PBM merging pharmacy and medical claims: The time is right

Pharmacy claims exist in a health plan in two distinct silos. Medical pharmacy claims are billed to the medical benefit using a professional claim format such as a CMS 1500. Claims are coded with HCPCs rather than NDCs and are generally much higher cost pharmaceuticals than their retail counterparts. Medical claims are generated by physician practices, home infusion suppliers, specialty pharmacies, outpatient clinics, and hospitals.

Retail pharmacy claims are processed, adjudicated, and paid by a PBM contracted by a health plan. These claims are processed in real-time at the point of service which is usually a retail pharmacy. Health plans receive adjudicated claims data for these retail claims from the PBM and are stored in data warehouse obscurity.

For most plans, the two data bases are not combined beyond the highest level of totals for the combined drug spend. Consequently, there is lost opportunity for plans to achieve comprehensive medication management and integrated case management. Pharmaceutical outcomes for most diseases  are not independent of medical treatment. Without combining the data for both pharmacy claims and medical claims, it is impossible to monitor total drug therapy utilization and to evaluate the true cost of therapy.

By combining pharmacy and medical claims, the plan can evaluate opportunities for optimizing pharmaceutical care, for example before  a patient is moved to a more expensive biological agent dispensed by a specialty pharmacy. The member may be receiving both retail and medical claims for the same condition. With medical and pharmacy claims data combined, current therapy can be matched up with nationally recognized treatment guidelines and recommendations can be made to providers. Health plans can better achieve clinical quality goals with a combined data set.

In addition, once the data are combined, both types of data can be reviewed for fraud, waste, and abuse. Outliers can be identified and sent to validation. Recovery of excess payments can occur. Trending and other opportunities can be identified such as finding duplicate billing both from the pharmacy and a physician’s office, duplicate claims from a single provider, or other aberrant provider reimbursement patterns.

For many plans, particularly the smaller ones, the technical resources required for merging the two data sources often are not available. Combining medical and pharmacy claims is a service by which a PBM can bring added value to the plan.

The current PBM model of focusing solely on pharmacy claims needs to evolve into a more robust, comprehensive tool for plans to achieve better control of pharmaceutical outcomes. PBM platforms have the capability to fit the role. The time is right for the PBM industry to step up to the challenge of helping plans manage both improved outcomes and lower costs.