Pharmacy Network Segmentation for Cost Reduction
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Solution Overview
Problem
Pharmacy benefit managers face challenges in efficiently managing pharmacy provider networks for acute and maintenance medications, leading to higher costs and inefficiencies in prescription drug reimbursement and patient care.
Innovation Solution
The implementation of a system that classifies prescriptions as either acute or maintenance medications, associating them with specific pharmacy provider networks to optimize reimbursement rates and reduce costs through the use of a pharmacy provider network subsystem, which includes modules for data access, analysis, classification, network determination, transition, and adjudication.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Device complexity
If a single pharmacy provider network is used for all prescriptions, then network management is simplified, but reimbursement rates become less competitive and costs increase
Solution Approach 1:
The patent divides the pharmacy provider network into separate acute pharmacy networks and maintenance pharmacy networks. This segmentation allows each network to be optimized for its specific medication type, enabling more competitive reimbursement rates for maintenance medications while managing acute medications through a different network structure.
2Loss of energy
If separate pharmacy provider networks are created for acute and maintenance medications, then reimbursement rates become more competitive and costs decrease, but system complexity increases
Solution Approach 1:
The patent introduces a pharmacy benefit manager as an intermediary that automatically classifies prescriptions into acute or maintenance categories and routes them to the appropriate pharmacy network. This intermediary handles the complexity of network management, allowing pharmacies and patients to benefit from the segmented structure without directly managing the complexity.
Solution Approach 2:
The system changes the parameter of pharmacy network selection based on prescription classification. By dynamically determining whether a prescription is acute or maintenance-based, the system automatically applies different reimbursement rates and network rules, optimizing costs without requiring manual intervention.
3Productivity
If prescriptions are not classified by type, then processing is faster and simpler, but reimbursement efficiency and cost management deteriorate
Solution Approach 1:
The patent implements preliminary classification of prescriptions into acute or maintenance categories at the time of submission. This preliminary action enables the system to automatically route prescriptions to the appropriate pharmacy network before adjudication, maintaining fast processing speeds while optimizing reimbursement rates through proper classification.
Data Source
AI summary
Methods and systems for maintaining pharmacy provider networks are described. In one embodiment, claims adjudication data associated with a member and a prescribed drug is accessed. The prescribed drug associated with the member is classified as one of an acute medication and a maintenance medication. A pharmacy provider network is associated with the prescribed drug based on, at least in part, classifying the prescribed drug. It is determined if a pharmacy associated with the claims adjudication data is included within the pharmacy provider network associated with the prescribed drug. A pharmacy claim may be adjudicated for the prescribed drug based on the claim and the pharmacy provider network. Additional methods and systems are disclosed.