Mary Rosen, associate regional director of the U.S. Department of Labor (DOL) for New England including upstate New York, recently gave a presentation on common issues with health-care plans. She also described six tips for common plan errors and three new initiatives the DOL is working on.

Based upon common errors seen by the DOL, the six tips for health-care plan fiduciaries to consider are:

1. Carefully select and monitor service providers

• Document the process of selecting the service providers, including the data that was reviewed;
• Confirm that the fees and expenses paid a plan are reasonable;
• Monitor plan service providers.

2. Make required disclosures to participants and beneficiaries

• Make sure the summary plan description (SPD) is complete and written in plain English;
• Furnish the SPD to participants within 90 days of coverage; redistribute every five years;
• Distribute the summary of material modifications (SMM) or an updated SPD if material changes are made.

3. If a request for disclosure is made, disclose as much as possible

• Deliver disclosures by hand delivery, by U.S. mail, and by electronic delivery (if certain standards are met);
• Posting in a common work area is usually not enough.

4. Understand your plan and your responsibility

• Read and understand the plan document and the SPD;
• Follow the terms of the plan;
• Do not use personal discretion in interpreting the terms of the plan;
• Make sure claim procedures are followed, including time limits for response for claims.

5. Make timely contributions and monitor use of plan assets

• See safe-harbor regulation 2510.3-102;
• Relief can be granted under DOL Technical Release 92-01;
• Be aware of classification of the medical loss ratio rebate
• See DOL Technical Release 2011-04;
• Be watchful for prohibited transactions.

6. File reports with government and keep good records

• Form 5500 series return must be filed unless an exemption exists;
• If you hire a third-party administrator, make sure you understand what it is doing, as the duties to maintain records cannot be delegated.

Rosen in her presentation also described the following three federal Department of Labor health-care plan initiatives:

1. Health Benefit Security Project

A comprehensive national health-enforcement project combining the Employee Benefits Security Administration health-plan enforcement initiatives with the new protections under the Patient Protection Affordable Health Care Act of 2010.

2. Self-Funded Health Case Fees Initiative

This project seeks to uncover hidden fees in self-funded health plans. The project includes the review of fees commonly found in self-funded health plans including base medical service fee, recovery of overpayments, subrogation, corporate group and third-party revenue, medical-benefits drug rebate payments, stop-loss premiums and other fees and services.

3. Emergency Services Project

A project to determine if health-care plans are complying with the patient protection requirements of the Affordable Care Act regarding the coverage of emergency services. This project will identify large self-funded health plans that provide coverage for emergency services and determine if services will be covered and whether the plan is properly reimbursing for out-of-network emergency room visits.

Mary Anne Cody is a partner at Mackenzie Hughes LLP in Syracuse. Cody concentrates her law practice on financial-planning issues for businesses and individuals. Her areas of emphasis include estate planning, fiduciary compliance, and business tax and succession planning. Contact Cody at mcody@mackenziehughes.com. This Viewpoint article is drawn from the Mackenzie Hughes Blog, called “Plain Talk.”

Specialty drugs are high-cost prescription medications typically used to treat chronic conditions. Most often, they require specialty handling and administration by the dispensing pharmacy and prescribing physician.

At a glance
Complex Large Molecules and Biologic Drugs

• Biology-based molecules that structurally mimic compounds found within the body.
• High Cost per Prescription
• Average cost of $3,000 per month.

Special Handling and Distribution

• Temperature control
• Hazardous-materials considerations 
• Injection training 
• Risk evaluation and mitigation strategy (REMS) counseling 
• Data reporting

Multiple Dosage Forms

• Self-administered injectables
• Professionally-administered injectables / infusions
• Oral medications

Trends
The specialty-drugs market has experienced robust growth within the last five years, predominantly driven by average wholesale price inflation, increases in utilization / intensity, and new drugs entering the market. These factors have contributed to what today is estimated to be a 20 percent price increase for 2016, 2017, and 2018. What’s most startling is that while specialty drugs account for less than 1 percent of drugs dispensed for most employer groups, the corresponding spending makes up 25 percent of total costs, on average.

It is expected that specialty drugs will account for 40 percent of total drug spending by 2018. Furthermore, 40 percent to 50 percent of drugs in late-stage FDA approval are specialty drugs, representing potentially 200 new drugs in the next couple years. Thus, there is not a lot of relief on the horizon for employers and their benefit plans.

The role of the pharmacy benefit manager
Prior Authorizations — A strong pharmacy benefit manager (PBM) partner first helps clients manage the costs associated with specialty medications through a prior-authorization process. A robust prior-authorization process is intended to be used as a tool to ensure the medication is appropriate for the diagnosis. Along with requiring documentation demonstrating medical necessity, case reviews should also be done to be sure other options, where appropriate, have been tried. In some cases during the prior-authorization process, reviewers will identify an opportunity where possibly an alternative medication should be considered. Your PBM should then work with the physician to discuss the option(s) to see if they are appropriate for the patient.

Clinical Review / Intervention — In some instances, medications will be prescribed for conditions or at dosages outside of what is currently FDA-approved. Unless substantiated by convincing and proven medical and/or clinical data, these medications are considered experimental in nature in the treatment of the particular diagnosis and will be denied. In these cases, your PBM should conduct an in-depth review of the medication and evidence available before deciding whether the medication will be approved or denied. If the medication is in fact denied, a written letter explaining the denial is sent to both the physician and plan member. This letter should also outline the process of appealing the decision should the physician decide to do so. This extension of the prior-authorization process ensures that the right medication and dosage is selected for each patient.

The role of the dispensing specialty pharmacy
Clinical management — Your partnering specialty pharmacy should provide clinical-management programs that are designed to increase compliance and adherence to therapy. The clinical staff should have extensive training regarding the monitoring of side effects and manufacturer policies for each specialty medication that is dispensed. The goal of these programs is to educate patients on the medications they are taking, prevent adverse effects, identify potential side-effects, and promote overall health and wellness.

Comprehensive programs — Comprehensive programs should start with a basic assessment of each patient. From there, additional educational materials are identified that may help support a patient’s adherence to their medication regimen. At the same time, a patient can be scheduled for a follow-up assessment by a registered pharmacist or registered nurse. These follow-up assessments often take place at the time of coordination for delivery of the patient’s next refill, and they can also occur at an appropriate frequency based on the needs of the patient and/or the plan.

Robust fulfillment & delivery — The ideal specialty pharmacy will provide a full benefit and co-pay assistance investigation with every script that is filled. Value-adds include: free ancillary supplies such as sharps containers, syringes, alcohol swabs, and bandages. Due to the complexities of some specialty drugs, your specialty pharmacy should ship packages for next-day delivery to your home, physician’s office, or place of work.

Erison Rodriguez is the regional sales and marketing director for ProAct, Inc. — a pharmacy-benefit management company headquartered in DeWitt. It is a division of KPH Healthcare Services, Inc., which also operates Kinney Drugs. Contact Rodriguez at ErisonRodriguez@ProActRx.com