The importance of utilization management within the medical benefit

Medications being billed through the medical benefit and not the pharmacy benefit have always presented challenges to health plans. As more expensive specialty drugs make it to market, it’s becoming increasingly important for plans to have the right strategies in place to not only administer the drugs appropriately, but to be able to afford them and offer them to members. Sometimes, their lives depend on it.

The impact of the drug pipeline on drug trend

Medications billed through the medical benefit typically are specialty medications, often including high-cost oncology drugs or gene therapies, which means that many plans will require assistance in covering them. Some of the gene therapies in the upcoming pipeline are priced as high as $3.5M. Outside of gene therapies, nearly half of all new drug approvals from the past two years were priced above $150,000, continuing to put pressure on a health plans’ ability to afford them for all members of their plan.

Most health plans have protections in place for their pharmacy benefits, like utilization management (UM) and step therapy, but it’s rare for these protections and strategies to be applied with the same rigor to medications billed through the medical benefit, especially since it’s common for these medications to be administered before a claim is submitted. This could be because health plans don’t outsource management, opting instead to handle these tasks internally, or have limited automation in place, resulting in less checks and balances.

In the next few years, the FDA expects to approve 84 new specialty drugs¹ that could be billed through the medical benefit. This includes 30+ new gene therapies¹ and 50+ new high-cost specialty drugs¹.

With these new medications forthcoming, it is important that plans evaluate current strategies, while evolving to ensure lower costs and member access to these life-changing medications.

How health plans can use utilization management to improve health outcomes and costs

There are many different strategies for managing medications billed through the medical benefit, but one of the most important is UM since it ensures safe and appropriate use of high-cost specialty drugs through consistent application of approvals, while ensuring access to the right drug for the right member at the right time. For example, 5% of drug claims without UM policies are prescribed for off-label use or doses above the maximum recommended dose², resulting in waste.

Based on our own analysis, plans with no UM for specialty medications paid an extra $6.28 per member per month (PMPM)³.

There are many different strategies for effective utilization management that can be leveraged together or separately:

• Monitoring of the drug pipeline, particularly for specialty medications that are likely to be billed through the medical benefit and updating policies to cover them and provide access to members
• Medical review by clinical experts, to determine if these new medications and/or their corresponding doses are necessary or effective compared to other, lower-cost options
• Site of service strategies to optimize the appropriate site of care, while ensuring clinical integrity and reducing expenses
• Robust communication surrounding these new drugs, including proactive provider communications and member outreach to educate them on administration and treatment, while reducing the time to treatment
• Compliance support for comprehensive alignment across dynamic regulatory and accrediting requirements

Health plans can choose to implement some or all of these strategies themselves to be best prepared for the upcoming high-cost drug pipeline, but the right partner can not only improve and automate these processes, they can more proactively manage them to improve access and affordability for plans and their members.