Co-Author: Debra Devereaux MBA, RPh
Over the past two years, CMS has made significant regulatory changes which have allowed Medicare Advantage Organizations (MAOs) more flexibility in offering members supplemental benefits to address Social Determinants of Health (SDoH), such as food insecurity and social isolation. With these regulatory changes, we have seen an explosion of several different supplemental benefit categories, including all the traditional supplemental benefits such as vision, hearing and dental, which was expected. What we didn’t quite expect was the massive increase of benefit offerings in a few new key categories such as Over the Counter Drug (OTC) programs and non-emergency transportation.
Focusing in on the OTC benefit, we can see that from 2018 to 2020 the percentage of plan benefit packages (PBPs)* offering an OTC benefit increased from 40% to 66%**. I’ve heard many of our clients refer to OTC as the “new table stakes benefit”, and I have to say that at least in some markets I am inclined to agree.
Now that we’re all right in the middle of benefit planning season for Plan Year 2021, there is no doubt in my mind that many organizations are having conversations about either adding an OTC benefit for the first time, or modifying an existing benefit to address cost and/or utilization. From our perspective, there are a few key factors that most Medicare Advantage Plans and OTC vendors are missing when it comes to creating and implementing an OTC program that makes sense for the current membership, budget and market landscape.
If you’re considering a new OTC benefit, or are considering modification of your existing benefit, we encourage you to consider the following three key factors:
First: It is critically important to select items for your OTC catalog that address the specific needs of your membership. For example, if your plan holds a high percent of diabetic members, selecting those OTC items that address the specific diabetic needs such as sugar free and/or alcohol-free medications, would be critical.
Second: In addition to adding OTC drugs and items to specifically address the needs of your membership, we also see that there is a gaping hole from a clinical perspective in terms of identifying those drugs which are “contraindicated” for certain chronic conditions. For example, members who are taking blood thinners (Coumadin, Plavix etc.) would need to limit use of certain over the counter pain medications like aspirin and ibuprofen. Members who are using prescription strength medications for GERD or ulcers would not want to use OTC Prilosec, Pepcid, etc., because those would be duplicates of their prescription medicine.
Third: We can’t underscore enough the important of analyzing your local market to determine the sweet spot (if any) for your OTC benefit. For example, if you’re currently the only player in the market offering an enhanced OTC benefit with modest benefits for other key categories such as vision, dental or transportation, you will want to examine how you fared during AEP and how you’re performing during OEP before determining the fate of your OTC benefit. Strong benefit, market landscape and performance analysis are key factors needed in order to determine the “right” supplemental benefit mix to win in your market.
If you would like to spend 30 minutes (gratis) discussing your OTC strategy with one of our clinical pharmacists or executive level strategic consultants, or if you would like assistance with selecting or vetting an OTC company, please email me directly at bseals@rebellisgroup.com.
*represents all non-SNP, non EGWP plan types.
**Source: Carrot Health MarketView TM