HD42 - A Review of the Commonwealth of Virginia's Key Advantage Mail-Order Prescription Drug Program

  • Published: 1994
  • Author: Secretary of Administration and Secretary of Health and Human Resources
  • Enabling Authority: House Joint Resolution 658 (Regular Session, 1993)

Executive Summary:
I. INTRODUCTION

The 1993 session of the General Assembly passed House Joint Resolution (HJR) 658 (see Appendix A). HJR 658 directed the Secretaries of Health and Human Resources and Administration to study the efficacy of the mail order prescription drug component of the Key Advantage health benefits plan.

Specifically, HJR 658 directed the Secretaries to examine quality of care and cost issues such as the loss of the physician-patient-pharmacist relationship; the loss of personal counseling concerning drug effects and interactions; the potential for abuse of or improper use of controlled substances; and the potential for patients to obtain excess supplies of drugs.

II. FINDINGS

A. Mail-Order Prescription Drug Programs

1. Development of Mail-Order Programs (Page II-I)

• Mail-order prescription drug (MOPD) programs have been established primarily as an alternative source for patients to receive long-term or maintenance prescriptions (i.e. prescriptions for 90-day drug supplies).

• MOPD programs purchase their prescription ingredients in large bulk quantities, and are able to process large volumes of prescriptions through automated systems. As a result of these efficiencies, MOPD programs typically are able to provide cost savings to health benefits plan sponsors (e.g., the Commonwealth) and patients.

2. Growth in MOPD Programs (Page II-I)

• The first MOPD program began in 1946 when the Veteran's Administration (VA) mailed prescription drugs to eligible veterans.

• MOPD programs experienced rapid growth during the past 10 years, particularly in the late 1980s and early 1990s. MOPD program sales have grown from less than $100 million in 1981 to approximately $3.4 billion in 1991.

• Fifteen other states include a MOPD program as part of their benefits plans offered to employees. In addition, many large employers across the nation include MOPD programs in their employee benefits plans.

B. Commonwealth of Virginia's MOPD Program

1. Program Implementation and Design (Page II-3)

• The Department of Personnel and Training (OPT) implemented the current MOPD program on January 1, 1989, as one component of a new outpatient prescription drug benefit.

• Under the current MOPD program, enrollees pay a $6.00 co-payment for prescriptions (up to a 90-day supply) purchased through the mail-order pharmacy.

• Enrollees also may purchase prescriptions (up to a 90-day supply) for $6.00 from 610 community pharmacies which have agreed to accept the same level of reimbursement as the mail-order pharmacy. These pharmacies are called "walk-in maintenance" pharmacies.

• The Prescription Service Division of Caremark, Inc. administers the Commonwealth's MOPD program through a subcontract with PCS, Inc.

2. MOPD Dispensing Process (Page III-4)

• Each prescription received by the Caremark mail-order facility is compared to patient information regarding allergies, health conditions and other current prescriptions to detect possible adverse interactions. The system also monitors each prescription to prevent premature refill requests and duplicate prescriptions.

• Every prescription filled at the Caremark mail-order pharmacy is checked for accuracy by two different registered pharmacists. In addition, the computer system used by Caremark performs 37 safety edits before a prescription is filled.

3. Operating statistics for the outpatient Prescription Drug Program (Page III-8)

• The number of prescriptions filled at the mail-order pharmacy (37,407) represents only 3.1% of all of the outpatient prescription drug claims incurred during fiscal (FY) 1993. The number of prescriptions filled at the walk-in maintenance pharmacies (112,814) represents 9.5% of all prescriptions.

• The vast majority of prescriptions (1,037,302), representing 87.4% of the total, are filled at community pharmacies. When walk-in maintenance pharmacy prescriptions are included, 97% of all prescriptions are filled at a local pharmacy.

4. MOPD Program Cost Savings (Page IV-1)

• The Commonwealth pays a lower ingredient cost for drugs purchased through the mail-order pharmacy and walk-in maintenance pharmacies than those purchased through community pharmacies. Also, no dispensing fee is paid for these prescriptions.

• DPT estimates that the MOPD program saved the health benefits program approximately $2.1 million in FY 1993.

C. Quality of Care Issues

1. Walk-In Maintenance Pharmacies (Page IV-1)

• When examining quality of care issues, it is important to note that if an enrollee is concerned that the mail-order arrangement is not suitable for any reason, the enrollee has the option of purchasing his/her long-term medications from a walk-in maintenance pharmacy for the same price.

2. Physician-Patient-Pharmacist Relationship and Patient Counseling (Page IV-2)

• MOPD programs have little impact on the physician's role. Regardless of where the prescription is filled, the physician's contact with the pharmacist is by telephone. Such telephone interaction between the physician and the pharmacist is available through the Commonwealth's MOPD program.

• For prescriptions received from the mail-order pharmacy, there is no face-to-face counseling. However, Caremark pharmacists provide counseling services for enrollees through a 24-hour toll-free telephone service.

• Caremark pharmacists also consult with prescribing physicians on an as-needed basis.

• Written patient counseling information is included in every prescription mailed from the Caremark facility. A Caremark customer satisfaction survey indicated that 96% of respondents believed the information was either excellent, very good or good.

3. Potential Abuse/Improper Use of Controlled Substances (Page IV-4)

• Regardless of where a prescription is purchased (i.e., mail-order or local pharmacy), there is no fail-proof method of ensuring that controlled substances are not abused by the patient.

