AH042 - Pharmacy Benefits 101: The Network, with Kasi Ortiz

Transcript

Lightly edited for clarity.

[00:27] Justin Venneri: Hello, and thank you for joining us for this episode of the Astonishing Healthcare Podcast. This is Justin Venneri, your host and director of communications at Capital Rx. And today, in the studio with me, we have Kasi Ortiz, Vice President of Provider Relations. And we're going to be talking about the network. We're going to try and do this in a Pharmacy Benefits 101 sort of way, but also address some more involved questions that we find ourselves answering for plan sponsors in the normal course of business. And also the network component of Never Move Again™ is important, so we'll tackle some of that. Kasi, thanks so much for joining me today.

[00:58] Kasi Ortiz: Thanks, Justin. Happy to be here.

[01:00] Justin Venneri: So, let's start off with a little bit about your background, please.

[01:03] Kasi Ortiz: Yeah, so my background, I have a legal background. I'm an attorney licensed in New York. I don't work in a legal capacity for the company. I do use the skills every day, of course, and I really found my way into healthcare using those legal skills and working on healthcare contracting for Super Value Pharmacies. The part that I worked on at Super Value Pharmacies eventually became Albertson's Pharmacies because Super Value sold a portion to a private equity firm and I moved over with the Albertsons pharmacy side. And then in 2014, when they were working toward the merger with Safeway, that's when I eventually left the pharmacy side and moved over to the PBM side. At the time, Catamaran, which has had a few different names over the years, but yes, one of their executives reached out to me about an opportunity there and I decided to take the chance and move over to the PBM side. I worked at Catamaran for a number of years in the provider relations and contracting team and eventually worked at Optum via the merger that Optum and Catamaran went through a lot of mergers in my history.  

But in 2018 I received a call from someone named AJ Loiacono, who I think we're all very familiar with. And AJ had called me and he described a company that really sought to revolutionize the healthcare industry by finding ways to reduce healthcare costs through creating certain transparency technology and pharmacy benefit management solutions that really pulled back the veil in the PBM space. And it was just so refreshing to Hear AJ talk about his vision for the company and what he was starting. And so naturally I was hooked. And I wanted to be a part of the company, I wanted to be a part of the solution. And so AJ and team hired me to contract and build out the first NADAC based retail pharmacy network in the commercial space. The first national one, that is, that was in 2018. So six years later, the rest is history, as they say. And I haven't looked back.

[03:02] Justin Venneri: You weren't alone. He hooked a few other people along the way.

[03:04] Kasi Ortiz: I think he's good at that.

[03:06] Justin Venneri: That's his thing.

[03:07] Kasi Ortiz: Fisher person, I guess.

[03:10] Justin Venneri: So your role here at Cap Rx, you built the first ever, you know, national commercial NADAC network. Really high level pharmacy benefits 101. When we use the word network, what does that mean?

[03:20] Kasi Ortiz: So at a very high, somewhat basic, simple level, the way that we think about networks is essentially the group of pharmacies that support a benefit. So the benefit for the clients, depending on their particular goals, the pharmacies that support the members and where they can get their drugs filled. At a very simple level, that's how we think about a network.

[03:40] Justin Venneri: And is... that could be a specialty pharmacy, it could be mail order retail.

[03:44] Kasi Ortiz: Yep. The networks really can vary based on pharmacy type inline of business. So we could have some retail pharmacy supporting specialty claims, or we could have some specialty pharmacies supporting the retail area. But it's really based upon what the clients want from a benefit design standpoint. But yeah, typically they are broken out by line of business and the pricing corresponds with that as well.

[04:07] Justin Venneri: Cool. Okay. And how does our network or network strategy differ from other PBMs?

