug costs. They negotiate significant rebates from manufacturers in exchange for giving a drug preferred status on their formulary. To enforce this preference, they often implement utilization management tools like step therapy, which requires patients to try and fail on a less expensive or preferred alternative before the more expensive or non-preferred drug will be covered.

A patient is prescribed an oral oncolytic that is covered under their pharmacy benefit. The reimbursement that the specialty pharmacy receives from the PBM is most commonly based on which of the following models?

Answer: A discount off a benchmark price, such as Average Wholesale Price (AWP) or Wholesale Acquisition Cost (WAC), plus a dispensing fee.

For self-administered drugs dispensed by a pharmacy and billed under the pharmacy benefit, the traditional reimbursement model is fee-for-service. This typically involves the PBM paying the pharmacy based on a contracted discount off a list price benchmark like AWP or WAC, plus a negotiated professional dispensing fee. ASP-based reimbursement is used for drugs billed under the medical benefit (e.g., Medicare Part B).