Magellan understands that the market looks at pharmacy trends as a gauge to measure pharmacy benefits manager (PBM) success. However, you really can’t compare one trend number to another as every PBM uses different methodologies, different data sets and different calculations to arrive at their trend number, and often adjustments are made to these calculations year-over-year. This is something Magellan likes to call little ‘t’ trend.

Do you know what most of these trend numbers are missing? One of the largest cost drivers today – prescriptions drugs dispensed through the medical benefit – when you combine pharmacy benefit with medical benefit spend, you get what we like to call big ‘T’ Trend. In fact, you need to combine both to see that there is as much, if not more specialty spend going through the medical benefit today that is going unmanaged.

As specialty costs continue to soar the need to leverage effective management and thought-leading expertise is essential.  As pioneers in this complex specialty environment, we have dedicated ourselves to solving the challenges and creating solutions that resolve what’s truly driving big ‘T’ Trend.

Watch our video to learn more.

A major trend in the pharmacy space continues to be increasing specialty drug spend, which is expected to continue with the introduction of new specialty agents for oncology, autoimmune disorders and rare diseases. In this year’s Medical Pharmacy Trend Report Employer Group Supplement, we found that 88 percent of employers reported a medical benefit spend of less than $10 million, and a year-over-year drug trend between 1-20 percent. For the few employer groups with spend above $10 million, it was due to a higher number of lives, and may be assumed that the employee mix for these groups may have included those with more costly health expenditures.

The Employer Group Supplement assists employer groups and third-party administrators in determining specialty drug trends and strategies to solve complex challenges impacting the medical benefit drug landscape. Our goal is to expand the information shared with employer groups to create a more dynamic picture of specialty drug management and help employers make more effective healthcare decisions. Building an effective medical benefit drug management strategy requires an in-depth knowledge of and expertise in this complex area, but it’s essential to help employers rein in costs and improve the quality of care for members. It is our hope that the survey data presented in this report helps employer groups begin to think about and investigate escalating medical pharmacy costs.

Download the full report or listen to our webinar to learn more.

On March 22, Magellan Rx Management released its seventh annual Medical Pharmacy Trend Report, which continues to be a leading source for payers and other industry stakeholders to analyze high-cost injectable drugs paid under the medical benefit. It’s clear that specialty spend on the medical benefit accounts for a significant expenditure for both members and payers alike and it is continuing to grow rapidly, particularly for commercial health plans. Ensuring a sound medical benefit drug management structure is in place is necessary to rein in costs in both the short- and long-term, particularly as new drugs come to market.

This year’s report highlights the member and payer impact of high-cost specialty drugs billed on the medical benefit. Often unrecognized, but a critical component of total drug spend, this segment of drug utilization is especially important considering that by 2018, it’s expected that 50 percent of total United States drug spend will be composed of specialty medications. Additionally, half of specialty drug spend is billed through the pharmacy benefit and half through the medical benefit, or “medical pharmacy.” Specifically, the report found:

• Commercial medical pharmacy spend increased by an average of 12 percent each year from 2011-2015, while Medicare Advantage remained relatively stable with only a 5 percent increase over the same five-year period.
• The majority of oncology drugs are still infused or injected and the largest portion of their costs are covered through the insured’s medical benefit. Oncology and supportive care agents represent nearly 50 percent of commercial medical benefit drug spend and nearly 60 percent for Medicare Advantage.
• The leading cause of blindness in senior populations is treated with injections that are exclusively covered through the medical benefit, and this was the highest trending category on the medical benefit in 2015 (30 percent for commercial and 39 percent for Medicare Advantage).
• On average, the 10 most expensive commercial medical benefit drugs averaged $421,220 annually per patient and affected two per 100,000 members. The 10 costliest Medicare medical benefit drugs averaged $268,780 and affected eight per 100,000 members.
• In total, taking into account coinsurance, copay and deductible, members using a medical benefit drug paid 3 percent of total medical pharmacy costs in commercial (97 percent for the payer) and 5 percent in Medicare Advantage  (95 percent for the payer). While the member percentage may seem small in comparison to payer percentage, many members have trouble affording their medications or reach their maximum out-of-pocket costs, oftentimes at thousands of dollars.

Key strategies for the effective management of medical benefit drug spend outlined in the report include:

• Clinically and operationally managing drugs billed with unclassified Healthcare Common Procedure Coding System codes;
• Improving claims system capabilities to capture and report National Drug Codes;
• Employing provider network strategies for commercial members to remove disparities in cost by outpatient site of service;
• Implementing benefit design strategies, and
• Bringing transparency of medical benefit drug costs and therapeutic options to members.

Building an effective medical benefit drug management strategy requires an in-depth knowledge of and expertise in this complex area, but it’s essential to help payers rein in costs and improve the quality of care for members.

