The 21st century has realized a new business paradigm that is just as revolutionary as the industrial revolution of the 19th century. The Internet in the few years since its inception has changed business and trade to such a degree that it probably can be credited with the substantial increases in national productivity despite a contrary inflationary influence. PBMs are just a small aspect of that global improvement in productivity. The key to all this major escalation is that all transactions can now be viewed immediately with data validating  compliance with the standards that have been established for such transaction (rather than post-facto validation or the lack thereof.

WHAT IS A PBM?  HOW IT OPTIMIZES A BENEFIT PLAN

PBM is an acronym for the expression Pharmacy Benefit Management. The PBM idea and reality emerged in the early 1980s in the United States by a Pharmaceutical Distributor for the purpose of controlling costs for Insurance companies that were experiencing rapid escalations in costs that elevated insurance premiums for Drug Benefits beyond tolerable limits.

            The PBM systems are based on a simple idea that the procedure completely inspects and assesses each Rx transaction in advance of dispensing the prescription. The PBM program was so successful that  the vast majority of the medical insurers converted to the Distributor’s PBM system within two years following the first applications.

            The idea was not really unique. It was an adaptation of the VISA, Mastercard model introduced early in the era of emerging telecommunication technologies provided by IBM 1970 mainframe systems. With the availability of high-speed data communications and interacting computers, credit card and banking transactions were conducted almost exclusively by these real-time, online systems that instantaneously confirmed and corroborated the transaction's eligibility, appropriateness, and authenticity.

            The PBM computer software was able to address the following major transaction issues:

• Current benefit Plan eligibility of the Rx recipient;
• Availability of the drug prescribed and allowed by the Plan;
• Appropriateness for the recipient based on gender, age and other drugs used;
• Determination of the price charged, the Co-Pay required, and the POS Dispensing Fee due the Pharmacy;
• Limitations of Rx for Price, Plan Deductibles Days-Supply, Quantity, Drug Interactions, Strength, etc.
• Calculation of Amount paid to Pharmacy, Co-Pay paid by Buyer and the net cost to Sponsor.

As each year went by new and complex restrictions were devised and implemented to optimize the cost to the Sponsor and for improving therapeutic efficacy.

            Initially these functions required very expensive mainframe computers that were not cost justifiable by the Benefit Sponsors. This led to the creation of service organizations that act as a processing third party between the Client Sponsor and a network of participating drug stores.

            The PBM contracted with the recruited pharmacy network and acquired discounts from them in order to participate in the network. The discounts were partially passed on to the Benefit Sponsor. The PBM service operator was reimbursed for service by the Benefit Sponsor and from small price differentials negotiated with the Provider Pharmacies.

As Insurance companies increased their drug benefit programs and as computers and the PBM software became more affordable, many eliminated the intermediary, third party PBM and installed their own PBM systems and directly managed their own benefit plans.  

(The PBM system available from DpRx can be viewed in greater detail by visiting the website www.teleclaim.net. )

            A brief overview is given here of the DpRx TeleCLAIM PBM system and its features:

"PlanBuilder" - Benefit Plan Creation Module: This is a simple-to-use online module that enables Administrators and Pharmacists to quickly create Custom Benefit Plans by a "fill-in-the-blanks", select by clicking a formula procedure, etc. This facility does not require any computer coding knowledge.

This benefit plan developer tool enables many individual specialized plans by group or individual. Ten "pages" of plan limitation issues are completed by the screening (adjudication) of each Rx for restrictions and limitations of drugs and calculation of cost to the Sponsor, Patient and the Store Provider. An important element to adjudication is the creation of specialized "formularies" that designate a limited array of drugs by class that will be applied to the group or individual.

TeleCLAIM Adjudication Processor: This module processes each Rx transaction applying a particular customized Benefit Plan (created by PlanBuilder) to analyze compliance to all the parameters designated for that particular Benefit Plan. Absent any indications of non-compliance, the module delivers an approval for dispensing the Rx to the POS module containing the charges due, if any, dispensing fee, and the amount due for reimbursement to the Drug Store Provider.

TeleRx POS Module: This module provides the data interaction occurring between the Adjudication module and the POS terminal connected to the Internet. The POS terminal (simple PC) operates within the control of a popular Browser (e.g. MS Explorer) using Internet protocol (TCP/IP). Attached label printer provides an Rx info label to affix to the drug container provided to the patient recipient.

TeleVISTA Module: This module provides Internet access to 38 drill-down reports of utilization designed for use by Plan Administration, Sponsor Management for performance analysis, Physicians, and the Drug Store providers. The latest security tools are used to manage the authorizations for selective access by the participating professionals as designated by the system Administrators.

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