[04:12] Kasi Ortiz: Yes, so we'll get into that a little bit more because I know we're going to discuss the Never Move Again™ strategy. But I would say at a high level, our network strategy is built, built upon standard network offerings that provide strong pricing and transparency with a view to simplicity in nature. And so by that, what I mean is that the pricing we offer and the benchmark that we use, the NADAC benchmark, it provides some value that's baked in for the clients. And so some of the different network offerings that other more traditional PBMs offer just aren't needed with the way that we've structured and priced our networks. That's where the simplicity comes in.  

And you know, just to reiterate the point, these arrangements are truly transparent in that we aren't hiding any pharmacy pricing. We aren't changing pharmacy prices for a client based on their size. If we have a client that's in a national, broad network, that client receives the same prize. Whether that client has 500 members or 50,000 members, they all are receiving the same price. And it's that level of simplicity and transparency that I think really differentiates us. In addition to just our standard network offerings, we can also reasonably customize our networks. And I think that's really based upon the fact that we aren't incentivized to use any particular pharmacy. We don't have any conflicting goals from our own financial perspective in that we don't own or have an affiliation with any pharmacy. So we can really customize and modify our networks as needed, using those standard networks as building blocks to start.

[05:43] Justin Venneri: Got it. One question that comes up often, or often enough that even I've heard it on the marketing team, is what happens if a pharmacy, like a local independent, that is utilized by a portion of an employer's population isn't in our network? What do you do there?

[05:59] Kasi Ortiz: So if we find out that a pharmacy that is utilized by a client or potential client is in a network, we do an immediate sort of contract gapped analysis. And that typically involves evaluating any claim volume, the members that are involved, to get an idea of the scope, and then we reach out to the pharmacy to get them in network. And that may involve custom contracting or custom pricing, or it could involve more standard terms and pricing. So. But our goal is to make sure that we're mitigating as many gaps and disruption as possible. And you know, I should say contracting is ongoing. We are always adding to the networks. It isn't something that's ever done per se because we know that needs can change. The types of pharmacies that clients may want can change. And so we have to be flexible to address those changes as well.

[06:48] Justin Venneri: And actually, I have like a curveball for you. Okay, just out of curiosity, it occurred to me as you were speaking there, what's the receptivity when you call a pharmacy? Do you call and say, hey, I'm calling from Capital Rx. It seems like there are some members that pick up prescriptions at your pharmacy. What does that discussion usually go like?

[07:08] Kasi Ortiz: Yeah, so at this point they usually are independent pharmacies that we're reaching out to because we already have such a robust network already contracted. And so, yeah, usually it's, hey, I'm calling from Capital Rx. We recently won to the extent we can disclose the client. We recently won. Yeah, we recently won, you know, client xyz. And we know that they have had some claims that have processed through Your pharmacy, we want to make sure to maintain that continuity of service. When we go live, we would give them the date of when that go live would occur and then we would work through the terms with them. And I have to say, for the most part, I mean, the pharmacies are receptive to our model because we have been successful in winning from a lot of the more traditional PBMs. And so with the way that we manage our networks, our relationships and our pricing structures, pharmacies are very receptive to working with us in our NADAC benchmark.

[08:02] Justin Venneri: Is that because no clawbacks, DIR [fees]...

[08:05] Kasi Ortiz: Yeah. So we don't have any effective rates. The rate that you would get in the contract is what they should be getting at the point of sale and it flows right back through to the client agreement. We also don't charge any transaction fees or any fees to adjudicate claims. And we are very transparent in terms of how we operate both our client agreements as well as our pharmacy agreements. And I think for some of those reasons, the pharmacies are open to working with us.

[08:31] Justin Venneri: Cool. On the client side, how do clients typically weigh cost versus quality when we're talking about the network?

[08:39] Kasi Ortiz: So I think it really is somewhat client dependent because there's different ways to view it. So from the way that CapitalRx views it is that we value both cost and quality. Of course, by that I mean lower cost doesn't necessarily equate to lower value. Higher cost doesn't necessarily equate to higher value. But the crux is trying to find that equilibrium between the two. And so it really depends on the client's goals. If they have particular members that have certain disease states or particular needs that need to be addressed, their needs may be different than others. You know, maybe they need to have a more specialized or custom network that would leverage some in house pharmacy arrangements or something like that to provide that level of cost and quality. Others may not have those same needs and can leverage more of our standard networks to provide that cost and quality.  