• The Caremark mail-order facility maintains a comprehensive quality control process to ensure that all prescriptions are filled as prescribed by the physician.

• Every prescription filled at the Caremark facility is checked by two different registered pharmacists.

• Each mail-order prescription is entered into the Caremark computer system to complete a Drug Utilization Review (DUR). The DUR program conducts 37 safety-checks to ensure the safety of the prescription.

4. Potential for Obtaining Excess Supply of Drugs (Page IV-5)

• One of Caremark's DUR edits ensures that the prescribed amount of the drug does not exceed any applicable legal limits. Another DUR edit monitors each prescription for premature refill requests and duplicate prescriptions.

• Approximately 50% of all prescriptions are filled from Caremark pre-packaged containers. Another 15% of all prescriptions are filled from manufacturers' original containers. Other prescriptions are counted by the Caremark computer system or a Kirby Lester Counter (i.e., automated pill counter). This process significantly minimizes any chance of human error when filling prescriptions.

5. Error Rate of Mail-Order Facility (Page IV-5)

• DPT requires Caremark to report any dispensing errors identified at the last quality checkpoint and errors discovered after the drug has been mailed. DPT, thus far, has not received any such reports during the course of the current contract.

• The Virginia Board of Pharmacy reports that it has adjudicated no cases to date concerning the Caremark mail-order facility, and that the Caremark facility's pharmacy license is current and in good standing.

• Caremark was not able to provide a specific error rate for its mail-order facilities. However, Caremark did provide data which indicated that only 0.6% of prescriptions are re-processed prior to ever being dispensed and shipped. These corrections were made as a result of quality assurance audits which identified problems such as missing charge slips, incorrect demographic information, damaged packaging and key entry errors.

6. Caremark Customer satisfaction Survey (Page IV-6)

• Caremark's most recent satisfaction survey found that 97% of respondents who had used its Virginia mail-order facility rated the overall quality of the Caremark mail-order prescription service as good, very good, or excellent.

• Ninety-five percent of these same respondents rated the overall quality of Caremark's delivery system good, very good or excellent. A similar percentage of respondents rated the labeling information provided with each prescription as good, very good or excellent.

7. Other Studies/Reports: Quality of Mail-Order Prescription Drug Programs (Page IV-7)

• Several studies/reports regarding MOPD programs which were conducted by independent organizations (e.g., state legislatures, federal agencies, and universities) were reviewed.

• The studies/reports found little, if any, evidence to suggest that MOPD programs are unsafe. As stated in a 1987 resolution adopted by the American Medical Association, "Mail service pharmacy is an established alternative method of distributing drugs in the United States."

8. Administrative Efficiency of the Commonwealth's MOPD Program (Page IV-10)

• The Commonwealth's MOPD program does not require the use of any claims forms by enrollees or pharmacies.

• The claims review process is entirely automated. The process includes standard claims controls such as checking the eligibility of the beneficiary and the possible duplication of claims. In addition, the process includes extensive utilization controls to identify possible overutilization, under-utilization, incorrect dosages, and other possible problems.

• DPT's independent benefits consultant conducts periodic audits of the entire claims processing system. The most recent audit, completed in December, 1991, uncovered no problems with the process.

9. Analysis of Hospitalization Rates: MOPD Patients Versus Community Pharmacy Patients (Page IV-11)

• Data was not available to conduct a comparative analysis of the rates of hospitalization of patients who use the MOPD program with that of patients who use community pharmacies.

• The General Assembly may want to consider making funds available to a qualified health research institution to conduct such a study.

III. CONCLUSIONS AND RECOMMENDATIONS

1. Conclusions (Page V-1)

• Mail-order prescription drug (MOPD) programs have become an established feature of many employer-sponsored health benefits plans throughout the nation.

• The Commonwealth's MOPD program is working safely and effectively, and is saving money.

• The walk-in maintenance pharmacy is an important feature of the Commonwealth's MOPD program. Persons who have concerns about any aspect of the mail-order service may purchase their prescriptions at one of 610 local pharmacies which participate as a walk-in maintenance pharmacy.

2. Recommendations

• The Department of Personnel and Training (DPT) should continue to monitor the operations of the mail-order pharmacy to ensure that operations conform to the performance requirements contained in its contract with the program administrator, and that the contractor meets all applicable federal and state safety regulations.

• DPT should continue to have its independent auditors conduct periodic audits of the MOPD program to ensure the administrator is meeting all performance standards. DPT also should continue to conduct unannounced visits to the Caremark mail-order pharmacy as part of its oversight of the MOPD program.

• DPT and Caremark should increase employees' awareness of the 24-hour pharmacy counseling hotline by providing additional information in health benefits communications and including reminder notices in mail-order prescriptions received by patients.

• DPT should continue to allow community pharmacists to participate in the MOPD program by continuing the walk-in maintenance pharmacy feature of the program. This provision will ensure that patients with concerns regarding the mail-order pharmacy have an equally cost-effective means of purchasing maintenance prescriptions at community pharmacies.

• When re-procuring the outpatient prescription drug program, DPT should update, if appropriate, the performance standards to ensure that the Commonwealth's MOPD administrator is required to continue meeting the highest industry standards regarding safety and efficiency.