Learn how switching to a durable medical equipment (DME) benefit management program helped state fund director Jacob increase in-network penetration from 44% to 86%, saving 13% to 15% per eligible bill.
A managed DME/ancillary program provides deeper discounts, confirmation of need and fulfillment management — very similar to managed pharmacy programs — which saves money and improves claimant care.
Jacob is the director of a state fund. He is always looking for ways to save money for his organization and his clients. He previously signed on to the Optum Pharmacy Benefits Manager (PBM) platform and really liked how it was performing for him. He specifically liked how his PBM program focused on achieving the deepest network penetration possible to give his clients more cost-effective contract pricing, controlled authorization processes and clinical insight into as many transactions as possible. Due to the extensive network and in-depth reporting provided as part of the Optum PBM program, Jacob was able to see the factors driving his clients’ pharmacy spend, including the classes of drugs and the impact of certain physicians. This insight helped Jacob address the cost drivers and develop strategies to control these costs for his clients.
After evaluating his current Durable Medical Equipment (DME) providers, Jacob realized he had nowhere near the same visibility, insight and control over DME as he did his pharmacy benefits. Since Optum provided extensive reporting with his PBM, Jacob decided to explore what options they had for DME.
A benefits provider
After reviewing with his account manager, Jacob selected the Optum Total DME platform for his DME needs. The program was unlike any he had seen before and mimics the PBM program in many ways. It is a true DME Benefit Management program versus the fragmented vendor panel bidding process Jacob was currently using. The Optum DME program features a unique, retrospective 360° program granting visibility into the total ancillary spend and providing discounts on leakage spend in the form of retrospective DME bills. Prior to Optum, these invoices would have been paid at full fee schedule price with no prospective authorization process. However, the Total DME program was able to identify any leakage and help drive it into a prospective spend, thereby increasing prospective penetration.
Prospective order management
Optum offers a prospective order management system, allowing adjusters and case managers to order DME supplies from approved, contracted vendors, providing cost containment and verification of medical necessity and use. Prospective ordering enables the most compliant authorization processes. It allows adjusters to be in control of the order and allows Optum to process the selected item through its clinical and formulary procedures to ensure the right items are ordered for the contracted price and best quality service.
However, for any products or services where there is leakage, such as when a prescriber submits an order directly to the vendor, the program retroactively captures this spend, pays the vendor at the contracted rate, and automatically routes all future orders through prospective ordering—bringing the bills back in network. The other key feature of this product is the visibility into the spend. It allows Optum to identify vendors, physicians and providers who are driving the retrospective and out-of-network spend and identify strategies to work with them to increase in-network prospective orders.
Another advantage of using the Optum DME program is the ability to bring out-of-network invoices back in house. The Optum process of contacting suppliers and either automatically routing them back in network, or contracting with them for future transactions, reduces the leakage.
In Jacob’s case, this process has allowed him to understand the spend drivers from a clinical aspect as he has all the data at his fingertips. He is able to see emerging trends, revealing the types of items that drive his clients’ spend. This is very useful in developing strategies around authorization processes, adjuster education, and clinical intervention, and it enables Jacob to realize substantial savings and efficiencies for his clients.
Optum delivers savings
Prior to switching to Optum, Jacob was experiencing an in-network penetration rate of 44%. Within the first year of implementation, Optum was able to eliminate 21% of his leakage. By year three, Jacob had 86% network penetration for DME, saving an average of 13 to 15% per eligible bill.
With the Optum DME solution, Jacob has seen substantial savings in his DME spend and now feels he is managing the DME spend for his clients instead of it managing him. Not only is the data tracked by the program allowing for better clinical oversight into the care of the claimants, but it also allows him to know which vendors are driving up costs so their effectiveness can be evaluated. Optum is no longer a DME provider, they are now a partner, and Jacob is looking to see what other areas of his spend that Optum can help him manage more effectively.