Carving out vs. Carving in pharmacy plans
Carving out pharmacy benefits means an employer separates those benefits from the medical benefits plan. When this happens, the employer negotiates directly with a Pharmacy Benefit Manager (PBM) to manage the prescription drug benefits. Conversely, carving in pharmacy benefits means the benefits are not separate from the medical benefits plan, typically done by a large medical health plan or a third-party administrator.
There are three main benefits when you carve out pharmacy benefits.
First, there is full transparency. Since the pharmacy benefits plan is not lumped in or bundled into the medical benefits plan, all rebates and discounts are listed and passed through to the plan with oversight and auditing rights. There are no client-specific rebates and usually no auditing rights in a carve in pharmacy plan.
Second, there is collaboration. Clinical pharmacists from the PBM meet with employers to review monthly clinical and claims data to improve performance by optimizing drug spend and health outcomes. In a carve in pharmacy plan, there’s minimal to no oversight or accountability on plan performance. The medical health plan usually offers a package.
And last, there is flexibility. Whether it is in formularies or pharmacies, employers can switch and optimize plans based on current needs. Employers receive a pre-packaged plan that offers limited flexibility in a carve in pharmacy plan.
Alluma is a provider-led, provider-focused Pharmacy Benefits Manager developed in collaboration between Vizient and Mayo Clinic. As the nation’s only member-owned, member-driven performance improvement company, Vizient is uniquely positioned to approach the PBM market with a provider lens. Mayo Clinic is focused on meeting patient needs and providing superior, evidence-based patient care. Mayo Clinic has offered pharmacy benefit expertise as a service to self-insured health plan clients across the country for more than 20 years and is a trusted source for health care and health information.