The Consolidated Appropriations Act (CAA) was passed into law in December 2020. While this enormous bill impacts everything from COVID-19 relief to military budgets, it also includes important provisions that affect healthcare spending.
The provisions in CAA for healthcare and pharmacy clarifies the role of an employer as a fiduciary and require full transparency across this critical employee benefit and industry. Additional critical elements within CAA include the disclosure of compensation to brokers and consultants, the removal of gag orders in insurance company contracts which restrict transparency to the employer and employee, and mental health parity and substance use disorder benefits.
Specific to pharmacy, this change will require any group health plan to report information related to pharmacy and prescription drugs. This includes the brand drugs paid for by the plan, the most expensive covered prescription drugs, the drugs with the greatest increase in plan spending, plus a categorical breakdown of plan services, average monthly contributions paid for by employers and employees, and the impact of rebates and fees.
In the coming months, it will be vital for advisors and their employer clients to determine if their current Pharmacy Benefits Manager (PBM) provides the data necessary to comply with these transparency regulations, as well as develop a strategy for engaging with a data analytics company to help navigate these complicated requirements.
The Innovu Pharmacy Program Analysis (PPA) is uniquely poised to help meet these compliance obligations. With a thorough data analysis that covers a variety of areas in pharmacy spending, PPA can help companies save money and reduce waste, but will also allow them to enhance their ability to meet their fiduciary requirements under the new law.