Medical utilization management 101: Taking down rising medical drug costs

October 2, 2018

Management of specialty drugs covered on the medical drug benefit should be more than just a side note. In fact, medical drugs account for nearly 40 percent of all specialty drug spend. Still, even as drug costs are rising, and medical drugs are coming through the pipeline, opportunities to lower costs on the medical benefit are being missed.

Through Prime Therapeutics’ (Prime) medical utilization management (medical UM), plans can delegate both pharmacy and medical reviews into one place, helping to better manage high cost specialty drugs.

What is a medical utilization management?

To understand medical UM, first you need to understand the process.

On the pharmacy benefit, claims are processed in real time — your employees know whether a claim is denied or whether it requires prior authorization to be fully covered. And, most importantly, your employees know how much they have to pay for their drugs. The same is true for the payer. As the payer, you have the option of putting utilization management (UM) in place – like prior authorization or step therapy – before the drug is given to the employee. This helps promote high quality and cost-effective drug therapy.

This is not the case on the medical benefit. Medical claims are not processed in real time. For example, when your employee receives drugs or services in a doctor’s office, they (and you) do not receive the explanation of benefits (EOB) and bill until after the fact. This means that a different type of utilization management process is vital. That’s where medical UM plays a powerful role.

Medical UM applies evidence-based clinical criteria to drugs covered under the medical benefit. Prime does a prospective analysis of Blue Plan clinical member data and implements programs to increase appropriate drug use. Member-specific clinical data may include intended diagnosis, lab results, and the effectiveness of past medications. By reviewing these data before the prescribing and administration of a given drug, ineffective, unsafe and costly drug therapy can be avoided.

Strategies included in medical UM:

Prime’s medical UM program uses a variety of tools to improve quality of care and decrease costs.

  • Prior authorization: applies evidence-based guidelines to prevent inappropriate use.
  • Dose, duration and frequency verification: ensures the prescribed drug’s dosage regimen is consistent with FDA labeling and/or published clinical evidence.
  • Shift to preferred products: encourages selection of lower cost therapeutic alternatives.

Big savings with medical UM

Prime helped a new client implement medical UM, saving $18.5 million within 45 days which equates to $5.08 PMPM year-over-year.1

Blue + Prime for total drug management

Prime’s integration with Blue plans provides for a comprehensive perspective of specialty drug management on both the pharmacy and medical benefits. We understand that drug products covered on the medical benefit require the same oversight as those covered on the pharmacy benefit. Moreover, when medical and pharmacy policies are aligned, you give your employees a consistent experience, and you have a better handle on your spend. With Medical UM, specialty trend can be more effectively managed.


  • 1 Prime Therapeutics internal data, 2018.