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Set your plan apart with an OTC benefit

OTC benefits add value to health plans

4 min read


OTC benefit


This post is sponsored by Convey Health Solutions.

Two of the buzz phrases most frequently heard in the health care community now are “value-based care” and “social determinants of health” (SDOH). Health plan leaders must leverage both to compete.

SDOH are particularly important in Medicare and dual-eligible populations, and Medicare Advantage and Part D plans are uniquely positioned to address SDOH through provider and patient incentives and value-based insurance design (VBID).

Meanwhile, federal policy has historically discouraged VBID in Medicare, but CMS is taking its foot off the brake. CMS launched a five-year VBID demonstration project in 2017, and in 2018 it further eased restrictions on MA plans that want to offer supplemental benefits in 2019. However, payers may be hesitant or unsure on how to make use of the new provisions.

How an OTC benefit adds value

One way for MA plans to differentiate themselves in an increasingly competitive market and address both VBID and SDOH is by offering an over-the-counter benefit.

Without an OTC benefit, VBID may fail to realize its full cost savings potential. A recent study found that while VBID increased drug adherence and reduced spending on other services, the net savings was minimal because drug spending rose. An OTC benefit in a value-based plan could bring down those drug costs.

OTC medicines help bridge treatment gaps, are convenient and reduce unnecessary use of health care services, according to the Consumer Healthcare Products Association Clinical/Medical Committee. Millions of Americans use and trust OTC products, and health plans that don’t cover them give subscribers an incentive to choose more-expensive prescription products or to simply go without.

Plans that do offer OTC products can see a significant difference in the lives and health of their members. For example, if people with diabetes can prevent foot ulceration and, ultimately, amputation by wearing padded or compression socks, coverage of socks not only encourages their use but could prevent expensive, physically taxing wound care and surgery.

These socks are relatively inexpensive but people on fixed incomes, in particular dual-eligibles, may be unable to afford them. Coverage through an OTC benefit indirectly addresses an SDOH – income – and frees funds to pay for shelter, food and transportation.

So how can a plan add OTC coverage? With a reliable, experienced partner that offers an integrated benefit and first-class customer support.

Essentials for an OTC benefit partner

An effective OTC benefit partner:

  • manages product selection, including purchasing and distribution
  • negotiates with vendors and leverages the power of bulk purchasing for the best prices
  • maintains a comprehensive call center focused on a positive member experience
  • accepts eligibility files in all types and formats and processes them frequently
  • generates internal audits, financial reports and CMS-required reports accurately and promptly

Added features like at-home delivery and catalog distribution both in print and online further enhance customer satisfaction and address SDOH for members residing in rural areas or lacking access to transportation. Mail service also benefits the health plan by enabling the inclusion of educational inserts in OTC product shipments.

The OTC product catalog should be tailored to the health plan’s goals and should comply with the regulatory aspects of OTC coverage. All technology used for OTC benefit administration must comply with HIPAA and the latest HITRUST security framework for robust cybersecurity and privacy protections.

A good OTC benefit partner will also be mindful of pain points for members. For example, various vendors offer prepaid cards for OTC products, but not every OTC product is eligible for coverage under CMS rules. Simply offering a prepaid card makes for frustrated customers who don’t find out until they are at the pharmacy checkout line that the supplies in their shopping cart aren’t covered.

OTC: A bonus for health plans and their members

OTC benefits offer payers a way to quickly add value, improve the SDOH and improve member satisfaction. A fully functional OTC program can be complicated, but picking the right partner who can deliver with minimal effort, full CMS compliance, and robust cybersecurity and privacy protections reduces administrative burdens while providing a significant benefit to the plan members.

Convey Health Solutions focuses on building specific technologies and services that can uniquely meet the needs of government-sponsored health plans. Convey provides member management solutions for the rapidly changing health care world. Learn more.