Pharmacy Benefit Managers ACTUAL
UPDATED QUESTIONS AND CORRECT
ANSWERS
Pharmacy Benefit Managers (PBMs) - CORRECT ANSWERS✅✅Carve-out means that
prescription coverage is 'separated' from other health benefits and contracted to a PBM
Health benefits include: most preventive services, hospital care, ER, specialty care, and a
drug benefit
-However, pharmacies do not bill BlueCross/BlueShield - they bill a PBM
-This is why you have a separate insurance card for prescription coverage
PBM Revenue Stream - CORRECT ANSWERS✅✅1. Collect service fees
2. Contracts with large insurance companies = huge negotiating power
Prescription benefits administered by PBM by: - CORRECT ANSWERS✅✅1. Processing
claims
2. Verifying eligibility and copayment amount
3. Adjudicating online claims (i.e., approve for payment)
4. Managing drug formularies
5. Conducting drug utilization reviews
6. Contracting with pharmaceutical manufacturers
7. Offering mail order pharmacy services
Additional Administrative PBM services: - CORRECT ANSWERS✅✅1. Contract to
pharmacies to provide the specified services
2. Communicate the plan policies to patients and providers
3. Provide reports to plan sponsors
4. Reimburse providers
5. Audit providers
, 6. Control utilization and costs
7. Ensure program quality
Factors contributing to higher drug spending - CORRECT ANSWERS✅✅1. Medicare Part
D with the required formulary and pharmacy benefit management
2. Changes in therapeutic mix of drug therapy
3. New uses/indications for existing medications
4. Increased use of specialty drugs
5. Growth in therapeutic classes
6. Lower rebates from pharmaceutical manufacturers
How do PBMs control cost? - CORRECT ANSWERS✅✅1. Generic drugs and restricted
formularies
2. Multi-tiered copayment
3. Prior authorization
4. Step therapy
Potential Concerns w/ PBM cost control mechanisms - CORRECT ANSWERS✅✅1.
limiting pharmacy choice to mail order pharmacies
2. favoritism towards certain manufacturers
Costs incurred with each dispensing - CORRECT ANSWERS✅✅1. Unit cost
2. Utilization rate
3. Administration cost
Unit cost - CORRECT ANSWERS✅✅the amount paid for each prescription (ingredient cost
+ dispensing fee)
Utilization rate - CORRECT ANSWERS✅✅the number of prescriptions dispensed per
patient
UPDATED QUESTIONS AND CORRECT
ANSWERS
Pharmacy Benefit Managers (PBMs) - CORRECT ANSWERS✅✅Carve-out means that
prescription coverage is 'separated' from other health benefits and contracted to a PBM
Health benefits include: most preventive services, hospital care, ER, specialty care, and a
drug benefit
-However, pharmacies do not bill BlueCross/BlueShield - they bill a PBM
-This is why you have a separate insurance card for prescription coverage
PBM Revenue Stream - CORRECT ANSWERS✅✅1. Collect service fees
2. Contracts with large insurance companies = huge negotiating power
Prescription benefits administered by PBM by: - CORRECT ANSWERS✅✅1. Processing
claims
2. Verifying eligibility and copayment amount
3. Adjudicating online claims (i.e., approve for payment)
4. Managing drug formularies
5. Conducting drug utilization reviews
6. Contracting with pharmaceutical manufacturers
7. Offering mail order pharmacy services
Additional Administrative PBM services: - CORRECT ANSWERS✅✅1. Contract to
pharmacies to provide the specified services
2. Communicate the plan policies to patients and providers
3. Provide reports to plan sponsors
4. Reimburse providers
5. Audit providers
, 6. Control utilization and costs
7. Ensure program quality
Factors contributing to higher drug spending - CORRECT ANSWERS✅✅1. Medicare Part
D with the required formulary and pharmacy benefit management
2. Changes in therapeutic mix of drug therapy
3. New uses/indications for existing medications
4. Increased use of specialty drugs
5. Growth in therapeutic classes
6. Lower rebates from pharmaceutical manufacturers
How do PBMs control cost? - CORRECT ANSWERS✅✅1. Generic drugs and restricted
formularies
2. Multi-tiered copayment
3. Prior authorization
4. Step therapy
Potential Concerns w/ PBM cost control mechanisms - CORRECT ANSWERS✅✅1.
limiting pharmacy choice to mail order pharmacies
2. favoritism towards certain manufacturers
Costs incurred with each dispensing - CORRECT ANSWERS✅✅1. Unit cost
2. Utilization rate
3. Administration cost
Unit cost - CORRECT ANSWERS✅✅the amount paid for each prescription (ingredient cost
+ dispensing fee)
Utilization rate - CORRECT ANSWERS✅✅the number of prescriptions dispensed per
patient
