RD344 - Analysis of Pharmacy Claims Data – September 30, 2016
This report is in response to Chapter 780, Item 85.H of the 2016 Virginia Acts of the General Assembly, which states:
“The Director of the Department of Human Resource Management shall analyze pharmacy claims data from the past biennium in order to assess the value of payments made to the state employee health program’s contracted third party administrators, and the value of payments made by the contracted third party administrators to their contracted prescription benefit managers (PBMs). The Director shall identify and report any difference in value in payments made to the contracted PBMs and payments made to the state employee health program’s contracted third party administrators and shall make recommendations to the Chairmen of the House Appropriations Committee and Senate Finance Committees by October 1, 2016.”
The Department of Human Resource Management (DHRM) has two third party administrators to administer the state health plans. DHRM has a contract with Anthem to administer the COVA Care and COVA HDHP plans, and Anthem subcontracts its PBM services to Express Scripts. DHRM has a contract with Aetna to administer the COVA HealthAware plan, and Aetna subcontracts its PBM services to CVS Caremark.
DHRM worked with Aon, the state program’s health benefits consultant and actuary, to conduct a review of pharmacy claims. Aon evaluated a statistically valid, random sample of records provided by each third party administrator documenting their payments to the PBMs.
Aon’s review indicated that there were no differences between the amounts that Anthem and Aetna were paid by DHRM and the amounts that Anthem and Aetna paid their subcontracted PBMs. Aon’s review findings may be found in Exhibit A of this report.
In order to understand the payment stream from the state health benefits program to the pharmacies, DHRM recommends that further analysis be conducted to identify any differences in the payments made to the PBMs by the third party administrators and the payments that the PBMs made to pharmacies under the state contract.