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Insights

Jul 03, 2014

CVS Caremark Announces New Partnerships with Medicare ACOs to Reduce Drug Spending

Published

Jul 03, 2014

On June 27, CVS Caremark announced partnerships with seven additional Medicare accountable care organizations (ACOs) to improve pharmacy care and reduce drug spending for beneficiaries enrolled in CVS’ SilverScript Medicare Prescription Drug Plan (PDP).

SilverScript will reward its ACO partners for reducing drug spending though a one-sided shared savings model.  Meanwhile, SilverScript will only benefit from shared savings that result in improved management that reduce drug spending and not from savings achieved through avoided medical care (e.g., reduced hospitalizations), even if those savings are a consequence of improved medication adherence.   

Through these partnerships, the ACOs’ participating providers will be able to better track drug use for beneficiaries enrolled in a SilverScript PDP.  ACOs will be able to monitor the use of generic versus brand prescriptions and identify medication adherence issues using SilverScript’s real-time pharmacy data, accessible through a provider portal.  CVS Caremark and the ACOs can henceforth collaborate to create and implement interventions that improve medication adherence, limit gaps in care and reduce overall drug spending.  

The seven Pioneer and Medicare Shared Savings Program (MSSP) ACO partners (all located in California, Florida, or New Jersey) include:  CVS Caremark has previous partnerships with five other Medicare ACOs through its SilverScript PDP; however, the expansion of this initiative indicates that Part D plans and ACOs are interested in collaboration to help control drug spending.  Currently, Medicare ACOs are not accountable for Part D costs, and therefore managing drug spending is not their priority. While CVS Caremark’s partnerships with Medicare ACOs are a great first step towards integrating drug spending with accountable care efforts, until CMS more explicitly integrates accountability for Medicare Parts A, B, and D across ACOs and Part D plans, more innovative efforts to improve medication adherence and encourage the use of generic drugs will likely be limited.  

  1. Monarch Healthcare ACO
  2. National ACO
  3. American Health Alliance
  4. Orange Accountable Care
  5. Orange Accountable Care of South Florida
  6. West Florida ACO
  7. VirtuaCare ACO

CMS is expected to release their MSSP proposed rule in early July, which is currently under review at the Office of Management and Budget.  The proposed rule will apply to ACOs that join or renew starting Jan. 1, 2016.  

Avalere’s Center for Payment and Delivery Innovation closely monitors activities and trends pertaining to ACOs to provide clients guidance on how to best position themselves for commercial success in a new landscape. For more information contact Josh Seidman at JSeidman@Avalere.com.

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