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GPO Insight – Managing Membership, Defining Class of Trade, and Ensuring Contract AccessTodd Cooper, R.Ph.
Director, Pharmacy Program Development
Who is Vizient?
Vizient Presentation │ Date │ Confidential Information2
• Combination of VHA, UHC, Novation, MedAssets SCM
and Sg2
• Pioneers in health care with the insight, purchasing
power and expert connections to drive better results for
members and customers
Purpose, mission, strategic aspirations
Purpose
To ensure our members deliver
exceptional, cost-effective care
Mission
To connect members with the
knowledge, solutions and
expertise that accelerate
performance
Vizient Presentation │ Date │ Confidential Information3
Strategic Aspirations
Become an indispensable
partner to health care
organizations
Become a leader in health care
innovation
Accelerate our growth rate
Advantages of the combined entity
Vizient Presentation │ Date │ Confidential Information4
From cost to care delivery, Vizient will provide targeted solutions to improve member’s performance
Scale and
Market
Presence
Economic
Value
Integrated
CapabilitiesInnovation
“Our central focus is helping members
apply data and insights in new ways to
achieve sustainable results. Our
success is ultimately defined by the
success of our members in serving their
patients and communities.”Curt Nonomaque, President and CEO, Vizient
Vizient Presentation │ Date │ Confidential Information5
Pharmacy Program Overview
Industry leading solutions for each category of spend
Pharmaceuticals Plasma Program
Contrast Media & Nuclear Medicine
Automation Support Services
Pharmacy Distribution
7
Vizient Pharmacy Program Spend
$33.9 Billion in 2015 Member Spend
Bill
ions
$12.3 $13.0 $14.6 $14.4
$16.0 $17.1
$18.7
$22.6
$29.1
$33.9
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Membership Database Classes of TradePrimary COT
• Acute Care
• Ambulatory Care
• Surgical Care
• Home Health Care
• Long Term Care
• Managed Care (Closed)
• Physician Clinic and Office (oncology)
• Correctional
• Retail
• Non-Pharmacy
• Education
• Business and Industry/Corporate
• MunicipalitiesVizient Presentation │ 3/23/16 │ Confidential Information8
2015 Vizient Spend Breakout by COT
9
Acute Care49.4%
Ambulatory Care2.3%
Home Health Care40.6%
Long-Term Care0.1%
Managed Care Closed0.5%
Physician Offices/Clinics
2.7%
Retail4.4%
New Members Identify COT
Vizient Presentation │ 3/23/16 │ Confidential Information10
Acute Alternate Care
Sub-Categories
• 58 combinations of COT and sub-
category
• Primary Categories:
• Acute Care
• Clinic
• Ambulatory Care
• Home Health
• Long Term Care
• HMO-Closed
• Retail Pharmacy
• Corporate
• University, College or School
Vizient Presentation │ 3/23/16 │ Confidential Information11
Acute Sub-Category Share
Acute Medical School 0.25%
Administration/ Operations/IT - Acute 0.00%
Alcoholism & Other Chemical Dependency 0.01%
Cancer Hospital 2.72%
Cardiac Hospital 0.02%
Corrections Facility 0.05%
Diagnostic Imaging 0.10%
Family Practice 0.03%
Foundation 0.13%
General Medical and Surgical 50.9%
General Surgery 0.06%
Home Health Care 0.02%
Hospice 0.00%
Hospital 6.50%
Long Term Care Hospital 0.09%
Medical Research 0.00%
Pharmacy - Acute 5.5%
Psychiatric Hospital 0.61%
Rehabilitation Center 0.36%
Rehabilitation Hospital 0.17%
Standalone Emergency Room 0.00%
Sub-Acute Facility 0.01%
Surgery Center 0.01%
Surgical Hospital 0.07%
Teaching Hospital 32.4%
Veterinary 0.00%
Communicating Membership Changes
Vizient Presentation │ 3/23/16 │ Confidential Information12
Supplier Membership Site
13
Downloading membership changes
14
Vizient Members added J/F 2016– 7,588
Vizient Presentation │ 3/23/16 │ Confidential Information15
General COT Sub-Category
2016
Count General COT Sub-Category
2016
Count
General
COT Sub-Category
2016
Count
ACUTE Acute Medical School - AMC 2 AMB Rehabilitation 7 MCO Dental 7
ACUTE Ambulatory Surgery Center - AMC 2 AMB Surgery Center 1 MCO Faculty Practice 1
ACUTE Childrens General Medical & Surgical - AMC 1 AMB Universities, Colleges, Schools 1 MCO General Medical and Surgical 2
ACUTE Clinic/Medical Group 13 AMB Urgent Care Center 94 MCO General Medical and Surgical - AMC 2
ACUTE Clinic/Medical Group - AMC 2 HOME HEALTH Home Health Services 27 MCO Home Health Services 2
ACUTE Corrections Facility 1 HOME HEALTH Home Health Services - AMC 1 MCO Home Infusion Center 4
ACUTE General Medical and Surgical 74 HOME HEALTH Home Infusion Center 155 MCO Hospitalist 1
