Specialty Drug Management Under the Medical Benefit: A HealthPartners Approach

The average price of new drugs at launch is steadily increasing, making the case for their early management that much stronger, noted Christine Strahl of HealthPartners at the 2012 PBMI Drug Benefit Conference.

The average price of new drugs at launch is steadily increasing, making the case for their early management that much stronger, noted Christine Strahl of HealthPartners at the 2012 PBMI Drug Benefit Conference.

To prepare for a robust specialty pipeline and prevent overbilling, health plans must implement a management plan for specialty medications before the therapies are widely adopted, explained Christine Strahl, MBA, BCPS, specialty pharmacy program manager at HealthPartners, Inc, during a educational session held on February 18-20, 2013, at the PBMI Drug Benefit Conference in Las Vegas. Strahl noted that the goal of her health plan is to manage drugs the same way every time, regardless of where they are administered.

Logistics such as the issuance of payment codes, pricing schemes, and claim governance and standards, often make managing drugs on the medical benefit extremely difficult, however. As Strahl pointed out, Healthcare Common Procedural Codes (HCPC) are assigned by chemical type, and each chemical entity has a single code. Codes are assigned quarterly for these drugs, and are often not available at launch. The same scheme is not recognized in pharmacy claims, which use a National Drug Codes system (NDC). These codes are more granular; each drug package is labeled, and codes are assigned at launch, making them easier to track.

In addition, Strahl listed drug pricing methodology as another limitation of managing drugs on the medical benefit. “Pricing proxies exist,” she pointed out, making reimbursement based off of invoices impractical.

To counteract the above-mentioned limitations of managing spend on the medical benefit, HealthPartners adjusted their provider contracting methods to reduce the cost of specialty drugs and their coverage criteria to impact the amount and types of drugs used.

In terms of policy changes, HealthPartners decided there would be no payment for certain self-administered drugs, because these types of medications should be moved under the pharmacy benefit. They recommended “NDC submission on all J-Code claims,” and started requiring NDC submission for Medicaid products. In terms of contracting, the company implemented Average Sales Price—based fee schedules, and implemented Average Wholesale Price pricing for unclassified J-codes in lieu of a “discount off submitted” entry.

HealthPartners also built a new claims support system in-house and established a new procedure for handling drug claims for the period after drug launch and before drug coding/pricing. They instituted what they called a “NDC/HCPC Crosswalk” during this time period to ensure that drugs submitted for reimbursement under unclassified codes did not already have assigned J-codes. In addition, they instituted a “Reasonable Price Check” rule to make sure a drug submitted under an unclassified code was being reimbursed at a reasonable rate when compared with the price of a standard dose. Through manual review, HealthPartners was able to determine when providers were overbilling for an office-administered injectable or infusible.

Through these initiatives, HealthPartners was able to more effectively manage drugs on the medical benefit and “decrease utilization and cost without creating provider network disruption,” noted Strahl. In addition, the company was able to use pharmacy management tactics to handle drugs under the medical benefit.