Stop the Bleeding - Pharmaceutical Executive


Stop the Bleeding
A prescription for rebate validations

Pharmaceutical Executive

How to Stop the Bleeding

The question for pharmaceutical executives is how best to guarantee results and maximize benefit. Based on 20 years of experience consulting with the world's leading pharmaceutical manufacturers, here are my best practices for claim validation and reducing rebate overpayment.

1. Bring It In-House Deploy an internal, integrated solution to automate claims validation; this offers a better return-on-investment than an external service. Once the initial acquisition and implementation costs have been realized, ongoing costs for an internal solution drop dramatically. You'll enjoy continual revenue recovery while remaining in full control of the process.

The other benefit of having the data in-house is that it enables you to perform a variety of advanced analyses to improve overall business processes. For example, manufacturers can use this data to make educated decisions about their contracting relationships.

2. Get Down to Details Manufacturers need a solution that enables them to examine and validate sales data down to the lowest granular level. You should be able to view the data by individual trading partner, submission time period, and each individual submission. That way, you can uncover and resolve specific discrepancies and errors. In addition, you can identify whether or not certain trading partners have tendencies toward particular issues with their data, and if so, improve your efficiency by targeting those specific issues moving forward.

3. Take Control Take control of your managed care rebates by designating someone within your contracts organization to be responsible for minimizing rebates and maximizing retained earnings. To be effective, this individual must have maximum control of how data is validated. This includes, on a granular scale, manufacturer- and product-specific elements, as well as the ability to vary validation strategies by individual trading partner and data submission.

4. Integrate with Internal Systems Directly integrate the claims validation solution with your internal contract and rebate payment systems in order to maintain the full integrity of the results. This provides rapid and accurate responses to data corrections within incoming utilization submissions, as well as within your own contract membership and product structures.

5. Capture and Track Data Implement systems that capture and retain all utilization data throughout the life cycle of the claims validation process. Ensure that you can access your prescription-level data at any time, and that you have a full audit trail to demonstrate how the data was validated. This will support trading partner reconciliation activities and help facilitate internal and external audits.

6. Conduct Validation Tests Clearly define your rebate validation process, ensuring it utilizes consistent and comprehensive validation tests. If you don't know whether or not you are operating in the most effective manner, take a snapshot of a few PBMs over a short period of time. This exercise will give a sense of what revenues could be regained through a claims validation strategy.

At this juncture, it's vital for manufacturers to recognize the inevitability of government examination within the context of Part D. As the next presidential election approaches, both opponents and proponents of the Medicare Part D legislation will look to more effectively quantify its results throughout the marketplace. Therefore, it's crucial that pharmaceutical manufacturers implement strategies within their commercial and Medicare Part D processes that provide the same level of detailed examination and transparency as is common practice within their internal Medicaid operations.

Now more than ever, market forces have converged that mandate that pharmaceutical manufacturers deploy a consistent and reliable strategy for utilization-based claim validation. Fortunately, this is one area that all but guarantees a solid return on investment along with numerous other benefits, both tangible and intangible, for those manufacturers that have the foresight to capitalize on the opportunity.

Chris Biddle is the vice president of Life Sciences Direction for I-many, Inc. He has consulted with leading pharmaceuticaturers to successfully validate rebate submissions, and currently consults for seven out of the 10 largest pharmaceutical manufacturers in the world. He can be reached at


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