How to Navigate Pbm Challenges

Here’s a comprehensive list of #objections you might face from a large vertically integrated medical carrier when you're proposing a carve-out of the #PBM (Pharmacy Benefit Manager) on a self-funded commercial healthcare plan, along with suggested responses from the employer's perspective: 1. “You’ll lose integration and coordination of care.” 🛑 Objection: “Carving out the PBM breaks the integration between medical and pharmacy, which reduces our ability to manage overall care and outcomes.” ✅ Employer Response: “We can share data between the medical and carved-out PBM partners through secure integrations. Many high-performing PBMs already integrate with medical carriers to support care coordination.” “In practice, your coordination hasn’t produced the clinical or financial outcomes we need—so we’re evaluating partners with more transparency and performance accountability.” 2. “You’ll lose discounts and rebates by leaving our PBM.” 🛑 Objection: “Our scale gives you the deepest manufacturer discounts and rebates. You’ll pay more outside our network.” ✅ Employer Response: “We’ve reviewed pricing with independent PBMs who disclose true net cost. When we compare total cost of care—including spread pricing and retained rebates—we believe we can do better outside your model.” “The lack of rebate transparency with your model makes it difficult to evaluate whether we’re receiving our full value.” 3. “Disruption to members will be significant.” 🛑 Objection: “Your employees will face confusion and disruptions to their medications, support services, and pharmacy access.” ✅ Employer Response: “We are prioritizing member communication and change management with any transition. The new PBM offers white-glove support to ensure a smooth experience.” “Maintaining the status quo due to fear of disruption doesn’t align with our fiduciary responsibility to manage healthcare costs effectively.” 4. “You’ll lose our clinical programs and utilization management.” 🛑 Objection: “Our integrated clinical programs, like prior authorization and disease management, rely on our full ecosystem.” ✅ Employer Response: “Independent PBMs offer robust and customizable clinical programs, often with better outcomes, fewer barriers to care, and greater member satisfaction.” “We can still integrate pharmacy and medical data to maintain these services—or implement even more innovative solutions tailored to our population.” 5. “Administrative burden will increase for you.” 🛑 Objection: “Carving out pharmacy will add complexity to your benefits administration, reporting, and vendor management.” ✅ Employer Response: “We’re working with a benefits consultant/TPA with deep experience managing carved-out models. The additional oversight is worth it for the cost savings and transparency.” “We want partners who provide proactive support and transparency—not ones that hide behind complexity as a reason not to improve performance.” #pharmacy #healthcare #commercialhealthcare

Change is hard and it’s even harder for systems and processes that have been set on cruise control for decades. For most employers, managing the healthcare spend means ‘going out to market’ once a year and expecting bad news. Most employers fully believe that there’s nothing they can do to stem the relentless tide. Many employers have started to realize that, perhaps, there are things that they can and should do to change the trajectory of their plans. Having spoken with many ‘first followers’ in this space, the reason for changed behavior differs between the parties and personalities. Many employers start to look at things out of fear for not being in compliance. Others start to look at things because their plan no longer attracts employees the way that it did in the past. Others change their behavior because they’ve seen others do so…and achieve results. This week, we worked with an employer who, through some detailed analytics, suddenly discovered that they were ‘missing’ 500K in rebates that were due the plan. It caused them to want to learn more and to do more. The attached piece goes through some of the prominent breach of fiduciary duty lawsuits in the news cycle. More important, it offers up sage advice especially for employers starting their changed process focused on PBM: “Historically, employers have treated PBMs as black boxes: complex pricing algorithms, confidential rebate arrangements, and limited audit rights are common. But these very features are what plaintiffs are now attacking. When employers fail to understand or oversee how PBMs set drug pricing or apply rebates, plaintiffs argue they are abdicating fiduciary responsibilities. The solution isn't litigation-proofing; it's visibility. Employers should be regularly auditing PBM performance, reviewing claims data, negotiating for full rebate pass-through, and benchmarking drug prices. Even if they ultimately delegate pricing decisions to a PBM, fiduciaries must prove they monitored the arrangement with diligence.” There are simple tools and solutions available to employers to do this analysis and to furnish insight. Those who go through this process quickly come to discover how they’ve been taken advantage of and see the opportunity for substantial savings and accountability. And finally, the conclusion of the piece is important: “For plan sponsors, the message is clear: if you're not auditing your PBM, you may already be behind. Waiting for a lawsuit is no longer a strategy. Transparency, monitoring, and documentation are now not only good business—they're potential legal lifelines.” #employeebenefits #employers #healthbenefits #fiduciary #PBM #compliance #accountability Christine Arnold Raju Kattumenu 🎙Spencer Smith, CSFS® Doug Aldeen Julie Selesnick Peter Hayes Chris Deacon Stuart Sutley Marion Couch Josh Spivak Justin Leader Justin Venneri Patrick Long Jamie Greenleaf AIF, CBFA, C(k)P Dean Jargo Brian Klepper Phil Harrison

