By Bethany Hruschak, Senior Manager, Pricing and Analytics
Managing pharmacy costs is an essential but complex task for organizations striving to optimize healthcare spending. While you may think annual rebate reconciliations are a standard practice, they often don’t happen unless PBMs are specifically asked—and even then, they’re done on the PBM’s terms and may not fully account for all contractual guarantees. Without an independent review, organizations may unknowingly leave substantial dollars on the table.
An independent, data-driven approach ensures PBMs meet their financial commitments, providing employers, health plans, and other stakeholders with the transparency they deserve.
Why Independent Pharmacy Pricing Reconciliation Matters
PBM contracts are intricate, filled with pricing guarantees, rebate structures and discount terms that require deep expertise to navigate. While PBMs often assure their clients that guarantees are met, an unbiased, independent review is the only way to ensure full compliance and recover missed savings.
Here’s what you need to know about PBM rebate and pricing guarantees:
- Not every drug qualifies for a rebate: PBMs offer guarantees based on specific formulary structures, and understanding how these rebates apply to a group’s drug mix is critical.
- PBM-provided reconciliation reports aren’t always accurate: Our analysis shows that fewer than 50% of PBM reconciliation reports are fully correct, and 60-70% contain discrepancies—some leading to financial recoveries, others requiring clarification.
- PBM rebates vary significantly across clients: Factors like formulary design, drug utilization and contract language all impact rebate guarantees. An independent review ensures these guarantees are fully met.
- Recoveries often require extensive follow-up: Some PBMs don’t proactively conduct reconciliations or only provide them upon request. Even when reports are provided, chasing down discrepancies can take months of follow-up.
What to Expect from an Independent Rebate Reconciliation Partner
A strong pharmacy benefits partner should take a proactive, client-first approach to rebate reconciliation—going beyond standard reviews to ensure every dollar owed is accounted for. Key elements of a thorough and transparent rebate reconciliation process:
- Comprehensive claim-level analysis: A true partner doesn’t rely on PBM summaries but independently recreates reports from the ground up, identifying individual claim discrepancies to ensure accuracy.
- Unbiased client advocacy: Rebate reconciliation should be conducted solely in the client’s best interest, without influence from the PBM.
- Persistent follow-through: PBMs often require multiple requests before releasing full reconciliation reports. A diligent partner proactively pursues these reports, cross-references every detail, and ensures accuracy.
- Annual, independent audits: Ongoing, proactive reviews of rebates and discounts help verify compliance and uncover additional savings opportunities.
- Contract expertise: A knowledgeable team will carefully review PBM contract language, ensuring findings are validated and strengthening negotiations for future recoveries.
A thorough, transparent reconciliation process ensures organizations aren’t leaving valuable savings on the table and are maximizing the financial return on their pharmacy benefits.
Don’t Let Savings Slip Away
When it comes to pharmacy pricing, trust—but verify. An independent, data-driven reconciliation ensures that your PBM is meeting its obligations and that your organization isn’t unknowingly leaving savings behind.
With Navion, you gain a dedicated partner committed to uncovering hidden value and ensuring every dollar owed finds its way back to you.
Connect with us today to learn how our pricing reconciliation expertise can help maximize savings and drive greater financial accountability for your organization.
See How Navion’s Independent Review Uncovered $660,000 in Hidden Savings
A 3,400-life group engaged Navion for an independent rebate and discount reconciliation. Despite the PBM’s assurance that all pricing guarantees had been met, our thorough analysis told a different story. Over the course of six months, our team conducted a meticulous data review, engaged in dozens of back-and-forth exchanges with the PBM, and applied rigorous contract verification to ensure accuracy.
Results:
- Client Size: 3,400 Lives
- Projected Annual Pharmacy Spend: $11M
- Expected Rebates and Discounts: $2.8M
- Recovered Additional Rebates and Discounts: $660K (24% increase)
By relentlessly pursuing every dollar, Navion delivered a 24% increase in recovered rebates and discounts—money that would have otherwise gone unclaimed.
