The document provides an overview of managed healthcare and third party financial issues, including an overview of prescription drug benefits and the various factors driving drug costs. It discusses the different players in the healthcare system including health plans, pharmacy benefit managers, government health insurance programs, employers and individuals. It also covers various cost containment tools and strategies used by payers and pharmacies to manage prescription drug costs and reimbursement.

1. Third Party Financial Issues An Overview of Managed Care With a Dash of Humor

2. Your company's new health plan will cover your heart surgery but changes in your co-pay mean we take your liver.

3. What exactly is health insurance? A program that helps its members obtain the healthcare services they need by reducing the risks of financial exposure Risks are minimized by spreading financial costs and risks over a large group of members in the plan.

4. Overview of Rx Drug Benefits: Balancing Costs and Access Health Maintenance Organization Act of 1973 Addresses Rising Healthcare Costs Defined HMO Federal Requirements Led to proliferation of HMO’s Medicare Rx Drug Improvement & Modernization Act

5. Forces Driving Drug Costs Utilization Aging population New medical treatment guidelines Aggressive use Available new expensive treatments Demand Quality of life Specialty pharmaceuticals

7. The Payers and the Players Health Plans Indemnity or Fee for Service Managed Care HMO, PPO Pharmacy Benefit Managers (PBM) Public Health Insurance Medicare Medicaid Medi-Cal Tars/E-Tars CCS-California Child Services

8. Payers and Players cont. Employer Premiums Employee (Subscriber) Dependants Deductible Out of Pocket Costs Co-pay versus Coinsurance

10. Formularies: Clinical and Cost Containment Perspective Formulary Open Closed Limited Multi-tiered Benefit Design Single tier Two-tier Three-tier Four-tier

11. More Rx Cost Containment Tools Prior Authorizations (PA) Step therapy Supply limit Refill to soon rejection Drug Utilization Review (DUR) Great differences between copay tiers Mail order service

12. Pharmacy Impact 85-90% of prescriptions ‘touched’ Customer Service Explaining benefit issues Empathy & communication Patient education & managing expectations Third Party Processing Eligibility Issues EDS NDC not covered DAW Common Rejections Top 10 3 rd party

13. Computer & 3 rd Party On-line adjucation Dispense as Written (DAW) 0 no DAW 1 md requested brand 2 pt requested brand 3 rph selected brand 4 generic not in stock 5 brand dispensed but priced as generic 6 n/a 7 substitution not allowed, brand mandated by law 8 generic not available

15. Economics Incentive Programs Pharmacy Reimbursement Contracted rates Payment terms Increasing Generic Dispensing Formulary Compliance Customer Service Surveys Cognitive Services Wellness Programs

16. MEDICAL (California) Eligibility Treatment Authorizations Requests (TARs) Etars ID numbers Date of Issue

17. Medical Cards

18. Medicare Rx Drug Benefit What is it? Who is it for? When does it begin? Which is the best plan for me? New Challenges and Confusions Where is the information?

19. Standard Benefit Average $30/mo Drug Formularies Tiered Co-pays Prior Authorizations

20. Medicare Rx Resources www.medicare.gov Select ‘Prescription Drug & Other Assistance’ 1-800-MEDICARE www.RxSavingsAccess.com 1-800-CARD4RX www.Together-Rx.com 1-800-865-7211