ACUTE General Medical and Surgical - AMC 21 HOME HEALTH Hospice 5 MCO Imaging Center 9
ACUTE Long Term Care Hospital 4 HOME HEALTH Specialty Pharmacy 12 MCO Laboratory 14
ACUTE Long Term Care Hospital - AMC 1 LTC Assisted Living 3 MCO Long Term Care 1
ACUTE Pharmacy 3 LTC Corrections Facility 1 MCO Non Care Giving 1
ACUTE Pharmacy Closed 3 LTC General Medical and Surgical 1 MCO Obstetrics and Gynecology 34
ACUTE Pharmacy/Retail 2 LTC Home Health Services 1 MCO Oncology/Radiation Center 88
ACUTE Psychiatric Hospital 4 LTC Hospice 1 MCO Orthopedic 1
ACUTE Ship To Location/Acute 1 LTC Long Term Care 9 MCO Osteopathic 1
ACUTE Specialty Pharmacy 1 LTC Pharmacy 1 MCO Pharmacy 1
ACUTE Warehouse 4 MCC Clinic/Medical Group 5 MCO Physicians 2
AMB Ambulance Service/EMT 1 MCC Mgmt. Service Organization 3 MCO Ship To Locations 7
AMB Ambulatory Care Center 38 MCC Pharmacy 2 MCO Student Health - Clinic 2
AMB Ambulatory Surgery Center 254 MCC Pharmacy Closed 1 MCO Urgent Care Center 22
AMB Blood Bank 42 MCC Pharmacy Retail/Closed 2 MCO Warehouse 4
AMB Clinic/Medical Group 46 MCO Acute Division/ Regional entity 2 RETAIL Clinic/Medical Group 4
AMB Clinic/Medical Group - AMC 1 MCO Ambulance Service/EMT 5 RETAIL General Medical and Surgical - AMC 1
AMB General Medical and Surgical 1 MCO Ambulatory Care Center 16 RETAIL Home Infusion Center 2
AMB Home Health Services 1 MCO Ambulatory Surgery Center 30 RETAIL Managed Care Plan 1
AMB Imaging Center 26 MCO Blood Bank 21 RETAIL Pharmacy 34
AMB Laboratory 4 MCO Business and Industry 4 RETAIL Pharmacy/Retail 17
AMB Oncology/Radiation Center 300 MCO Clinic/Medical Group 6,039 RETAIL Urgent Care Center 2
AMB Pharmacy 4 MCO Clinic/Medical Group - AMC 8 SCHOOL School (K-12) 2
AMB Physicians 1 MCO Corrections Facility 1 SCHOOL Universities, Colleges, Schools 2
340B Eligibility Changes
• Quarterly eligibility match to membership from HRSA
• Notice to contracted suppliers and distributors – all
eligible
• 340B PED changes also communicated
• No DSH program under PED
Vizient Presentation │ 3/23/16 │ Confidential Information16
Class of Trade & “Own Use”
Vizient Member Training Materials
What is Class of Trade?
Patient location (acute versus non-acute)
Prescriber control (clinic versus retail)
Drug Reimbursement (3rd party insurance)
Competition (open versus closed door)
Attempt to identify purchasing locations, grouped by specific purchaser characteristics
Why Suppliers Use Class of Trade in Contracts
“What kind of purchaser can influence the use of this product?”
Conversion from a competing product
Training on a complicated new drug to gain prescriber acceptance
Key Concern of Pharma:
Limit exposure to multiple discounts paid
Avoidance of “double dip” discounts to purchaser and payor
Strategy set by the Product Brand Team for each product
20
The Double Dip
GPO discount
Pharma Supplier
Provider Paid through
Pharmacy Benefit (PBM)
Provider paid through Medical Benefit (Acute)
Federal Provider (VA, DoD)
Rebate
Best Price
Discount
PBM GPO
COT Granularity
DEA License
(2)
Sample Supplier
(2-?)
Vizient
Membership
(7)
IMS
(135+)
IMS’s Healthcare Organization Services™ (HCOS) database
Vizient Presentation │ 3/23/16 │ Confidential Information22
From IMSHealth.com - HCOS documentation
Who Determines Class of Trade?
Not Vizient
Not the Health System
Supplier often determines COT choices and variables to evaluate
• Membership, regional sales, local reps
• Supplier field or internal staff
• Third party company (IMS)
• National association rosters and accreditations
• Member’s website
COT determined at the DEA level
24
“I should be getting acute pricing”
Vizient Presentation │ Date │ Confidential Information
North Memorial Urgent Care Clinic
9855 Hospital Drive
Any City, MT 55000
763-555-6666
North Memorial Urgent Care Clinic offers urgent care services to our patients on a walk-in, no appointment basis.
Hours
Monday through Friday, 8 a.m. - 8 p.m.
Saturday and Sunday, 8 a.m. - 8 p.m.
North Memorial Urgency Center in Other City is open 10 a.m. to 10 p.m. daily, including holidays.
Wholesaler
Eligible Purchasing Vs “Own Use”
“own use” regulations and COT restrictions
*Consult hospital Legal for guidance
HospitalClinic
Acute-only
In summary:
Lack of standard definitions causes member confusion
GPO COT assignment is often overruled
Fast-changing provider options blurring the issue even more
Vizient Presentation │ Date │ Confidential Information26
Thank You!
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