JULY 19, 2024
How Pharmacies Can Lower Costs: Pricing Models, Technology, and Data Capture
How Pharmacies Can Lower Costs: Pricing Models, Technology, and Data Capture
The pharmacy value chain is changing. Providers, pharmacies, payers, and PBMs are all experiencing ongoing pressure from rising costs, a strained workforce, and high interest rates.
Many are looking to bring more effective practices to their organizations. Among organizations that are doing it right, two themes arise: bringing more processes in-house and controlling costs influenced by partners.
This article outlines our observations surrounding PBMs lowering costs and improving reimbursement potential, and organizations taking on processes that vendors previously managed.
The pharmacy value chain is changing. Providers, pharmacies, payers, and PBMs are all experiencing ongoing pressure from rising costs, a strained workforce, and high interest rates.
Many are looking to bring more effective practices to their organizations. Among organizations that are doing it right, two themes arise: bringing more processes in-house and controlling costs influenced by partners.
This article outlines our observations surrounding PBMs lowering costs and improving reimbursement potential, and organizations taking on processes that vendors previously managed.
Drug Pricing Models, Technology, and Integrated PBMs
Drug Pricing Models, Technology, and Integrated PBMs
There are three main factors that impact your PBM’s ability to control costs: drug pricing models, technology, and their relationship with drug manufacturers.
Firstly, how your PBM prices their services impact your drug costs. A spread pricing model lets PBMs take a variable rate based on their performance in negotiating drug costs down for payers, providers, and, ultimately, patients. This model typically favors larger PBMs but may impact transparency into costs for pharmacies.
A fixed-rate drug pricing model, including cost-plus pricing, gives pharmacies and providers more insight into the costs being negotiated and incentivizes PBMs to attain the best possible prices. In contrast to traditional spread pricing agreements, this model also provides access to Maximum Allowable Cost (MAC) pricing.
We’re seeing newer and niche-sector PBMs utilizing this pricing model in long-term care, workers comp, and other sectors to great effect.
At Vista, we stick to fixed-rate pricing for all of our claims adjudication and rebate administration services.
There are three main factors that impact your PBM’s ability to control costs: drug pricing models, technology, and their relationship with drug manufacturers.
Firstly, how your PBM prices their services impact your drug costs. A spread pricing model lets PBMs take a variable rate based on their performance in negotiating drug costs down for payers, providers, and, ultimately, patients. This model typically favors larger PBMs but may impact transparency into costs for pharmacies.
A fixed-rate drug pricing model, including cost-plus pricing, gives pharmacies and providers more insight into the costs being negotiated and incentivizes PBMs to attain the best possible prices. In contrast to traditional spread pricing agreements, this model also provides access to Maximum Allowable Cost (MAC) pricing.
We’re seeing newer and niche-sector PBMs utilizing this pricing model in long-term care, workers comp, and other sectors to great effect.
At Vista, we stick to fixed-rate pricing for all of our claims adjudication and rebate administration services.
Technology and Vertically Integrated PBMs
Technology and Vertically Integrated PBMs
Many large PBMs are using technology that is relatively slow and inefficient compared to the latest technology. Much of this is due to the number of pre-existing systems they are already integrated with and the sheer scale of data being handled.
Let’s also note here that these PBMs are vertically integrated with the largest healthcare insurers in the nation. Change at this scale is incredibly expensive and comes with its own risks.
The downside to maintaining the status quo at these PBMs is the time cost. Older systems take longer to process information and tend to be more error-prone than new solutions utilizing AI, machine learning, and automation.
As with PBMs utilizing a fixed-pricing model, newer PBMs are using technology that is more efficient and more cost-effective. This effectively brings down service costs which translate into greater savings and more transparency for payers and providers.
Independence from any individual payer system has also spurred innovations in this technology, since PBMs who are new to the market must be able to meet the requirements of a variety of payers, including the plethora of managed care plans emerging in the market.
This demand for adaptability from day one means solutions are built to be efficient, accurate, and highly cost-effective while adjudicating claims in real time.
Many large PBMs are using technology that is relatively slow and inefficient compared to the latest technology. Much of this is due to the number of pre-existing systems they are already integrated with and the sheer scale of data being handled.
Let’s also note here that these PBMs are vertically integrated with the largest healthcare insurers in the nation. Change at this scale is incredibly expensive and comes with its own risks.
The downside to maintaining the status quo at these PBMs is the time cost. Older systems take longer to process information and tend to be more error-prone than new solutions utilizing AI, machine learning, and automation.
As with PBMs utilizing a fixed-pricing model, newer PBMs are using technology that is more efficient and more cost-effective. This effectively brings down service costs which translate into greater savings and more transparency for payers and providers.
Independence from any individual payer system has also spurred innovations in this technology, since PBMs who are new to the market must be able to meet the requirements of a variety of payers, including the plethora of managed care plans emerging in the market.
This demand for adaptability from day one means solutions are built to be efficient, accurate, and highly cost-effective while adjudicating claims in real time.
