In the past several weeks, PillarRx has been asked to help plan administrators better understand their medical benefit vs pharmacy benefit, as well as explaining which services could potentially fall within both contracts. In this blog post, we review medical and pharmacy benefits, the differences between each plan type, and how your bottom line could be negatively affected if claims are mis-adjudicated.
What Services Fall Within Each Healthcare Benefit?
Pharmacy Benefits – these services require a prescription following a doctor’s diagnosis. Prescriptions are obtained by a licensed prescriber and dispensed at a retail or specialty pharmacy, or if allowed under the plan’s contract, through mail order.
Medical Benefits – services are not covered under the pharmacy benefit. These include services such as doctor visits, physical therapy, and surgeries.
What is the Main Difference Between Pharmacy and Medical Benefits?
Pharmacy benefit claims are processed through a PBM (Pharmacy Benefit Manager).
Medical benefit claims are processed through a Third-Party Administrator (TPA) or Medical Carrier.
What if Our Claim is Not Correctly Adjudicated?
As an example, since Specialty Drugs administration and associated costs can either be considered part of your pharmacy or medical benefit, it’s important to review your company’s contractual agreements. Knowing the obligations of your carrier and/or PBM can help you monitor utilization and financial impact trends. If you see an increase in overall drug spend (medical plus pharmacy), there’s a distinct possibility your specialty drug claims are not being properly adjudicated. In this case, you may want to perform a J-Code Analysis to validate specialty drug cost management.
Need to talk in greater detail about medical vs. pharmacy benefits? Contact us at [email protected]