Download the full report to learn more.

Learn more about ways to keep specialty spend, an important — and quickly growing — area of pharmacy spend, from Matt Ward, Magellan Rx Management’s general manager of the employer segment. Ward’s op-ed on the subject was recently published in WorldatWork’s magazine. WorldatWork is a nonprofit human resources association and compensation authority for professionals and organizations focused on compensation, benefits and total rewards.

Read more here: Six Ways to Keep Specialty Spend Under Control 

Magellan’s collection of HEDIS (Healthcare Effectiveness Data and Information Set) quality measures for 2017 has entered the final phase of data collection. You’ve probably heard of the acronym HEDIS – but what does it stand for and what does it mean to you? The Healthcare Effectiveness Data and Information Set – HEDIS — was created by the National Committee for Quality Assurance (NCQA) to measure the clinical quality performance of health plans.  This is accomplished through the collection and analysis of data documenting the clinical care received by individual plan members from providers, influenced through activities and programs delivered by the health plans.  The data is aggregated and reported collectively to reflect the ‘collective’ or population-based care received by the plan’s membership.  These reports have become a major component of quality rating systems that measure the clinical quality performance of health plans by Centers for Medicare & Medicaid Services, states offering Medicaid and other entities. Right now, Magellan has entered the final phase of data collection for HEDIS quality measures for 2017.

There are 91 HEDIS 2017 measures, but it’s important to note that the number may vary from year to year as new measures are added to the set and some are retired. The measures cover many aspects of healthcare including preventive care such as screening tests (e.g., mammograms) and immunizations, management of physical and mental health conditions, access and availability of care, patient experience, utilization and relative resource use.  Data is reported individually for each product and line of business

Measure data is collected is a variety of ways.  Claims are the major source of data, but specific measures may also allow plans to survey members or to access member medical records for additional data not captured in claims.  This type of data collection (combined claims and chart data) is called hybrid.  The final phase of data collection for health plans choosing to do hybrid runs from January through May and is often called MRR for medical record retrieval, or simply ‘chart chase.’  Final HEDIS data covering services rendered in 2016 and prior will be submitted to NCQA by June 15, 2017.  Final health plan ratings for all lines of business are published on the NCQA website by October 2017.

For health plans, HEDIS ratings can be very important. The scores on measures can help them understand quality of care being delivered to their members in some of the most common chronic and acute illnesses.  Higher scores can help compete more effectively in various markets. HEDIS score reporting are often required in public markets as well, where the results are often reported to the states, or occasionally counties, in which the plans reside.

Behavioral health and pharmacy are well represented in the HEDIS measure set. Behavioral health has multiple measures that include ensuring continuity of care, appropriate psychotropic medication management/adherence, and initiation and engagement of drug and alcohol abuse treatment.  Pharmacy measures focus on medication management of acute and chronic physical and mental illness, appropriate medications in the elderly, and management of polypharmacy.  Specialty measures are directed toward inappropriate imaging.

So, what is the value of HEDIS to Magellan?  Aside from being a collection and reporting contract requirement for many of our customers and our own health plan, HEDIS gives Magellan valuable information about the populations we serve.

By following the behavioral health data, we collect, for example, we can identify gaps in network performance in patient follow-up patterns, management of drug and alcohol abuse, and prescribing and adherence to medications.  This allows us to design and implement interventions that can improve outcomes and reduce cost of care.

The same type of analysis/intervention applies to physical health conditions.  Analysis of HEDIS data helps identify gaps in care, particularly preventive care, in such important and chronic populations as patients with diabetes mellitus, patients with cardiovascular disease, and patients with lung disease.  We can also identify and address at-risk pediatric populations who fail to complete preventive care such as immunizations, dental and well-child care.

As the healthcare industry moves more and more toward value-based purchasing, all providers, insurers and their vendors are necessarily increasingly focused on the quality of care that is delivered.  The impact of this should be better outcomes for our members.

Find more articles about NCQA here

Medicine continues to evolve quickly, with new treatments and trials coming to market every month. As a doctor in practice, staying up-to-date on the newest innovations and school of thought can be overwhelming, particularly for rare diseases such as Duchenne muscular dystrophy or spinal muscular atrophy. What’s the role of a pharmacy benefit manager in cases like these?

As part of its value-based approach to pharmacy benefit management (PBM), Magellan Rx Management sees itself as an idea connector and conversation starter. Recently, a discussion forum connected doctors with two key opinion leaders to discuss the complexities and effective management strategies for Duchenne muscular dystrophy (DMD) and Spinal muscular atrophy (SMA).