So it really comes down to the goals in terms of what the clients want. But we understand that it's important to find the marriage between the two because of course, if you have clients and members that have good experience at the pharmacies and are receiving higher quality products, they're more likely to be adherent. And so the long tail of it is that the overall health care for that member will improve and costs will eventually go down. And it's tracking to that which is really interesting. And I think clients should be aware of the pharmacies that support their members and understand that balance so that they can find that equilibrium. But it really is driven by the goals that they have regarding their benefit design.

[10:09] Justin Venneri: Okay, thanks for that. And Never Move Again™. How do we execute on our NMA strategy? From a network standpoint, flexibility is important, right? But what else should we think about?

[10:21] Kasi Ortiz: Well, that's a great question. And so at a high level, the way that I think about the networks, which sort of lends itself well into this conversation about Never Move Again™ is I think about it like, like Legos®. So I have a four-year-old and Legos are an everyday part of my life. Whether it be me building objects with them or stepping on them, they are around all the time. And so I really think about our networks and our agreements like Legos. And by that I mean we can take a group of our agreements and we can build a boat with them depending on the client's needs, or we can then take those same agreements and build a building with them. Right. So we can really use those same blocks and build and customize the network structure to align with what the client needs. And I think that level of flexibility really is what gets to the heart of the Never Move Again™ strategy.

Related Content

• Replay - Build a Lasting Pharmacy Benefit Strategy with Never Move Again™
• Capital Rx Receives a US Utility Patent Covering its Enterprise Health Platform - JUDI®
• AH025 - Empowering Pharmacists, with NASPA's Krystalyn Weaver, PharmD, JD

Our willingness to go the extra mile with the client, our willingness to understand their needs and work toward contracting network customization or what have you to make sure that we're meeting those needs. And I think a lot of it stems from the fact that we don't have any conflicts as you think about. PBMs want to drive business to certain affiliated pharmacies or certain owned pharmacies and things of that nature. And so we obviously don't have that. We really are not incentivized or have any conflicting financial goals that would prohibit us from doing what we need to do to meet what the client's benefit design desire is. And so what that means is that if we have a client that has an in house pharmacy, for example, and they maybe want to try to leverage that pharmacy in more strategic or unique ways that allows them to better meet the goals that they have by way of their members and adherence and all of the pharmacy benefit, well, we can do that.  

And JUDI, the platform that we have is customizable and flexible and allows for those sorts of unique network structures. And I think our willingness to sort of go there with clients and understand what they need and find ways leveraging our already contracted agreements or in some cases going out to contract to address that need. So adding that additional piece to the puzzle, there Coupled with the technology that our platform provides that allows for that customization, whether it be from creating an in house or custom network to leveraging certain tags, we really can get very specific and address the needs of the clients in ways that allow us to morph and change as a client's needs change. So like a client may initially have a risk pool that is younger, doesn't have a lot of unhealthy people, but as that client matures, as their employer group matures, as their membership matures or grows and enters more of a family type of structure or space or things of that nature, the needs of the client changes, the goals that they have, and the financial aspects morphs and changes as well. And so with the technology we have, our willingness to find unique ways to meet the varying needs allows us to ensure that clients can stay with us.

[13:27] Justin Venneri: When you mentioned JUDI and allowing for customization at various levels, what sorts of customizations? Can you give me an example or two?

[13:35] Kasi Ortiz: Yeah, no, that's a good question. JUDI is of course cloud based and that means that we can address issues quickly. So one example would be within the COVID antiviral pricing requirement space. So when all of those different requirements came out and were disseminated, we had to set up JUDI to price appropriately, efficiently and quickly, and we were able to accomplish it within a matter of days. Our other PBMs in the industry, we know it took weeks to address that and that really mitigated our clients’ exposure to claims paying incorrectly and limited the need to do a reversal and reprocess and to address those claims that maybe didn't hit the appropriate pricing. And so one other ability that JUDI has is around tags.  

