Healthcare Payer Client Sustained PBM Contract Relationship While Yielding $90M in Recurring Cost Savings Through Contract Improvement

Situation

A large managed care organization covering more than one million lives was spending nearly $2.2B with their PBM annually. The MCO’s contract terms were unfavorable, and their fee schedule and administrative costs were not market competitive. 

Approach

AArete analyzed the PBM contract and created a comprehensive negotiation strategy, leveraging AArete’s industry market intelligence. Negotiations leveraged the MCO’s long-standing relationship with the PBM to target administrative costs, discount rates, minimum rebate guarantees, performance guarantees and other terms. 

Results

AArete helped negotiate $90 million in recurring savings while supporting MCO advisory related to contractual language that would further protect the MCO and enhance PBM transparency through recent legislation changes. 

Artificial Intelligence(AI) Azure Case Studies Contract Configuration Cybersecurity Data & Analytics Digital Applications ESG In The News Member Experience Solutions Network Solutions Payment Intelligence® Pharmacy Solutions Power BI Procurement Provider Data Management (PDM) Quality Services rithmiqai Wealth Management