TPharm
Written by Tom Marlowe
The TRICARE Management Activity (TMA) will introduce significant new benefits to beneficiaries of its pharmacy services this year as it combines separate mail order pharmacy and retail pharmacy contracts into one new contract. The old contracts—the TRICARE Mail Order Pharmacy (TMOP) and the TRICARE Retail Pharmacy (TRRx)—will expire at the end of their five-year cycles to make room for a new contract known simply as TRICARE Pharmacy (TPharm).
The Department of Defense released a solicitation for the new contract in February 2008 and awarded it on June 27, 2008, to Express Scripts Inc. of St. Louis, Mo., the pharmacy benefits management company that already held the TMOP and TRRx contracts through separate competitions. The fact that Express Scripts won the new contract while holding its two predecessor contracts should assist with a smooth transition into new services, Rear Admiral Thomas McGinnis, TMA’s chief pharmacy officer, told Military Medical Technology. “It should be a lot smoother that Express Scripts won this contract, and that wasn’t necessarily going to be so,” McGinnis commented.
“We did put in a three-month gap in startup. The mail order portion of the TPharm contract is to start up on September 1, 2009. Then we left a gap until December 1, 2009, to start up the retail portion—just in case someone new had won it. The three-month period with starting one and then starting another was so that someone brand new to the process wouldn’t have to start everything up at once.”
The inspiration for combining the mail order and retail contracts into one came from observations that commercial insurance companies essentially were doing the same thing, McGinnis said. In the past, defense officials suspected that different bidders might compete for the mail order and retail pharmacy businesses, somehow bringing different efficiencies to the two separate processes. Instead, TMA discovered that the same contractor emerged as the most successful bidder on TMOP in 2003 and TRRx in 2004.
In addition, separate systems along with separate call centers cost the federal government more money than one combined system would. “The cost issue is the most important thing. We are trying to control those costs through whatever mechanisms we can in order to sustain this great benefit that we have,” McGinnis acknowledged. But the TPharm contract also will offer new benefits and flexibilities to U.S. military servicemembers, who will benefit from the efficiencies gained from combining mail order and retail operations under one contract.
SPECIALTY PHARMACY
One key new benefit being added to TRICARE pharmacy services are specialty services for pharmaceuticals that require more attention than others, McGinnis revealed. TMA again observed the trend among commercial insurance companies to add the benefit and followed suit. “These types of services are limited to specific specialty pharmaceuticals, which are considered high-cost or what we call high-touch drugs,” McGinnis explained.
“With high-touch drugs, there needs to be some contact with beneficiaries taking these types of medications to make sure they are taking them. If they don’t take them, they could wind up in the emergency room or end up in the hospital, which is very costly to the insurance program. “So we are adding this specialty service to the mail order pharmacy,” he added. “The objective is to increase beneficiary compliance and subsequently increase beneficiary outcomes with these high-cost drugs.
Better compliance will lead to better outcomes. Patients will stay healthy, stay out of the emergency room, or [avoid being] admitted to the hospital.” TMA will encourage specific beneficiaries in certain disease management programs to enroll in specialty services. Those disease management programs include treatments for diabetes, cardiovascular disease, asthma and other disorders that require strict adherence to prescribed therapy for patients to remain healthy, McGinnis elaborated.
At Express Scripts, experts are working hard to ensure that new benefits, such as specialty service, are ready on time as specified. Nancy Gilbride, vice president of Express Scripts’ TRICARE Pharmacy Division, has responsibility for managing the company’s new and legacy services to TMA. Express Scripts has managed to deliver significant cost-savings to military beneficiaries through its management of services under TMOP and TRRx, and it will continue to do so through the addition of new services, Gilbride told MMT. “We are certainly very excited to see the new contract’s focus on specialty pharmacy,” Gilbride remarked. “In 2007, we saw a 14 percent increase on specialty drug trends. The amount that payers spent for specialty across our client base increased 14 percent in 2007.” By contrast, the cost of non-specialty medications increased only 4.7 percent that same year, Gilbride reported. Express Scripts forecasts that specialty drug payments will increase by 18 to 21 percent annually through 2011.
MEMBER CALL CENTER
Express Scripts currently offers beneficiaries access to a Member Choice Center (MCC), which TPharm will expand upon, McGinnis said. The MCC stood up in 2007 with a goal of converting retail prescriptions to mail order prescriptions. Mail order prescriptions provide convenience to beneficiaries, who do not have to travel to pick up their medications, and save money for the U.S. government, which does not have to pay additional staff at retail pharmacies to dispense drugs to all military personnel in person.
The goal of the MCC in its first year was to convert 60,000 prescriptions from retail to mail order, but it exceeded that goal significantly—converting 112,000 retail prescriptions instead. The mail order drugs are more affordable for beneficiaries, who saw a collective savings of about $1.7 million in co-payments, McGinnis declared. DoD saved about $20.2 million from the conversion because it too gets better prices through the mail order pharmacy side of pharmacy services.
“We incorporated that into this new contract also,” McGinnis noted. “That will be an ongoing thing where beneficiaries can call the Member Choice Center and have the pharmacist there call their local retail pharmacy or even call their doctor and get their prescription transferred to the mail order pharmacy, and then it’s delivered to their home. “With the gas prices going up there for a while, a lot of beneficiaries were using this, where it was delivered right to their homes instead of having to get into their cars and go downtown to pick up their refills,” McGinnis said.
