Blue Cross and Blue Shield:

Change in Pharmacy Benefits Affects Federal Enrollees

T-HEHS-96-206: Published: Sep 5, 1996. Publicly Released: Sep 5, 1996.

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GAO discussed the Blue Cross and Blue Shield Association's change in prescription drug benefits covered under its federal employee health plan. GAO noted that: (1) the Association's payments for prescription drugs increased about 21 percent between 1988 and 1995; (2) to manage costs, the Association contracted with two pharmacy benefit managers (PBM) to provide retail prescription and mail order drug services; (3) to offset high prescription costs, the Association began requiring enrollees insured under the Standard Option Plan and covered by Medicare part B to pay 20 percent of their prescription costs at retail pharmacies; (4) the Association also encouraged enrollees to utilize the least expensive mail order option by offering prescriptions free of charge; (5) the demand for mail-order prescriptions surpassed contractor and Association expectations, causing delays in prescription orders and customer calls; (6) critics of the benefit change believe that millions of dollars in prescription drug sales will be shifted away from retail drug stores to the mail order program; and (7) the Association estimated that its two PBM saved $505 million in 1995.

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