The University will select and announce a new pharmacy benefit manager in late spring 2002 to manage the prescription drug portion of all its medical insurance plans. Prescription drug coverage no longer will be provided through University medical plans but through a separate pharmacy benefit plan.
Faculty, staff, retirees and their dependents will retain access to a comprehensive program when the University secures an external pharmacy benefit manager to administer its prescription drug program. Access to the same prescription drugs currently available will continue. In addition, it is expected that everyone will have the same pharmacy benefit plan regardless of the medical plan they choose. Some cost savings also are expected.
Beginning Jan. 1, 2003, prescription drugs can continue to be purchased through the network of more than 50,000 retail pharmacies or through the new expanded mail order service. All faculty, staff, retirees and dependents will receive a new prescription drug card. The University anticipates that the change in pharmacy benefit management will proceed with minimal disruption to faculty, staff, retirees and their dependents.
Over the past two years, the University has been studying prescription drug coverage and costs to determine the most effective means to maintain and enhance coverage while controlling costs that collectively impact employees and the institution. The Prescription Drug Work Group 2002 examined the current situation and presented options for the executive officers to review. Extensive input was gathered from the University community through focus groups, public hearings and a dedicated e-mail address. Educational articles appeared in the University Record, and a Web site provided information at www.umich.edu/~benefits.
After careful consideration of the Work Groups report, and extensive discussion and correspondence with the Senate Advisory Committee on University Affairs (SACUA), the decision has been made to consolidate pharmacy purchasing under a single pharmacy benefit manager.
Double-digit increases in pharmacy costs are expected to continue. However, the new design provides an opportunity to contain future growth in pharmacy costs and maintain a quality benefit for U-M faculty, staff, retirees and their dependents.
At the direction of the executive officers, an Oversight Committee will be established to determine future plan design, monitor quality assurance and outcomes, ensure privacy protection of individual information, and review which drugs are included on the preferred and the non-preferred drug lists. The committee will establish pharmacy management programs that will assist with improving patient care and reducing unnecessary cost.
Unlike most organizations, the University has the internal resources to create a unique working relationship with a pharmacy benefit manager. The Oversight Committee will capitalize on the expertise and experience of faculty and staff across campus. At least one member will be appointed in consultation with SACUA or the Committee on the Economic Status of the Faculty (CESF).
The Oversight Committee will review covered and excluded drugs, and recommend changes for consistent coverage for all participants in the Universitys pharmacy benefit plan.
Highlights of the New Plan
The following highlights of the new pharmacy benefit plan apply to all participants who are enrolled in medical plans other than Blue Cross Blue Shield of Michigan/United:
Co-PaymentsThere will be a three-tier co-payment for prescription drug purchases. The three tiers include:
It is estimated that only 510 percent of all drugs may be selected for the non-preferred list. Criteria will be developed to determine non-preferred drugs based on safety, efficacy and cost.
This program offers members a range of options, including the opportunity to take advantage of the $7 discounted co-payment when a generic drug is available, or to pay $24 if the drug is on the non-preferred drug list. The vast majority of brand medications will be available on the preferred brand list. Approximately 40 percent of all medications purchased are generic drugs.
Blue Cross Blue Shield of Michigan/United Major Medical Participants
New convenience, expanded coverage and the above out-of-pocket maximum safety net improve the prescription drug portion of the Blue Cross Blue Shield of Michigan/United Major Medical plan (BCBSM/United).
Faculty, staff and retirees enrolled in BCBSM/United pay a 20 percent co-insurance amount on prescription drug purchases, which will continue. Therefore, the BCBSM/United prescription drug plan will remain slightly different than for participants in other University medical plans.
New ConvenienceA prescription drug card will replace the current reimbursement process and create new convenience for participants in this plan. Active and retired faculty and staff members enrolled in this plan no longer will have to pay 100 percent of the prescription cost at the retail pharmacy and then submit a claim for reimbursement. After meeting the new $150 per person per year prescription drug deductible, they will pay the 20 percent co-insurance portion at the pharmacy, which includes a discount, and the claim will be filed automatically. The $150 deductible applies only to prescription drug purchases and does not count against the deductible for other major medical expenses. The $250 deductible for other medical expenses will continue.
Expanded CoveragePsychiatric drugs as well as oral contraceptives and devices for all participants in the BCBSM/United plan, not currently covered, will be covered under the new plan.
The University has many employees who are represented by labor unions and covered by collective bargaining agreements that contain provisions regarding health care and prescription drug coverage. The obligations set forth in those agreements will be honored. The leadership of each of the labor unions will receive individual communication from the University.
The Benefits Office will be charged with communication of information about the Oversight Committee and more specific details on the plan.