Poor adherence to prescribed medication regimens increases the incidence of hospitalization, especially among individuals with chronic medical conditions, and consequently adds significantly to health care costs. This failure together with less-than-optimal prescribing, drug administration, and diagnoses — creates as much as $290 billion each year in avoidable health care spending, or 13% of total health care expenses. A research brief from the New England Healthcare Institute reports these figures, together with suggested interventions to stem such unnecessary spending. Employers can consider these suggested interventions in designing prescription benefit programs, to help employees improve compliance with their prescription drug regimens.
Poor medication compliance includes behaviors such as failing to pick up or renew a prescription, not taking medications in the prescribed dosage level or at prescribed intervals, stopping a prescription before it has been completed, or abandoning a prescription regimen altogether. The report cites a number of barriers to medication compliance, including cost, side effects, difficulties in managing multiple prescriptions, forgetfulness, and a lack of understanding about the medical condition being treated or the urgency for treatment when a medical condition is asymptomatic.
Individuals with chronic conditions generally demonstrate lower adherence to a prescribed medication course of treatment than those with acute conditions, and adherence drops even lower with the passage of time. And, among chronic patients, those not following a prescribed drug regimen have higher hospitalization rates and higher mortality rates. Higher hospitalization rates lead, of course, to increased medical costs.
Because individuals with chronic conditions seem to do worse following prescription drug treatment regimens, one strategy for employers to use to increase compliance is disease management and condition management programs. These programs target individuals with chronic conditions and actively work with them to help them manage their diseases. Services can include monitoring prescription drug compliance, sending refill reminders and educating members on their chronic condition, thus addressing some of the reasons cited above for prescription noncompliance.
The research brief suggests three broad strategies to improve prescription medication compliance:
- Reduce the cost barriers to obtaining prescribed medications. Out-of-pocket prescription drug costs can, of course, influence the extent to which a patient follows a prescribed course of treatment, with higher costs leading to lower compliance. A prescription benefit plan’s employee copayment requirements determine an employee’s out-of-pocket costs. Designing the copayment requirement to encourage filling appropriate prescriptions is key. The research brief cites “Value-Based Insurance Design (VBID)” plans with lower employee contributions and out-of-pocket costs for cost-effective medications for chronic conditions, saying this can be linked to improved medication possession ratios.
- Address the behaviors and preferences of individual patients. Employees will vary across a wide spectrum as to how well they understand their medical condition, how engaged they are in their overall health care management, how willing they are to ask questions of physicians and pharmacists, etc. Reaching employees with a chronic condition on an individual basis — such as can be achieved through the personal contact that is part of a disease or condition management program — can involve them more intimately with their course of treatment and enhance the probability of prescription medication compliance.
- Design the right medication regimen for the individual patient. According to the research brief, getting the drug regimen right in the first place could reduce prescription medication noncompliance dramatically. Poor prescribing is a particular problem for individuals taking multiple medications. Again, disease and condition management programs can help. The individual contact such programs feature helps to ensure that the patient’s medications are not contra-indicated, that the patient understands the prescribing instructions, and that the patient is, indeed, staying on top of the regimen.
In considering prescription benefit plan strategy and design, keeping these ideas in mind can help to promote appropriate employee use of prescription drugs, and with it, improved health outcomes and better managed health care costs.
Consider that you will need to:
- Review health plan documents (and the documents for any other plans for which the audit is being conducted) to determine the definitions for all possible eligible dependents.
- Determine the documentation you will require for substantiating eligibility. For example, in the case of a spouse, this might be not only a marriage license or certificate, but also a recently filed joint income tax return to show that the marriage continues to the present day.
- Establish a time line for informing employees about the audit and a deadline for submitting the required documentation, and develop communications materials accordingly.
- Determine the process by which employees can submit their documentation, and set up a mechanism to receive materials.
- Review submitted documentation to determine whether they meet the requirements for establishing eligibility, and establish a notification and grace period process for employees who fail to submit materials properly and/or on time. Inform employees of the audit results.
- Since these audits generate a large amount of paper, arrange for secure storage and/or disposal of the materials employees have submitted.
- Since the audit will likely generate questions from employees, a knowledgeable person or persons must be assigned to field employee inquiries.
Some companies choose to outsource dependent eligibility audits instead of conducting them in-house. Audit service providers cite the potential cost savings that can be achieved and the amount of work involved in a thorough, well-designed audit to argue that contracting for such services delivers a good return on investment. If you decide to use an outside resource, you’ll likely have a choice of vendors. With more and more employers conducting dependent eligibility audits, an industry specializing in this particular employee benefit plan service has developed.
Other design considerations can impact the workload an audit generates. For example, in order to make the process more manageable, some companies audit only a particular dependent group, or a single company division or location at a time, instead of requiring all employees enrolling dependents to submit dependent documentation. If you’re considering homing in on particular dependent groups, data from HRAdvance’s client audit shows the distribution of ineligible dependents to be 43% children under age 19, 29% children over age 19, and 28% spouses. Another consideration that can impact the manageability of the audit is whether to conduct it retrospectively (and try to recover claims that shouldn’t have been paid) or on a forward-looking basis only. Many employers also choose to precede the audit with an amnesty period during which employees can voluntarily remove dependents from the plan with no penalty.
Since most companies traditionally have run on an honor system when covering dependents — basically taking an employee’s word for it that those dependents enrolled for coverage indeed meet a definition of eligible dependent — advance communications to alert employees of the audit, and the reasons for it, are critical to employee cooperation and, ultimately, how successful the audit will be. Use all available media, and stress that removing individuals who are not eligible for coverage will benefit not only the company, but all employees who are paying to have themselves, and family members, covered by the plan.
