Weaknesses of how an offline (retrospective) Benefit program operates in the administration of the benefit plan. The "indemnity" system now employed by the Benefit Administration depends upon patient claims delivered well after the fact. This approach was probably instituted when no other solution was practical. Telephone eligibility is usually used to validate the patient, but there is no screening of the Rx for many factors that can improve medical efficay and, most important, optimum cost selection. Real-time, online processing of the PBM at the POS can cure these deficiencies.

IF AN OFFLINE SYSTEM IS OPERATING TODAY...

Some Insurance and Government Benefit Plans are operated as indemnity or point of service programs where service or dispensing is provided with payment requirements determined by the Provider.

The patient pays the provider in full for the product or service in accordance with the benefit sponsor's approval price schedule. The patient then collects proof of service and payment amount and then forwards this to the sponsor for reimbursement.

The sponsor has the advantage of a delay for payment after administrative processing but does not have the benefit of applying the most beneficial cost selection and intervention to optimize its costs.

            The missing ingredient to a well controlled (optimized) total system that minimizes waste, is the PBM's ability to prospectively intercept some aspects of fraud and over-utilization. This missing ingredient is provided by the PBM's POS Online system that screens the Rx ordered.

        The Rx is checked for eligibility, authenticity, therapeutic appropriateness, controlled levels of product and quantities of drugs based on the previous dosage.

       Refills are only allowed after the near expiration of the previous order used at the dosage rate prescribed for the drug in question.

            In summary, the current post-facto reimbursement approach is the unscreened dispensing portion of the system. The missing component of a controlled system is the “Before” dispensing surveillance provided by Internet, online PBM adjudication of an Rx for the specific patient standing at the POS counter.

            The online system is real-time and is capable of simultaneously tracking all authorized dispensing locations. The prospective (pre-dispensing) approach can manage the entire network of dispensing facilities in their entirety so that as Rx transactions occur, the system knows exactly what the entire system inventory is at that instant in time.

            Retrospective systems do not have screening capability to evaluate status of what has transpired until the next day (afterwards) when it is too late to correct any mistakes, innocent or otherwise.

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