• Duchenne muscular dystrophy is a genetic disorder characterized by progressive muscle degeneration and weakness. It is one of nine types of muscular dystrophy. DMD is caused by an absence of dystrophin, a protein that helps keep muscle cells intact. Symptom onset is in early childhood, usually between ages three to five. The disease primarily affects boys, but in rare cases it can affect girls.* According to the UCLA Duchenne Muscular Dystrophy Research Center, DMD affects one in every 3,500 male births.

• Spinal muscular atrophy is a genetic disease affecting the part of the nervous system that controls voluntary muscle movement. SMA involves the loss of nerve cells called motor neuronsin the spinal cord and is classified as a motor neuron disease. The age at which SMA symptoms begin roughly correlates with the degree to which motor function is affected: The earlier the age of onset, the greater the impact on motor function.* For SMA, the disease affects one in every 6,000-10,000 births, according to the Orphanet Journal of Rare Diseases.

The physician KOLs provided their expertise and insight on a wide range of topics including review of the clinical evidence, appropriate patient selection, and a discussion of the treatment landscape.  Additionally, effective clinical polices, practical dosing considerations, and emerging therapeutics were explored in this robust webinar. Importantly, doctors who took part in this discussion were given the opportunity to ask the KOLs questions about DMD and SMA – providing an opportunity for open dialogue and discussion about these complex issues.

*Information supplied by www.mda.org

In late January, Magellan held its second annual Magellan Open Vision Exchange (MOVE) conference in Scottsdale, Ariz. MOVE brings together a large cast of voices from the healthcare industry to discuss the future of healthcare for patients, plans and providers. Over two days, we heard from private industry experts, government leaders, as well as other subject matter experts and thought leaders both from inside and outside the healthcare industry.

The Future of Healthcare Beyond the Affordable Care Act

Obviously, the continuing debate over the future of healthcare and the Affordable Care Act were a central topic of the conversation at this year’s MOVE. A number of speakers talked about the impact of the Trump Administration’s efforts to repeal the Affordable Care Act. Former Utah Governor Michael Leavitt, who also served as the secretary of the Department of Health and Human Services, said that while he expects repeal and replace legislation will pass, significant parts will be deferred for three or four years. Brian Coyne, VP of federal affairs at Magellan Health, said that he feared gridlock over the next couple of years.

Managing Transformation in the Healthcare World

One of the key topics discussed at this year’s event was the immediate future of the healthcare industry. After a long period of explosive innovation, there was consensus that disruptive change will continue. Magellan Healthcare CEO Sam Srivastava posited that we are currently in a tech-bubble that is about to burst. The industry is waiting to see which of the early healthcare technology entrants will survive and how technology and healthcare will continue to interface with each other.
Leavitt spoke extensively of the need to manage transformation, especially in healthcare. Leavitt stressed that systematic healthcare change takes hold over three to four decade cycle, and he believes we are less than mid-way through the current transformation. Using an analogy of a cattle herd, Leavitt made the point that you can’t drive a herd too quickly, or you risk a stampede. You also can’t push the herd too slowly or it will meander. Applied to healthcare, the idea is simple but true: If we push change too quickly there will be chaos, but if we fail to adapt and change, we will stagnate. Allowing ourselves to be “lulled into inaction” is a recipe for disaster.

Value-Based Healthcare

A critical area of discussion was the expansion of value-based care. Speakers agreed that demand for value-based care is accelerating. Leavitt said he believed this was true regardless of the Trump Administration’s plans for healthcare. Billy Millwee, President and CEO of BM&A Public Policy, cited broad bipartisan support for the value-based model and agreed that it was here to stay.

Chet Burrell, president and CEO of CareFirst BlueCross BlueShield, spoke clearly on the approach that his company was taking: “We started and ended with common sense.” He went on to explain that they had built their model with the primary care physician at the center (PCP). The PCP knows the patient best and is therefore in the best position to make decisions regarding who to refer and to whom. By taking this approach, Burrell relayed, CareFirst was able to build a patient centered medical home model that improved care while reducing costs.

Despite the level of change being experienced throughout healthcare, a common theme was one of our industry being grounded in helping people get the high-quality care they need, affordably. This is the essence of why healthcare is our chosen industry and why we are driven to innovate.

An interesting takeaway was that across the conference and speakers, there was a clear common theme: while the ultimate structure of the pay-for-value transformation is uncertain, the movement will continue. Experimentation, promoted by both public and private payer initiatives, will drive innovation and change. Some will be better prepared than others to handle this paradigm shift.

Magellan Rx Management is hosting its annual Specialty Summit from August 28-30, 2017 in New York City. This premier event provides insights, innovations and solutions for some of the pharmaceutical industry’s hottest topics.

DO YOU HAVE A STORY TO TELL?

If you have compelling research or new ways to drive innovative thinking that can help solve complex specialty pharmacy challenges, we want to hear from you! Magellan Rx Management is accepting proposals now through March 13.

Click here to submit your story, and learn more about the Specialty Summit here.