Express Scripts 2012 Annual Report Download - page 8

Express Scripts 2012 Annual Report6
Our product revenues include premiums associated with our Medicare prescription drug program (“PDP”) risk-
based products offerings. These products involve prescription dispensing for beneficiaries enrolled in the CMS-sponsored
Medicare Part D prescription drug benefit. Three of our insurance company subsidiaries have been operating under
contracts with CMS since 2006 and currently offer several Medicare PDP options. The products involve underwriting the
benefit, charging enrollees applicable premiums, providing covered prescription drugs and administering the benefit as filed
with CMS. We provide two Medicare drug benefit plan options for beneficiaries, including a “standard Part D” benefit plan
as mandated by statute, and a benefit plan with enhanced coverage that exceeds the standard Part D benefit plan, available
for an additional premium. We also offer numerous customized benefit plan designs to employer group retiree plans under
the Medicare Part D prescription drug benefit.
Our member website also supports pre-enrollment and post-enrollment activities on behalf of our Medicare PDP
and programs serving multiple clients. Prospective Medicare PDP participants and their caregivers can use the pre-
enrollment site’s Plan Compare tool to accurately project costs for all of their medications. The post-enrollment site allows
members who have signed up to receive a Medicare Part D benefit from either Express Scripts or one of our clients to
securely manage all aspects of their prescription program.
We support health plans that serve Medicaid populations by offering a pharmacy drug benefit. This business is
driven by state requirements and we earn revenues based on transaction-related activity. Common services include
transitioning members’ access to drugs as plan offerings change, generation of data to the state through encounter files and
coordination of benefits between states and other payors. Medicaid populations are expected to grow in states that choose to
expand Medicaid eligibility.
Specialty Benefit Services. Accredo Health Group and CuraScript Specialty Pharmacy provide an enhanced level
of care and therapy management services to patients taking specialty medicines to treat complex or chronic conditions.
CuraScript Specialty Pharmacy operates three specialty pharmacies with several other facilities throughout the United
States. Accredo Health Group dispenses and ships from three specialty pharmacies and maintains branch and infusion
pharmacies across the United States. Both CuraScript Specialty Pharmacy and Accredo Health Group pharmacies focus on
dispensing infused, injectable, inhaled and oral drugs that require a higher level of clinical services and support compared
to what typically is available from traditional pharmacies.
In some therapies, CuraScript Specialty Pharmacy and Accredo Health Group provide patient care and direct
specialty home delivery services to our patients, including in-home nursing. In addition to offering a broad range of
healthcare products, we offer services for individuals with chronic health conditions and provide comprehensive patient
management services. These include services for physicians, health plan sponsors and pharmaceutical manufacturers to
support the delivery of care, as well as fertility services to providers and patients.
Through the focus of these businesses on specialty drugs to treat specific chronic diseases, significant expertise has
been developed in managing reimbursement issues related to the patient’s condition and treatment program. Due to the long
duration and high cost of therapy generally required to treat these chronic disorders, the availability of adequate health
insurance is a constant concern for this patient population. Generally, the payor, such as an insurance provider under a
medical benefit, is contacted prior to each shipment to determine the patient’s health plan coverage and the portion of costs
that the payor will reimburse. Reimbursement specialists review matters such as pre-authorization or other prior approval
requirements, lifetime limits, pre-existing condition clauses and the availability of special state programs. By identifying
coverage limitations as part of an initial consultation, we can assist the patient in planning for alternate coverage, if
necessary. In addition, we accept assignment of benefits from numerous payors, which substantially eliminates the claims
submission process for most patients. Historically, specialty drugs were primarily reimbursed by the patient’s health
insurance plan through a medical benefit. This has evolved where, based on the type of drug dispensed, an increasing
percentage of transactions are reimbursed through a prescription card benefit, which typically accelerates reimbursement.
Bio-Pharma Services. Each year, more specialty drugs become available and the number of patients using these
drugs rises. For new biopharmaceuticals being launched, we can provide biotech manufacturers product distribution
management services. Our trend management programs allow us to assist our clients in an effort to drive out wasteful spend
in the specialty pharmacy benefit. We design strategies tailored to each product’s needs with a focus on identifying
opportunities to educate the marketplace regarding drug effectiveness, proper utilization and payor acceptance.
Administration of a Group Purchasing Organization. We operate a group purchasing organization (“GPO”) that
provides various administrative services to participants in the GPO. Services provided include coordination, negotiation and
management of contracts for group participants to purchase generic pharmaceuticals and related goods and services from
pharmaceutical manufacturers and suppliers, as well as providing strategic analysis and advice regarding pharmacy
procurement contracts for the purchase and sale of goods and services.
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