Frequently Asked Questions about URAC's Pharmacy Benefit Management Accreditation
Q: What is a PBM?A: A PBM is an organization that provides administrative services in processing and analyzing prescription claims for pharmacy benefit and coverage programs. PBM services can include contracting with a network of pharmacies; establishing payment levels for provider pharmacies; negotiating rebate arrangements; developing and managing formularies, preferred drug lists, and prior authorization programs; maintaining patient compliance programs; performing drug utilization review; and operating disease management programs. Many PBMs also operate mail order pharmacies or have arrangements to include prescription availability through mail order pharmacies. PBMs play a key role in managing pharmacy benefit plans in the Medicare drug program.
Source: Health Resources and Services Administration, DHHS
Q: Why is accreditation a good idea for PBMs?
A: There are several reasons to create a pharmacy benefit management accreditation program at this time:
• One in every five health care dollars is spent on prescription drugs. Yet there are currently no national standards for the design and operation of the important programs that benefit managers use to assure access to drugs and pharmacies, assure patient safety, and manage use of drugs by patients.
• There is movement within the industry for operational changes, including greater transparency in contracting, the rebate process, and pricing structures. Accreditation would set industry-wide standards and bring a recognizable seal of quality to accredited organizations.
• In recent years, the PBM industry has been the subject of increased interest from state legislatures, regulators and the courts. With the implementation of the Medicare Part D pharmacy program this year, increased scrutiny on the federal level is to be expected. Independent, third-party accreditation will be valuable in enabling companies to demonstrate organizational excellence. This will improve understanding of how well-managed companies achieve prescription drug cost savings and improvements in medication therapy.
• The implementation of Medicare Part D is expected to increase activity in the PBM market significantly. Medicare prescription drug spending alone over the next decade is projected to be between $500 billion and $1.2 trillion . Source: “Medicare Drug Benefit May Cost $1.2 Trillion,” Washington Post, Feb, 9, 2005 .
• Data generated within the PBM industry is invaluable to medical management of certain clinical conditions. Operational structures that ensure patient security while streamlining quality improvement processes are essential for improvements in this arena.
Q: Who will be eligible to seek accreditation?
A: Health plans and PBMs will be eligible for URAC Pharmacy Benefit Management Accreditation. When fully implemented, accreditation will be available for virtually all lines of pharmacy benefit management business: private sector and government
employee/retiree business (“commercial”), and Medicare Part D business, whether provided by a stand-alone drug plan or by a Medicare Advantage Plan, i.e.:
• Medicare Standalone Prescription Drug Plans
• Commercial PBMs
• Medicare Advantage Prescription Drug Plans
• Commercial Health Plans
Q: Can my organization still get accredited even if it does not provide all the services described in the seven pharmacy benefit management accreditation modules?
A: Please contact URAC so we can review your program and determine how it best aligns with URAC's pharmacy benefit management accreditation program. URAC does have a solution to most accreditation requests utilizing its Vendor Certification Program for health care organizations. The Vendor Certification Program is for companies that provide one or more products or services that support the capabilities of URAC-accredited companies. Certification will be available in any URAC accreditation program area. Under the Vendor Certification Program, URAC will conduct a rigorous review of the basic operations of the vendor company as well as selected standards within a current accreditation module. Upon completion of the review process, vendors will receive URAC's Core Accreditation, plus a Certificate of Compliance with the selected standards.
Q: Who serves on the Standards Committee?
A: The Pharmacy Benefit Management Standards Committee includes stakeholders across the prescription benefit management spectrum: industry representatives, insurers, consumers, purchasers and regulators are all working to develop the standards. The Committee is chaired by John D. Jones, RPh, JD, vice president of government affairs and pharmacy policy for Prescription Solutions.
Q: What will the standards cover?
A: While not fully developed, you can expect standards covering:
• Organizational integrity : program structure, contract oversight, privacy, security, quality management, disclosure to customers.
• Clinical areas: pharmacy and therapeutics committees, formulary, utilization management, medication therapy management.
• Operations: pharmacy network, customer service.
• Marketing and Communications: consumer information, disclosure.
Q: What is the timeline for the standards development process?
A: The Pharmacy Benefit Management Standards Committee first convened in July and has been meeting frequently to develop, review, refine and draft standards. URAC will release a first set of Standards for public comment in October 2006. The Pharmacy Benefit Management Standards Committee will reconvene in late 2006 to review public comments and recommend to URAC standards for Beta testing. Beta site visits will occur in early 2007, followed by further committee review. The final standards will be presented for review and approval by the URAC board in July 2007.
Q: Where can I get more information about URAC's Pharmacy Benefit Management Standards?
John DuMoulin, VP, Government Relations and Product Development
For Media Questions Contact: Karla Hurter 703-319-0957 or khurter@health2resources.com