Fawn, the way it works today is, your pharmacy (either mail-order or in-person) contacts the PBM, NOT the insurer, in real time to determine whether the drug is covered and if so, how much you have to pay to get it. The pharmacy never communicates to the insurance company directly. So when you go to your pharmacy to get a prescription, the amount you must pay is determined by the dollar amounts of deductible met, OOP max met, etc. that was valid the night before.
The PBM and the insurance company communicate once every 24 hours to update data like how much of your out-of-pocket maximum you’ve met, how much of your deductible you’ve met, etc. If you happen to have paid too much at the pharmacy, that issue is fixed on the back end of the insurance company by writing you a check, reducing the amount you have to pay the next time you go to your doctor, or other methods dictated by the specific contract.
Obamacare as written has taken what used to be contractual laws and agreements and turns it into black-letter Federal law. That means that the pharmacy and the insurance company are now legally liable in federal court if the pharmacy takes more than they should, or the insurance company processes a claim using data that hasn’t been updated by the pharmacy purchases.
In order to meet that black-letter law, specifically the deductible and OOP max laws, the PBM (who remember is not legislated to change their business process to communicate with insurers in real time) must access the insurer’s claims processing computer system at the very second you are standing at the pharmacy counter to determine how much money you must pay the pharmacy for that medication. That does not happen today. It’s no longer enough for the PBM and the insurer to fix any erroneous payment on the back end. Because the caps are black-letter law instead of contractually dictated, the pharmacy, insurer and PBM are now liable legally for mistakes in how much you pay for a prescription.
The legal liability and the inevitable errors that will result from trying to use static data for real-time decision making are very significant issues for pharmacies (and other medical supply/service companies) and insurers. The easiest way for a pharmacy to eliminate that liability is to refuse to accept insurance and force you to pay the full cost up front for your prescription. You can submit a paper claim to your insurer for reimbursement but that’s not going to help someone who needs $3000 to purchase that medicine at the counter.
That is from whence my scenario of a man going into diabetic shock at the pharmacy derives. When/if this nightmare goes into effect most people will not know how their medication purchases are going to change and will be stunned to hear that they need to write a check for thousands of dollars in order to get their medicine.
Does that help explain the issue?
It’s a very complex transaction that looks simple to the person standing at the CVS counter. Over the years pharmacies, PBMs and insurers have worked out procedures to limit the incidence of erroneous payments and address those errors when they do happen. Obamacare erases all of that and replaces it with a dictate that given the current state of technology in pharmacies, PBMs and insurers is impossible to implement for many, if not most, insurers/pharmacies/PBMs.
Ultimately the insurer is legally liable for those mistakes but we have no authority to demand that PBMs and pharmacies spend those billions of dollars to update their systems and processes. My company processes claims in neartime and can give access to our databases to PBMs, but PBMs aren’t interested in spending that time and money.
I hope this helps. I have a bad habit of getting into too much detail and clouding the answer. The very basic answer is that your pharmacy and your insurer never communicate, and the middleman between your pharmacy and insurer communicate once every 24 hours. All of that must change to be in compliance with Obamacare.