How the Pharmacy Benefit Manager Does Not Work For You

What is a Utilization Review?

Utilization Reviews (UR) are used by health insurance carriers as a type of managed care to ensure that medical treatments are appropriate and efficient. Medicare may require a Utilization Review to verify that patient is not being over-prescribed pain medication. Worker's Compensation carriers may request URs to ensure that patients are not being over-treated by shady doctors. Your private insurance may require a Utilization Review to ensure that all first-line or recommended treatments have been attempted. Utilization Reviews are retrospective--that is it's a review of treatments that already have happened--but may be required before carriers provide prior authorizations for new services. Utilization Reviews have strict criteria and rely on evidence-based evaluations. Your own doctor will submit the medical history, evidence, and recommendations and the insurance carrier will assign a neutral doctor to review the paperwork, evidence, and treatment plan before issuing their o...

Common Insurance Terms

Pharmacy Benefit Manager (PBM ): Third party companies such as OptumRX, ExpressScripts, and CVS Scripts that contract with insurance carriers and coordinate with pharmacies to process pharmacy benefit claims. The Big Three process over 70% of pharmacy insurance claims in the United States and they they are not obligated to ensuring patient care or maintaining the standard of care. They promise to reduce costs to insurance carriers and profit from minimizing care to patients. Third Party Administrators (TPA) : Third party companies that are contracted with insurance carriers to administer claims, including adjust and adjudicate, guarantee payment, utilization reviews of medical and pharmacy authorizations, contract with providers, and accept or deny liability. Claims: Payment requests from medical providers or pharmacies submitted to the responsible party. Responsible Party : The responsible party for a claim is the person or entity legally obligated to provide payment...

What is a Third Party Administrator?

You likely know the name of your private insurance carrier and you may even know the name of your employer's worker's compensation insurance carrier--but what you may not know is that these insurance carriers have little to do with your actual claims. Instead of doing the back-office work themselves, they contract with Third Party Administrators, or TPAs. TPAs are responsible for a wide number of tasks. They may conduct Utilization Reviews for medication and medical procedures and issues authorizations or denials. They may handle pharmacy benefits, or contract directly with the pharmacy benefit managers (PBMS) that process the pharmacy claims. They handle all billing for medical providers, and pay those providers based on contractual agreements. The TPA may have complete control over every financial aspect of your private insurance or worker's compensation claim. Sedgwick or United Healthcare may be your insurance carrier in name only. Insurance carriers contract with ...

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