Introduction
Traditional pharmacy claims adjudication has long been the domain of large Pharmacy Benefit Managers (PBMs). These entities handle everything from contracting and formulary management to actual claims processing. While this vertical integration can simplify administrative workflows, it often leaves payers and large-employer groups with limited transparency and fewer choices. Enter the new ecosystem model: Instead of relying on a one-stop PBM monolith, plans and self-insured employers can outsource claims processing to independent adjudicators, then layer on their own formulary logic and clinical guidelines. This unbundled approach enables greater flexibility, cost control, and room for innovation.
Why Outsource Claims Processing?
- Cost Savings – By separating claims adjudication from other PBM functions, payers have the freedom to shop around for the most cost-effective solutions. Independent claims processors often operate with lower overhead and pass the savings back to clients.
- Faster Time-to-Market – Standing up a new plan design or program can be as simple as adding rules to the outsourced adjudicator’s platform. No need to wait on extensive internal development or legacy system upgrades.
- Leverage Existing Infrastructure – Third-party processors specialize in claims routing, payment calculations, and compliance. They’ve already built the technology and expertise, so you don’t have to reinvent the wheel.
Architecture of the New Model
In this next-generation structure, the health plan or self-insured employer layers intelligent formulary logic on top of an outsourced claims processor. Real-time integration enables prescription eligibility checks, patient cost-share calculations, and notifications to pharmacists or prescribers about formulary alternatives. By unbundling claims administration from the PBM’s rebate and spread-pricing activities, employers gain more visibility into actual costs and can deploy custom clinical protocols with minimal friction.
Pilot Example
Imagine a single mid-sized employer partnering with an independent adjudicator—let’s call them “Acme Claims.” The employer develops its own formulary strategy, focusing on high-value generics and clinically proven, best value specialty therapies. Acme Claims handles the technical side of prescription transactions, ensuring claims are processed quickly and accurately. Meanwhile, the employer’s pharmacy benefits consultant monitors usage data and adjusts coverage rules in near real time, without waiting on a traditional PBM’s quarterly or monthly update cycle. The result: lower operational costs, dynamic market coverage, and a more patient-centric benefit.
Maintaining Regulatory Compliance
When you outsource claims processing, compliance with HIPAA, state regulations, and contract transparency remains important. It’s crucial to partner with a processor that has robust security protocols and a proven track record of regulatory adherence. Transparent contracting—where admin fees and any additional service costs are clearly defined—helps avoid hidden revenue streams that are common in more opaque PBM models.
Recommended Claims Processor Options
Several third-party processors cater to plan sponsors seeking a more flexible, unbundled PBM alternative. Examples include:
- Change Healthcare – Offers a broad suite of claims services with advanced analytics tools.
- DST Pharmacy Solutions – Known for customizable platforms and robust security features.
- SmithRx – Focuses on transparent pricing models and real-time adjudication.
- RxAdvance – Cloud-based platform emphasizing AI-driven cost containment.
Conclusion
Outsourcing claims processing can fundamentally reshape how pharmacy benefits are delivered—breaking away from the monolithic PBM structure and opening doors to leaner, more innovative solutions. By aligning expertise from independent processors, transparent contracting, and forward-thinking formulary management, employers can seize the opportunity to reduce costs, improve member satisfaction, and maintain regulatory integrity. Unbundling the PBM stack isn’t just a trend—it’s the future of agile, patient-centric pharmacy benefit design.
FAQ
1. What is claims adjudication?
Claims adjudication is the process of determining coverage, reimbursement amounts, and patient cost-sharing for prescription drugs. It ensures that each claim follows the plan’s rules and calculates payments accurately.
2. Why should I outsource claims processing instead of using a traditional PBM?
Outsourcing offers cost savings, faster plan customization, and greater visibility into actual drug costs. It separates core claims functionality from other PBM activities, allowing for greater transparency and flexibility.
3. Which companies provide third-party claims processing services?
Notable providers include Change Healthcare, DST Pharmacy Solutions, SmithRx, and RxAdvance, among others. Each offers unique capabilities, so it’s crucial to evaluate them based on cost structure, platform features, and regulatory track record.
4. How can employers maintain regulatory compliance when outsourcing?
Employers should partner with adjudicators that have rigorous data security measures, audit trails, and documented compliance with HIPAA and state regulations. Transparent fee structures and contracts further reduce legal risks.
5. Can smaller employers benefit from this unbundled model?
Absolutely. Even mid-sized and smaller employers can leverage outsourced adjudication to gain more control over pharmacy spending, customize plan design, and avoid hidden fees often found in larger, all-in-one PBM arrangements.
