the latest Health Benefits News from www.pef.org
Empire Plan Pharmacy Network Changes
On 9/26/09, the benchmark used to determine pharmacy reimbursement, known as “Average Wholesale Price” or AWP, was reduced by 4 percent as a result of a settlement in a class action lawsuit. This settlement is impacting all pharmacy benefit programs, including the Empire Plan Prescription Drug Program. For the Empire Plan, the AWP rollback will result in a cost savings. When determining the 2010 Empire Plan premium rates, United Healthcare (UHC), the Empire Plan Prescription Drug Program insurer, projected cost savings of at least $60M due to the AWP rollback.
Network of Empire Plan Participating Retail Pharmacies
To achieve these savings, the NYS Department of Civil Service (the state agency responsible for administering the Empire Plan) directed UHC, and its subcontractor, Medco, to create an Empire Plan-specific network of participating (par) retail pharmacies. UHC/Medco is now in the process of re-negotiating all of the existing contracts with the current par pharmacies. The new Empire Plan Network will become effective on 2/1/10.
As with any transition to a new network of par providers, there is the possibility that not all of the current par pharmacies will agree to join the Empire Plan Network. To ensure enrollees continue to have reasonable access to par pharmacies, Civil Service’s contract with UHC/Medco includes the following performance standards for access to par pharmacies:
Urban areas – 97% of enrollees have access to one network pharmacy within 3 miles
Suburban areas – 95% of enrollees have access to one network pharmacy within 5 miles
Rural areas – 95% of enrollees have access to one network pharmacy within 15 miles
As of 1/6/10, the new Empire Plan Network exceeded all of these access standards. In each geographic area, 99% of enrollees have access to one network pharmacy within the required distance. There are only two (2) big chains who have not signed (yet): Kroger and K-mart. All the other major chain stores, including CVS, Rite Aid, Walgreens, Wal-Mart, Price Chopper, Hannaford, Duane Reade, Tops, etc, have contracted to participate in the Empire Plan Network.
“Disruption” Letters Sent to Enrollees on January 20, 2010
If an Empire Plan enrollee’s network pharmacy is no longer going to participate in the Empire Plan as of 2/1/10, UHC/Medco must notify the enrollee in writing. On 1/11/10, UHC/Medco ran a report that identified the Empire Plan enrollees using one of the pharmacies that had not yet contracted with UHC/Medco to participate in the Empire Plan Network. On 1/20/10, UHC/Medco mailed these enrollees a “disruption” letter notifying them of the change in the participation status of their pharmacy. These letters will identify Empire Plan Network pharmacies located near the enrollee’s home, and will advise enrollees how to transfer their prescriptions to one of these pharmacies. Of the 1.2M total individuals enrolled in the Empire Plan, UHC/Medco expects to send approximately 30,000 disruption letters.
UHC/Medco is continuing to recruit all current par pharmacies to join the new Empire Plan Network. Therefore, even though UHC/Medco may not have contracted with the enrollee’s pharmacy by 1/11/10, UHC/Medco may have an agreement with the pharmacy by 2/1/10 when the new Empire Plan Network becomes effective. If UHC/Medco is unable to contract with the pharmacy by 2/1/10, the enrollee will receive the non-network level of benefits if s/he continues to use that pharmacy.
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If your pharmacy has not been contacted by Medco and wants to be in the network, they should contact Medco Provider Relations at 1-800-922-1557.
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Using a Non-Network Pharmacy
When enrollees use a non-network pharmacy, they are responsible for the difference between the amount charged by the pharmacy and the amount they are reimbursed under the Prescription Drug Program. In almost all cases, the enrollee’s out-of-pocket expenses will exceed the in-network copayment amount.
Enrollees who use a non-network pharmacy will have to pay for the prescription out of pocket at the time of purchase and then submit a claim for reimbursement to The Empire Plan Prescription Drug Program. Several factors affect the amount the enrollee will be reimbursed. If the prescription was filled with:
A generic drug, a brand-name drug with no generic equivalent, or insulin, the enrollee will be reimbursed up to the amount the Prescription Drug Program would reimburse a network pharmacy for that prescription as calculated using the Program’s standard reimbursement rate for network pharmacies less the applicable copayment.
A brand-name drug with a generic equivalent (other than drugs excluded from mandatory generic substitution), the enrollee will be reimbursed up to the amount the Prescription Drug Program would reimburse a network pharmacy for filling the prescription with that drug’s generic equivalent as calculated using the Program’s standard reimbursement rates for network pharmacies less the applicable copayment, which in most cases will be the non-preferred copayment level 3.
Mail Order Pharmacy Remains the Same
The new Empire Plan Network only affects independent and chain store retail pharmacies. Mail order pharmacy services will not be changing and will still be provided by Medco.
Assistance with Questions and Concerns
If you have any questions or concerns regarding the new Empire Plan Network, please contact Lorraine Simpkins at PEF headquarters, (518) 785-1900 or 1-800-342-4306, ext. 283.