Tags allow us to drive claims, copays, coverage and specific drugs to certain networks and certain pricing structures. And so using those tags allows us to really customize and hone in on very specific network and pricing structures that align with what a client might want to do. Maybe they want to address a particular disease state. So drugs that are associated with a particular disease state, well they can do it with a tag. Maybe they want to have something that's state specific for a group of their members that can also be driven via a tag. And so that flexibility within JUDI that exists, given the technology that we've developed really allows us to get very specific in terms of some of the network and benefit designs that we have.

[15:05] Justin Venneri: Okay, if you had to pick out one other question, that was a really great question a client or prospective client asked you or a question that you get frequently that might be misunderstood. About networks or about network flexibility? What would you say it is?

[15:21] Kasi Ortiz: Well, I think there's been a lot of press, there's been a lot of information going around about the NATAC pricing benchmark. And while I think we could do a whole podcast just on NADAC we.

[15:31] Justin Venneri: Have with AJ and Antonio, so yeah, well... (AH020 - Why NADAC is a "Ray of Sunshine," with AJ Loiacono and Antonio Ciaccia)

[15:35] Kasi Ortiz: <laughing> Maybe we could do another one as related to sort of some of the regulatory landscape. Because I do think that one of the sort of pieces related to the NADAC benchmark that reiterates the sort of Never Move Again™ strategy and the future proofing, if you will, of our network strategy is around the use of NADAC. I'm sure that folks have seen all of the different pieces of legislation that have come about. The fact that states are starting to require it more and more outside of just within the Medicaid space. And so I think the fact that we have NADAC based contracts today, we're uniquely situated to meet the increasing demands in the regulatory, pharmacy pricing and benefit management environment. And that sort of sets us apart because we've already been doing it for years. We have the experience and the knowledge and the data under our belt to really dig into sort of that benchmark to understand how it's going to impact our clients, to allow them to address some of the changing environment from a regulatory and I guess litigious standpoint.

[16:34] Justin Venneri: Got it. All right, Kasi, this has been great. Thank you for explaining everything from the basics of networks to some of the intricacies of JUDI and how our technology allows for more network flexibility and to meet clients needs. What's the most astonishing or surprising thing that you've seen over your career that you can share? Of course, as it relates to networks.

[16:55] Kasi Ortiz: It's a little bit of a tough question. I always have a hard time finding favorites and so for me it's difficult to point to one thing. But what really amazes me about JUDI is the flexibility that it provides. Whether it be around specific custom in house network setup abilities or leveraging specific pricing for particular drug categories, or the ease with which we're able to meet pricing requirements from various states. It's really that ability to move quickly and flex with the different benefit structures and regulations that amazes me. JUDI has really evolved from 2021 to today when we first went live. And as our client base has gotten more sophisticated, well so too has the platform that supports that evolution of the sophisticated client base. That's really what astonishes me is the constant evolution that our system and our operations goes through to meet the needs of our clients in the industry.  

And I think for me specifically what that's meant is that I've taken on more of a consultative capacity, which traditionally folks within the provider relations world don't really do that. And I think that really speaks to where the company views the value that the people can provide to our clients. And so I'm really excited to embrace those changes and to get more consultative and strategic with the clients as we understand the different benefit needs that they have. And I mean, ultimately, right, we, we never rest. We're always evolving and that's what makes us so hard to catch. And I just, I love that about Capital Rx. Very proud of the team and I'm looking forward to what we're going to do in the future.

[18:29] Justin Venneri: Likewise. Well, Kasi, thanks so much for joining me today and I look forward to having you back on and talking about the future.

[18:35] Kasi Ortiz: It is bright. Thank you.

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