Outside of the MCC, the new contract offers other opportunities for beneficiaries to receive their prescriptions by mail order. Sometimes travel to a military treatment facility may not be convenient for a servicemember who has a retail prescription, so TPharm allows for flexibilities for beneficiaries to receive their medications, particularly for prescription refills, at home. “That’s especially important as we go through redesigns and construction at these military treatment facilities like Brooke Army Medical Center in San Antonio and at Bethesda Navy Hospital,” McGinnis said. “It can be tough to get onto base; it’s tough to find parking; and pharmacies are busy. So if the patient didn’t want to drive onto base and if they wanted their refills to be delivered to their home, we are setting up a way to do that electronically with the beneficiary.” So beneficiaries could electronically transfer their prescriptions from a military treatment facility (MTF) to the mail order pharmacy once TPharm takes effect.
Gilbride agreed that increased flexibility for transferring prescriptions to the mail order pharmacy is one of the top innovations of TPharm. “We are actively converting prescriptions from retail to mail. That has incredible value for all parties,” she explained. “There is a requirement in the TPharm contract to make our MCC services available for those MTF prescriptions to convert those. Beneficiaries can go on our Website and request that transfer. Those services will be available to beneficiaries that are receiving prescriptions from the MTF.”
At the same time, Express Scripts looks forward to enhancing pharmacy service at military treatment facilities, Gilbride emphasized. The company is examining options for placing its pharmacists and other representatives directly into military treatment facilities so that they would be available to answer questions, particularly questions about transferring prescriptions to mail order.
Meanwhile, TPharm also transfers responsibility for full claims adjudication to its prime contractor. Currently, a third-party processor handles most pharmacy claims. As such, Express Scripts does not have ready access to all of the information about its customers’ drug histories. “Express Scripts will be assuming that function, so we will have full visibility and constant visibility into the prescription drug histories of the beneficiaries. We can do an incredible amount with that information in terms of educating beneficiaries and letting them know of cost-savings opportunities,” Gilbride noted. Such cost-savings opportunities may involve transferring prescriptions to mail order as available.
WINNING BID
The TPharm request for proposals (RFP) carefully spelled out these new requirements—and it provided defense officials with the ability to judge the bidders’ capabilities to meet the requirements through a careful focus on the companies’ capabilities.
The RFP outlined four evaluation criteria, including technical evaluation, proposal risk, past performance and price. “The first three factors were much more important than the price when considering the bids,” McGinnis said. “The government was looking for the best value, with all of the other factors combined being significantly more important than price. The bottom line was the best overall value to the government and its beneficiaries.”
The RFP was exhaustive enough to ensure that Express Scripts would not automatically win the new contract. Companies like Medco and CVS Caremark had strong backgrounds to provide tough competition for the contract, McGinnis said. TPharm also includes strong performance metrics to ensure that Express Scripts meets the requirements of its military customers. “For retail network access, for example, they have to meet a minimum number of pharmacies in the network within a certain geographic location where beneficiaries are located. If they exceed that by a certain percentage, there are monetary awards tied to that. Currently, we have 60,500 pharmacies in our network. That’s every pharmacy in the country. So Express Scripts does get an incentive award for providing that number of pharmacies to our program. That’s carried over into the new contract,” McGinnis commented.
The mail order pharmacy operation also has performance metrics. To meet those goals, Express Scripts must receive prescriptions, process them and get the medications into the mail within a certain number of days. Again, the company receives a monetary bonus if it can beat the goal. The company also earns awards if it can process paper claims quickly, meet prior authorizations properly, and deal with medical necessities swiftly.
EXCEEDING GOALS
The contract personnel at Express Scripts are confident that they will exceed their goals. Gilbride has a dedicated and experienced transition team working every day on implementing the parameters of the new contract and changes in pharmacy network requirements, network claims auditing, specialty pharmacy services, Website services, home delivery services, the new claims adjudication system and other requirements, she said. “The list is long so we have assembled an experienced and dedicated team who are focused on making sure we bring those requirements up successfully. This is not new to us as a company. We implement commercial contracts all of the time. There are a lot of unique requirements and we need dedicated resources to ensure success,” Gilbride said.
Part of the inspiration for Gilbride’s confidence in her company’s capabilities comes from its quarterly satisfaction ratings from DoD. On average, Express Scripts maintains better than a 96 percent satisfaction rating from military beneficiaries. “As I understand it, it is the highest rating that any of the TRICARE contractors have in the programs they administer, so we have delivered strong performance,” Gilbride stated.
In implementing the new contract, the Express Scripts transition team talks to TMA every day about their joint project plans and specific activities. The company tracks its progress against key milestones and opens lines of transparent communication whenever it encounters opportunities or challenges, Gilbride said. “There are new elements and new features and benefits being added, and there are also some changes being made to existing features,” Gilbride commented. “We will roll out an extensive communication campaign in conjunction with the TRICARE program to make sure all of the beneficiaries are aware of those changes. About 45 days in advance of the program going live, we will start to communicate those changes to the beneficiaries.”
For example, TMOP and TRRx offer separate toll-free numbers to call if beneficiaries have any questions. TPharm integrates the separate call centers under those contracts into one with one phone number. As part of the communications campaign, Express Scripts will inform beneficiaries of the new toll-free number to call regardless of whether they have questions related to a retail prescription, a mail order prescription or other services. “In combining the two contracts, we are integrating all of the components, so any question about any medications beneficiaries may have will be answered through one call if they go to a retail pharmacy, if they use mail or if they need a specialty medication,” Gilbride said. “All of our systems will be fully integrated.” ♦