Transparency is a word that gets tossed around a lot in healthcare and particularly when it comes to pharmacy benefits managers. So what does it really mean? And is transparency enough?
The word transparent has a few different definitions. One is “allowing light to pass through so that objects behind can be distinctly seen.” Another is “free from pretense or deceit.”
In the PBM model, a lot of companies use the word transparency to simply mean they tell customers that they’re going to keep rebate revenue or make spread revenue. Spread revenue is when the PBM keeps a portion of what the health plan pays them instead of passing the full amount on to the pharmacy. In that definition of transparency, they’re not disclosing how much they’re keeping, but simply acknowledging that they’re doing it.
In reality, that’s not true transparency. It’s more translucent, or something that allows some light to pass through but not enough to really see detailed shapes. You know something’s happening, but you don’t know the details.
A transparent PBM isn’t enough, in our opinion, and that’s why we’re transparent and pass through. We fully disclose our revenue streams and fees to our clients, and we don’t keep any spread. Any discounts we receive are passed on to the client or the pharmacy, and we’ll show our clients the rebate contracts so they can verify the numbers.
Our only revenue is the claims processing fee that we negotiate up front and put in our contracts. There are no hidden fees or hidden revenue anywhere else in the process.
When it comes to selecting a PBM, it’s important to ask the right questions up front to determine if the company is transparent and pass through or if they’re more translucent but claiming to be transparent. There are a lot of details involved in prescription drug pricing, and it can be challenging to figure out exactly what factors go into determining plan costs. Keep asking questions until you truly understand what you’re paying for and ask to see the rebate contracts that back up the pass-through pricing structure.
If supporting local business is important to you, also ask about the PBM’s relationship with pharmacies. Do they own a pharmacy where they’re referring business back to themselves as part of the plan? Do they push mail order prescriptions instead of driving business to a local community pharmacy? At MaxCare, we value our network of local community pharmacies and know they provide added value to plan members as well.
If you’re exploring options and seeking a truly transparent and pass through PBM, reach out to us today to talk about your needs.