Our goal at PPS is to assist our clients with developing and maintaining effective, efficient and compliant operations in support of profitable Managed Markets contracting activities. Towards that end, PPS offers a broad range of services in the Managed Markets Operations and Compliance arena. As a result of our industry experience in the private, public and government healthcare sectors, PPS is well prepared to assist our clients with advisory services, staff augmentation and business process outsourcing. Our areas of expertise include:
Contract Management and Operations
Medicaid Drug Rebate Program
Compliance
Contract Management and Operations:
Pharmaceutical Manufacturers invest hundreds of millions of dollars each year in product rebates and discounts to ensure formulary access and drive utilization of their drugs within the Commercial Managed Care and Government segments. A complex business and reimbursement model including Physicians, Patients, Distributors, Pharmacies and Insurers forces Pharmaceutical Manufacturers to enter into, often times, complex contractual arrangements with Managed Care Organizations as well as the Government that require significant infrastructure to administer terms and payments.
Over the past several years and with the introduction of the Medicare Modernization Act (MMA), we have seen the Managed Market landscape continue to evolve. Cost controls including generic only programs, step edits, class restrictions and three tier co-payment structures are common place. It has become increasingly more difficult and expensive for Pharmaceutical Manufacturers to remain competitive and secure unencumbered reimbursement for their drugs. As gross to net product margins deteriorate, it is critically important that Pharmaceutical Manufacturers have well-defined contracting strategies in place with clear evaluation criteria pre and post contract implementation.
In addition to the rebate and discount investment, Pharmaceutical Manufacturers must invest in the systems, software and infrastructure that is necessary to adjudicate contract claims and provide decision support capabilities. Strong Contract Operation Organizations and/or competent vendors are vital to ensure contract adherence, accurate and timely payments and appropriate organizational decision making. PPS can assist clients with:
- Organizational Design and Business Process
- Policy Development
- Contract Analysis and Performance Measurement
- In / Out Source Evaluation of Administrative Options
- System Evaluation, Implementation and Testing
- Customer Compliance with Rebate Terms and Conditions
- Rebate and Chargeback Administration
- Audit and Validation
- Dispute Resolution
- Rebate and Discount Forecasting
- Business Process Outsourcing
- Staff Augmentation
Medicaid Drug Rebate Program
Since the inception of the Omnibus Budget Reconciliation Act of 1990 (OBRA ’90), Pharmaceutical Manufacturers have been required to calculate and report Government defined prices including Average Manufacturer Price (AMP) and Best Price which are used to determine statutory Medicaid rebates owed to states by Pharmaceutical Manufacturers. Additionally, the Medicare Prescription Drug, Improvement and Modernization Act of 2003 (MMA), the Deficit Reduction Act of 2005 (DRA) and Healthcare Reform have introduced updated and expanded reporting and certification requirements for Pharmaceutical Manufacturers including the calculation of Average Selling Price (ASP).
Over the years, Pharmaceutical Manufacturers have been challenged by the complex and sometimes unclear legislative reporting requirements. Additionally, the vastness of the underlying data and intricacies of the systems supporting Government Price calculations have only further complicated the matter.
The Government Price Reporting arena is widely recognized as a high risk area for Pharmaceutical Manufacturers. Non-compliance, even unintentional, can result in significant fines and penalties. Colleague training is extensive and time consuming. Therefore, it is imperative that Pharmaceutical Manufacturers have well documented policies, processes and procedures in place.
PPS is uniquely qualified to assist clients in a variety of aspects in support of statutory Government Price Reporting:
- Business Process
- Policy Development
- Standard Operating Procedures
- System Evaluation and Implementation
- Government Price Calculations and Reporting
- Historical re-calculations
- Claim Administration
- Dispute Resolution
- State Price Reporting
- Business Process Outsourcing
- Staff Augmentation
Compliance
Government and regulatory agencies continue to closely scrutinize and monitor Pharmaceutical Manufacturer compliance with the law. In recent years there have been a number of investigations that have resulted in large penalties and fines both criminal and civil. Additionally, Pharmaceutical Manufacturers have been required as part of their settlements to execute Corporate Integrity Agreements (CIAs) with the Office of the Inspector General (OIG). These CIA agreements are generally multiyear and require Pharmaceutical Manufacturers to comply with the negotiated requirements. Requirements may include but are not limited to colleague training, annual transaction and process testing as well as additional reporting and certification requirements.
Pharmaceutical Manufacturers have also been impacted by the Sarbanes–Oxley Act which was enacted in 2002 in the wake of financial failure of several large companies. The purpose of this legislation is to improve the quality and transparency of the corporate financial reporting process as CEOs and CFOs are required to certify the quality of financial disclosures as well as make an assertion to the company’s internal controls.
Given the high dollar volume of rebates and discounts and the complexity of administration and forecasting, Managed Markets activities must be tightly controlled and tested. Developing Sarbanes-Oxley narratives, control questionnaires and test plans is challenging given the numerous processes and systems that impact the liability.
PPS is prepared to assist clients in all compliance matters associated with Managed Markets contracting and operational activities:
- Training
- Sarbanes Oxley Controls and Testing
- Corporate Integrity Agreement Work Plans
- Due Diligence