Pharmacy Claims Processor Conversion Q&A

Q&A 13-19 added 6/30/2008

Recently you may have heard that RegenceRx has decided to partner with a new claims processing vendor

• RegenceRx is the in house Pharmacy Benefit Manager (PBM) for The Regence Group
• RegenceRx performs all PBM functionality in house, with the exception of owning the software/hardware required to process prescription claims
  • Our claims processing vendor(s) follow our direction and requirements

March, 2007 we began the process of collecting a list of requirements for a claims processing vendor to possess based on our own book of business and a request for proposal sent to 6 vendors
Prospective Health Service (PHS), a division of Relay Health, a division of  McKesson was selected

Selecting Prospective Health Service allows us increased flexibility in the coding of complex Rx benefit designs, and with the complexity of Medicare accumulators, plus improved interface potential related to banking relationships (such as with FSAs, HRAs, etc) .  PHS will also allow us to improve our coding and configuration time to market on new benefit designs.

Pharmacy Services is currently working with our Project Management department on a work plan and schedule which we will share as we progress.

• Estimates are the first group of plan designs to move mid-September 2008
• Estimates for all moves to be complete, are by 1/31/09

1. What is the main purpose for the change in vendors?

   Selecting Prospective Health Service allows us increased flexibility in the coding of complex Rx benefit designs, and with the complexity of Medicare accumulators, plus improved interface potential related to banking relationships (such as with FSAs, HRAs, etc).  The PHS system is compatible with the systems Regence uses (Windows, Oracle, Crystal Reports, Citrix ISA). The system offers a superior testing environment and the ability to migrate code into production without additional input.

2. How will this change provide Regence a greater competitive advantage?

   PHS will also allow us to improve our coding and configuration time to market on new benefit designs.  We will have more flexibility with complex pharmacy benefit designs, such as separate generic and brand deductibles and out of pocket amounts.  We will be able to test new benefit designs and new coding before changes are made in production.  PHS is financially favorable.

3. With the go live and the months following, will there be a SWAT team which Sales can contact via phone or email to address / resolve customer issues?

   Yes, the formation of a SWAT or other assistance team will be announced.

4. What practical steps can Sales take to support the success of this conversion?

   We will be contacting Sales for assistance in announcing the project to our customers.  We will also consult with Sales if implementation activities arise that we need help with or that may impact our customers.

5. Will the BIN number on the member ID cards be impacted?

   No, Regence owns the BIN numbers and we will be working within the BIN numbers during the implementation.

6. Will new member ID cards be needed across the board (Individual) due to this change?

   No, we do not anticipate the need for new member ID cards.  We do not anticipate any changes to the BIN, PCN, or group numbers.

7. Will new member ID cards be needed as groups renew?

   No, not due to the new claims processor implementation.

8. Will PA history be transferred during this conversion?

   Yes, we plan on transitioning the claims history to support prior authorizations.

9. Does the change require an Rx benefit history conversion (deductible, out-of-pocket, lifetime max)?

   We will be transitioning enough claims history to support deductibles, as well as oop and lifetime maxs.

10. Will there be any impact on marketing collateral used by Sales?

    No, the marketing collateral is not impacted by the change in vendors.

11. Will this change impact who and how pharmacies contact via phone, email and/or Web?

    No, currently pharmacies contact RegenceRx for all issues.  After hours calls will be routed to a new vendor.  The new vendor is currently being evaluated.

12. Will this affect our formulary or the administration of it?

    No, RegenceRx will continue to administer our formulary.

13. What type of testing is planned before any specific group goes live?
    
    One of the advantages of moving to the PHS system is the robust test environment.  We are able to test all aspects of the system configuration prior to implementation and also prior to any updates or additions to the system.  For example, we are testing all benefit designs, formulary indicators, medication designations (generic or brand), drug utilization criteria (prior authorizations, quantity limits, step therapy, etc.), group information, eligibility, pharmacy networks, prescriber information, and all parameters of the prescription claims processing process.
    
    In addition to the above testing, prior to a group going live we will process their claims on the PHS system at the same time the Argus system is processing the claims. This is called parallel processing.  A prescription claim that is sent from the pharmacy will be routed to the Argus system as usual for processing and response back to the pharmacy.  At the same time, we will also route the prescription claim to the PHS system and the testing environment will process the claim in the PHS system.  Since the claim is processed in the PHS test environment, the pharmacy, the member, and Argus will be unaware that we are conducting the test.  We will then compare the results from Argus to the results from PHS to ensure that all claims are processed within the parameters that we have set.
     
14. What is the process to determine which groups go live and when?
    
    Several factors are used to determine the order of transition for our groups.  It is important to understand how the prescription claim gets from the pharmacy to the claims processor (Argus or PHS).  When the pharmacy submits the prescription claim it goes to a "switching" company such as Relay Health or Emdeon.  Based on the BIN (Bank Identification Number) and PCN (Processor Control Number) submitted by the pharmacy, the claim will be sent by the switching company to the indicated claims processor.  All member identification cards have the Regence BIN and PCN on the back of the card for use by the pharmacy.  We are working within the four BIN codes that are assigned to our business.  The first group to transition will be a non-Regence book of business (national stand-alone pharmacy-only clients) consisting of about 60,000 members.  We are targeting the first transition for mid-July 2008.  The next group to transition will be the four states of Blue Cross and/or Blue Shield members.  We are targeting this transition for mid-October 2008.  The last group to transition will be our Medicare business.  We are targeting January 1, 2009 to move our Medicare members due to the deductibles and accumulators that are effective at the first of the year.
     
15. What is the benefit of moving from Argus to PHS for Brokers/Agents?
    
    The PHS system will allow us to provide faster turnaround time for benefit coding, as well as more accurate coding.  We will also have more flexibility for coding deductibles and other aspects of the pharmacy benefit. 
     
16. What is the benefit of moving from Argus to PHS for Members?
    
    The information that our customer service representatives use will contain easily accessible explanations regarding why a claim processed or did not process.  We will also have increased information about deductibles and accumulators to respond to member's questions.
     
17. What will pharmacies have to change when we roll over to PHS?
    
    Pharmacies will not have to change the way they submit prescription claims if they are submitting them correctly today.  We are aware that pharmacies may use a "generic" BIN code assigned to Argus to submit claims and if this BIN code is used, the claim will continue to be routed to Argus instead of PHS.  We have a method to audit the BIN codes that the pharmacies are using and we will be correcting those "generic" codes prior to transition.
     
18. How is our Medicare business affected and when will they move?
     
    The last group to transition will be our Medicare business.  We are targeting January 1, 2009 to move our Medicare members due to the deductibles and accumulators that are effective at the first of the year.
     
19. What is meant by parallel processing and how does that affect our clients/groups?
    Prior to a group going live we will process their claims on the PHS system at the same time the Argus system is processing the claims, this is called parallel processing.  A prescription claim that is sent from the pharmacy will be routed to the Argus system as usual, for processing and response back to the pharmacy.  At the same time, we will also route the prescription claim to the PHS system and the testing environment will process the claim in the PHS system.  Since the claim is processed in the PHS test environment, the pharmacy, the member, the client/group, and Argus will be unaware that we are conducting the test.  We will then compare the results from Argus to the results from PHS to ensure that all claims are processed within the parameters that we have set.