A Simple Solution for Pharmacy Data Management and Capture
A Simple Solution for Pharmacy Data Management and Capture
LTC Pharmacies can utilize cost-effective technology to manage the following processes themselves. Traditionally, many of these would either be outsourced to a vendor or performed in-house to varying degrees of success:
Claim capture and adjudication
Formulary adherence
Therapeutic interchanges
Rebate administration
LTC Pharmacies can utilize cost-effective technology to manage the following processes themselves. Traditionally, many of these would either be outsourced to a vendor or performed in-house to varying degrees of success:
Claim capture and adjudication
Formulary adherence
Therapeutic interchanges
Rebate administration
Economic leverage and procurement options for infusion centers
Economic leverage and procurement options for infusion centers
Infusion centers that use the economic leverage of a group purchasing organization (GPO) are able to get specialty drugs at a lower cost than buying them independently. GPOs often receive rebates for high-cost drugs or those new-to-market. It so happens that infusion centers almost entirely administer specialty drugs.
Drugs that infusion centers procure must be carefully reviewed. Aetna, for example, only covers a specific set of drugs to be administered in a non-hospital or home care setting. Reviewing payer formularies, drug utilization, and preparing for prior authorizations is vital work for infusion centers to ensure proper reimbursement.
Vista provides technology that significantly simplifies these processes.
Our purpose-built technology helps infusion centers:
Capture and manage claims data with ease
Ensure they are billing the correct payer
Speed up prior authorization workflows
Improve transparency into plan details
Increase reimbursement and reduce expenses
Infusion centers that use the economic leverage of a group purchasing organization (GPO) are able to get specialty drugs at a lower cost than buying them independently. GPOs often receive rebates for high-cost drugs or those new-to-market. It so happens that infusion centers almost entirely administer specialty drugs.
Drugs that infusion centers procure must be carefully reviewed. Aetna, for example, only covers a specific set of drugs to be administered in a non-hospital or home care setting. Reviewing payer formularies, drug utilization, and preparing for prior authorizations is vital work for infusion centers to ensure proper reimbursement.
Vista provides technology that significantly simplifies these processes.
Our purpose-built technology helps infusion centers:
Capture and manage claims data with ease
Ensure they are billing the correct payer
Speed up prior authorization workflows
Improve transparency into plan details
Increase reimbursement and reduce expenses
At VistaRx, we have developed a standalone solution that lets you independently adjudicate claims with near-perfect accuracy. This significantly improves reimbursements and reduces operating costs by eliminating the need for a third-party vendor to adjudicate claims on the payer or provider side.
At VistaRx, we have developed a standalone solution that lets you independently adjudicate claims with near-perfect accuracy. This significantly improves reimbursements and reduces operating costs by eliminating the need for a third-party vendor to adjudicate claims on the payer or provider side.
On average, our partners are reducing costs by 7% and improving rebate yields by 5-10%.
On average, our partners are reducing costs by 7% and improving rebate yields by 5-10%.
Claims data capture and adjudication used to be an incredibly timely, error-prone process, which made it nearly impossible for most pharmacies, PBMs, and even payers to do effectively in-house. Today, Focus by Vista enables these entities to capture and manage pharmacy data with ease.
Automation and firsthand knowledge of what providers, PBMs, and payers require means we’ve built Focus to handle a wide array of data and claim formats and ensure a high degree of accuracy. This approach completely removes the need for any manual processes and, in turn, human error.
Factoring in savings on vendor services fees and improved rebate yields, solutions like Focus help LTC pharmacies do more with their resources.
Claims data capture and adjudication used to be an incredibly timely, error-prone process, which made it nearly impossible for most pharmacies, PBMs, and even payers to do effectively in-house. Today, Focus by Vista enables these entities to capture and manage pharmacy data with ease.
Automation and firsthand knowledge of what providers, PBMs, and payers require means we’ve built Focus to handle a wide array of data and claim formats and ensure a high degree of accuracy. This approach completely removes the need for any manual processes and, in turn, human error.
Factoring in savings on vendor services fees and improved rebate yields, solutions like Focus help LTC pharmacies do more with their resources.
Contact Us Today
Founded in 2018, VistaRx (Vista) provides comprehensive pharmacy data capture and management solutions for a variety of entities in the pharmacy value chain. We utilize custom-coded technology, strategies, and partnerships to help our clients improve operations and reduce dependence on third-party vendors.
Sign Up for Vista Insights and Updates
SUPPORT@VISTARX.COM
(385) 355-4882
2290 E 4500 S, STE 130
HOLLADAY, UT 84117
COPYRIGHT VISTARX 2024
Sign Up for Vista Insights and Updates
SUPPORT@VISTARX.COM
(385) 355-4882
2290 E 4500 S, STE 130
HOLLADAY, UT 84117
COPYRIGHT VISTARX 2024
Sign Up for Vista Insights and Updates
SUPPORT@VISTARX.COM
(385) 355-4882
2290 E 4500 S, STE 130
HOLLADAY, UT 84117
COPYRIGHT VISTARX 2024
