Introduction
This guide aims to provide a comprehensive understanding of Pharmacy Benefit Manager (PBM) policies and prescription drug coverage. Navigating the complexities of PBMs and their policies can be challenging, but with the right knowledge, you can make informed decisions about your prescription medications.
Understanding Pharmacy Benefit Managers (PBMs)
PBMs are third-party administrators that manage prescription drug benefits on behalf of health insurance companies, employer groups, unions, and government programs like Medicare and Medicaid. They negotiate drug prices with pharmacies and manufacturers, establish formularies (lists of covered drugs), and process prescription claims.
Formularies
Formularies are a list of prescription drugs covered by a health plan. PBMs develop and manage formularies, determining which medications are preferred, non-preferred, or excluded. Preferred drugs typically have lower copays, while non-preferred drugs may have higher copays or require prior authorization. Excluded drugs are not covered at all.
Tiered Formularies
Many PBMs use tiered formularies, which divide drugs into different price tiers based on their cost and therapeutic class. Generally, there are three to six tiers, with lower-tier drugs having lower copays and higher-tier drugs having higher copays.
Prior Authorization
Prior authorization is a process whereby your healthcare provider must get approval from the PBM before a prescription is filled. This is usually for non-preferred or costly drugs. The purpose is to ensure that the medication is medically necessary and to control costs.
Step Therapy
Step therapy, also known as fail first, requires patients to try a lower-cost medication before moving on to a more expensive drug within the same therapeutic class. This is done to control costs and ensure that less expensive treatments are tried before more costly ones.
Medication Therapy Management (MTM)
MTM is a service provided by PBMs to help patients manage multiple medications. This service includes medication reviews, education, and personalized medication therapy recommendations to improve patient outcomes and reduce costs.
Conclusion
Navigating PBM policies and prescription drug coverage can be complex, but understanding key concepts such as formularies, tiered formularies, prior authorization, step therapy, and MTM can help you make informed decisions about your prescription medications. Always communicate with your healthcare provider and pharmacist to ensure you are getting the best possible care and coverage.
