Most over-the-counter products and medications like pain relievers, allergy medications, heartburn drugs and topical antimicrobials were once available only by prescription. In OTC form, these drugs are FDA approved and often equally effective as prescription drugs at a fraction of the cost. Yet their OTC status has long meant these drugs are not covered under prescription drug plans for Medicare Advantage, Medicaid or commercial health plans. As a result, consumers with limited incomes may simply forgo needed medications while others may opt for more expensive prescription drugs that are covered by their health plans.
Adding an OTC benefit component to a health or drug plan may seem like one more administrative burden. After all, why add products and medicines to a formulary that subscribers are already buying anyway? Because an integrated OTC benefit can be a real cost-saver for health plans and subscribers alike, and OTC benefits boost customer satisfaction and retention.
The Consumer Healthcare Products Association Clinical/Medical Committee found that OTC medicines bridge treatment gaps, are convenient and reduce unnecessary use of health care services. The Center for Medicare and Medicaid Services allows OTC coverage in Medicare Part D drug plans in acknowledgement of OTCs utility as part of step-therapy algorithms and to improve cost-effective utilization management.
Each dollar spent on OTC medicines saves the US health care system $6 to $7, according to a 2012 study commissioned by the CHPA. The savings come not only from lower drug costs but also from fewer patient visits to health care providers and emergency departments.
The key to an effective OTC benefit is a seamless integration of robust formulary management, benefit management and customer service. Various vendors offer an OTC benefit add-on in the form of prepaid cards, but the cards must be set up to cover only approved drugs. The result is frustrated customers who find out at the pharmacy cash register that their card doesn’t cover the medicines and health supplies in their shopping carts. That’s not good for customer retention.
What carriers should look for in an OTC benefit partner
An effective OTC benefit partner relieves administrative burdens on the carrier by managing formularies, handling member interactions, processing eligibility files frequently and generating required reports accurately and promptly. Added features like developing and distributing online and print catalogs to subscribers and mail-service delivery of approved OTC medications and supplies further enhance customer satisfaction. Mail service also enables the inclusion of educational, program and informational inserts in OTC product shipments.
An OTC plan partner should also be experienced and well-versed in compliance with regulatory requirements and oversight for OTC benefits, and the partner must be able to assist with development of a formulary that meets the carrier’s goals. In addition, all technology used for OTC benefit administration must be able to demonstrate adherence to the latest security standards for robust cybersecurity and privacy protections.
A turnkey solution
A fully functional OTC program delivered with minimal effort from the carrier, full CMS compliance and quality assurance, and robust cybersecurity and privacy protections relieves the administrative burden on carriers. Packaged with exceptional member service and convenience, such a program constitutes a turnkey solution that contributes to plan STAR, HEDIS and NPS ratings, while delivering customer satisfaction, retention and market share.
Convey Health Solutions focuses on building specific technologies and services that can uniquely meet the needs of government-sponsored health plans. Convey provides member management solutions for the rapidly changing health care world.