Pharmacy Industry News: Truveris Introduces TruBid to Cut Prescription Drug Costs
Truveris Introduces TruBid to Cut Prescription Drug Costs
In its mission to simplify the complex payment process that plagues the prescription drug benefits industry, today Truveris, Inc. introduced TruBid, a Web-based software tool that helps health insurance companies and self-insured organizations negotiate and enforce more favorable contract terms with their Prescription Benefit Managers (PBMs). TruBid is the latest addition to the Truveris product suite which can save customers up to 12 percent annually on prescription drug claims by inviting PBMs to bid for their business through a standardized, automated reverse auction. TruBid helps PBMs expedite their contract, pricing and bidding initiatives, creating a dramatically more efficient process for everyone involved.
“Until now, the RFP process has been so static and cumbersome that customers typically stick to their incumbent PBM and end up overpaying for healthcare. The automation provides results in under half the time at a much reduced fee.“”
“While PBMs are integral to the prescription claims process, when we revisit our terms each year, it is time consuming and we never know if we’re really getting the best deal,” said John Cove, director of benefits, Hanley Wood. “PBM contracts are complicated and confusing. TruBid helps us structure an agreement with PBMs that we understand and can enforce.”
Americans spend in excess of $307 billion a year on prescription drugs. By serving as an intermediary among pharmacies, drug manufacturers and employers, PBMs can secure favorable pricing for payers to minimize spending. TruBid helps these payers – insurance companies and self-insured organizations – drive even more savings by making their request for proposals (RFP) to PBMs through an automated, Web-based software program, creating a reverse auction. This approach ensures standard contract terms, enforces drug pricing definitions and establishes consistent benchmarks. By using TruBid, CFOs mitigate risk and financial waste, human resources professionals, who commonly manage health benefit plans, save time and CIOs streamline business processes by shifting from a manual to automated process.
“TruBid puts customers back in control of their pharmacy benefit costs by fostering transparency and equitable business practices among PBMs,” said Bryan Birch, chairman, president and CEO, Truveris. “Until now, the RFP process has been so static and cumbersome that customers typically stick to their incumbent PBM and end up overpaying for healthcare. The automation provides results in under half the time at a much reduced fee.“
To fairly compare bids, TruBid can be implemented by customers directly or through their existing consultant or broker and get objective results within 30 days. Brokers who often help negotiate PBM contract terms, can scale their advisory services and run more RFPs per year. To use the system, clients work with Truveris to develop a Web profile on their plan design, needs, existing PBM contract and claims data. Then, PBMs are invited to enter their bids in a blind auction. Afterwards, users log in to review the results and PBMs can see where they stand compared to other bidders. A second round is then initiated and TruBid reviews, ranks and recommends the PBM.
TruBid is the latest addition to the Truveris product suite, whose first offering, TruGuard, catches billing errors in real-time. TruGuard enables payers with existing PBM contracts to verify and pay only for correctly priced and adjudicated claims, prior to payment, rather than relying on a manual, annual, retrospective audit. As a cloud-based patent-pending software application, TruGuard automatically reviews claims, with reports available on a secure, customized site, for cost accuracy, member cost share, eligibility, fraud, Sarbanes-Oxley (SOX), Retiree Drug Subsidy (RDS), Health Insurance Portability and Accountability Act (HIPPA) compliance.
UnitedHealth 4Q Profit Up 21% As Membership Grows
UnitedHealth Group Inc.’s (UNH) fourth-quarter profit rose 21%, helped by growing health-insurance membership, signs of light health-care usage in some areas and fast-rising sales in the company’s Optum health-services unit.
The Minneapolis-based company, the largest managed-care concern by revenue, capped a strong year helped by a continued trend of muted patient traffic in hospitals and doctors’ offices.
Still, UnitedHealth held its 2012 guidance in check while maintaining a guarded outlook for the new year. The company anticipates patients will ramp up medical-system use, and it’s making big investments related to the U.S. health-care overhaul law and changes in its pharmacy-benefits business, among other pressure points.
“At this early stage, we continue to take an appropriately cautious posture on 2012 financial performance,” Chief Executive Stephen Hemsley said on a conference call with analysts.
He also said the company was expecting “accelerating performance” in 2013 and 2014.
UnitedHealth shares, which have risen about 29% in the last 12 months, were down 3.1% to $52.29 in recent trading. Shares of most other large managed-care firms also traded down, even though analysts said UnitedHealth’s strong year-end performance was a good sign.
“As the bellwether and first to report, UNH results bode well for managed-care earnings season, although we believe strong results are already broadly expected,” Goldman Sachs analyst Matthew Borsch said.
Analysts believe investor sentiment this year may hinge more on key big-picture developments that could affect the industry’s fortunes, such as an upcoming Supreme Court ruling on the health overhaul law and the presidential election.
UnitedHealth reported a fourth-quarter profit of $1.26 billion, or $1.17 a share, up from $1.04 billion, or 94 cents a share, a year ago. Revenue increased 7.8% to $25.92 billion. Analysts polled by Thomson Reuters expected earnings of $1.03 a share on revenue of $25.69 billion.
The company’s UnitedHealthcare insurance business posted revenue of $24.17 billion, up 7.3% from a year earlier. The company’s membership grew by 175,000 people in the fourth quarter and 1.6 million last year. Enrollment at the end of the fourth quarter was higher than expected, Susquehanna analyst Chris Rigg said.
Hemsley noted on the call that UnitedHealth’s January membership growth for Medicare Advantage plans positions the company to meet its 2012 growth target. On the flip side, the CEO said UnitedHealth may miss its goal for members on Medicare Part D drug plans because it’s starting the year in a 625,000-member hole, which is deeper than the company previously expected.
Some Part D members are assigned automatically to plans each year, and UnitedHealth’s bids wound up being too high. The company expects to make up some ground by adding members through the open market, where returns are more favorable, Hemsley noted. The company closed 2011 with nearly 4.9 million Part D members.
The company’s overall medical-loss ratio, which reflects the portion of insurance premiums used for patient care, rose slightly to 79.7% from a year ago but declined from the third quarter and was less than analysts expected. The sequential decline occurred despite an increase in the ratio for the company’s commercial business, which analysts said indicates that health-care costs elsewhere, such as those for its Medicare-based plans, were likely light.
The commercial medical-loss ratio rose to 82.8%. UnitedHealth chalked up the increase to premium rebates to certain customers–the U.S. health-care overhaul law requires insurers to return money if spending on patient care falls below certain levels–plus lower levels of reserves that reflect prior overestimates on future costs for patient claims.
Additionally, the company noted that utilization was unusually low in the comparable fourth quarter of 2010.
Revenue from Optum, a health-services business that includes a pharmacy-benefit manager, jumped 23%. Optum’s earnings were helped by comparisons with a charge-plagued period the prior year. But that benefit was partially offset by investments in the business.