Tuesday, March 27, 2007

Follow the Money II

The Florida Office of Program Policy Analysis and Government Accountability(OOPPGA) does independent research for the Florida Legislature and pursuant to a legislative request last month published a review of PBM business practices.

Due to the number of retirees in Florida prescription drug costs are a jugular issue and we are heading towards a 60 Minutes moment as the media begins to understand how PBM'S business models function.

Prescription drug costs are the single largest component of employee out of pocket expenses for healthcare. The US Supreme Court has already rejected challenges to Maine's PBM Disclosure Law as noted here and excerpted below.

In a key legal setback for pharmacy benefit managers (PBMs), the US Supreme Court shot down a challenge to Maine's controversial law requiring disclosures of prescription drug deals by PBMs. The Maine statute, which was challenged by PBM lobbyists for the Pharmaceutical Care Management Association (PCMA), requires PBMs to disclose rebates, conflicts of interest, and discounts from drug manufacturers that PBMs are retaining as profit rather than passing on to plan sponsors.
A few weeks ago I was speaking to an old friend who started in group school with me many years ago, a group gal if you will who works for a major Big 4 managed care company. When I shared some insights into the PBM work my firm was doing for several clients she began to comment that she hoped it would expose the corruption that existed in her market where unknown to many large self-funded employers for whom they supposedly worked some brokers, TPA's and consultants were accepting non-reportable rebates, commisions and fees.

It was not too long ago when I worked for insurance carriers that certain brokers and consultants made it abundantly clear to me that a non-reportable, non-5500 schedule A override was the price of admission to be considered a viable market. This type of behavior was wrong then and it is wrong today. Frankly, its hush money. One of the byproducts of PBM disclosure legislation at the state and federal level will be further exposure of some of the business practices PBM's utilize to assure they acquire and retain customers. Just follow the money.

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