𝐀𝐥𝐢𝐠𝐧 𝐲𝐨𝐮𝐫 𝐡𝐞𝐚𝐥𝐭𝐡 𝐢𝐧𝐬𝐮𝐫𝐚𝐧𝐜𝐞 𝐩𝐥𝐚𝐧 𝐰𝐢𝐭𝐡 𝐩𝐚𝐫𝐭𝐧𝐞𝐫𝐬 𝐭𝐡𝐚𝐭 𝐡𝐚𝐯𝐞 𝐲𝐨𝐮𝐫 𝐛𝐞𝐬𝐭 𝐢𝐧𝐭𝐞𝐫𝐞𝐬𝐭 𝐢𝐧 𝐦𝐢𝐧𝐝 When you understand how the partners within your health insurance plan get paid, you understand their incentive structure. Understanding this piece is one way to effectively navigate who you choose to partner with. It's not the only way and it won't hide the disguise of a crappy vendor who just happens to have a great fee structure, but it's a data point in the process of evaluating a new vendor partner. Here are 3 examples: 1.) Insurance broker gets paid by pharmacy benefit manager (PBM) to be on their "panel" of PBMs they use. Proven Result: only those PBMs ever get presented to an employer. 𝐀𝐜𝐭𝐢𝐨𝐧 𝐭𝐨 𝐭𝐚𝐤𝐞 𝐭𝐨𝐝𝐚𝐲: Ask your broker to disclose any and all revenue they are earning from your PBM. If they are earning money you didn't know about and you are seeing the same PBMs presented every year, you've identified a problem that has a solution. 2.) Pharmacy benefit manager (PBM) or Consortium gets paid a % of the cost of every drug filled. Proven result: Programs that are available to reduce costs will be prohibited. Programs like patient assistance programs where people qualify for free drugs (based on income thresholds) or international sourcing where specialty meds are often 1/2 the price. 𝐀𝐜𝐭𝐢𝐨𝐧 𝐭𝐨 𝐭𝐚𝐤𝐞 𝐭𝐨𝐝𝐚𝐲: Ask if these programs are available with your PBM. If these programs are not available, you've identified a problem that has a solution. 3.) Primary care physicians are paid every time they have an encounter, coupled with the fact their reimbursements are not increasing. Proven result: They have to see more patients to stay afloat, resulting in less time with a patient, more referrals to specialists, more scripts prescribed, more forgone care etc. 𝐀𝐜𝐭𝐢𝐨𝐧 𝐭𝐨 𝐭𝐚𝐤𝐞 𝐭𝐨𝐝𝐚𝐲: Survey your employees and ask them how long it takes to get an appointment with their PCP and how much time they physically get with that PCP when they have an in person visit. If the survey results are abysmal, you've identified a problem that has a solution. These are 3 actual examples I've seen over and over in my career. The results do not benefit the employer or the patient. But each scenario also has a solution to the problem identified. Employers, feel free to use these examples to take some action today. #RemodelBenefits #Align #Compensation #ceo #cfo #hr #humanresources #employeebenefits #healthinsurance