Medicare Advantage (MA) plans have become more accessible. In total, 2,317 MA plans will be available nationwide for individual enrollment in 2018—the largest number of plans available since 2009. On average, a Medicare-eligible senior has access to 21 Medicare Advantage plans in 2018, an increase from the average of 19 plans available per senior in 2017. These surprising statistics mean more competition among MA plans for membership.

Renewed market competition, coupled with the need to maximize annual bonus dollars to keep premiums low, makes getting top marks in the CMS Star Ratings quality program a top priority. With 2018 already halfway over, health plans need to pursue innovative approaches to member engagement and adherence improvement. In 2017, one large regional MAPD plan decided to do just that, expanding its longstanding relationship with RxAnte to design and run an innovative, incentive-based engagement program.

And the Pharmacy Incentive Program (PIP) was the result.

The Health Plan and RxAnte used the PIP to activate local retail pharmacies as key member-engagement points, building the baseline and bonus system structure with RxAnte’s predictive analytics and the Health Plan’s pharmacy and medical claims data.

The Health Plan agreed to the recommended baseline and bonus system because RxAnte predicts late Q3 adherence rates with >90% accuracy.

RxAnte and the Health Plan identified two retail pharmacies best suited for the PIP pilot based on plan members attributed to each pharmacy, and launched the program in Q4 of 2017. Participating pharmacies received weekly prioritized outreach lists of plan members who picked up their medicines from their pharmacy. The pharmacies received small base payments for participation, and would only receive additional bonuses if actual year-end adherence rates were above the projected adherence rates determined by RxAnte at the Program’s outset.

The PIP achieved:

  • An estimated total adherence lift of 1.4% among pharmacy-attributed members at the end of the pilot; for a retail pharmacy that used a centralized call center and maintained a high level of engagement among attributed members, the adherence lift was even higher, at 1.7%.
  • An estimated program ROI of 7.4:1, accounting for total costs of the program’s administration and retail pharmacy bonuses against the total medical cost offsets due to improved adherence. Note: this does not include the additional value of improving adherence rates beyond the PIP (e.g., Stars bonus dollars or cost offsets realized through other adherence improvement efforts).
  • Total estimated medical offsets of $1.4M, or $2,437 dollars per plan member reached, projected over a 12-month period.

So what does this all mean? A few takeaways from this project:

Collaboration is the next big thing. High-performing health plans are already diversifying methods to engage members in adherence with tactics including live and automated phone calls, direct mail, and text messaging. The next opportunity for adherence improvement is to engage other actors in the members’ ecosystem— pharmacies and doctors— to deliver the same message on the importance of maintenance medications.

Incentives matter… Perhaps unsurprisingly, the most effective way to secure the commitment of organizations that don’t face the direct financial risks of member non-adherence is to provide an additional incentive. The PIP’s benefit to pharmacies was two-fold: it drove pharmacy customers into the store (retail and prescription revenue), in addition to providing the over-and-above incentive associated with incremental adherence improvement (bonus dollars).

…but only if the measurement approach is solid. RxAnte’s ability to reliably predict a member’s adherence rate without further intervention was key to creating the ‘baseline’ against which to measure the pharmacies. This shows the important role that next-generation analytics can play in rolling out adherence programs beyond the bounds of the health plan.

Interested in learning more? Read our case study about the Pharmacy Incentive Program here.