Utilizing a PSAO's Strategic Alliance for Success During Open Enrollment


A high performing Pharmacy Services Administrative Organization (PSAO) actualizes its value proposition to its participating pharmacies by entering into viable strategic partnerships that add value to an independent pharmacy’s workflow processes.

A high performing Pharmacy Services Administrative Organization (PSAO) actualizes its value proposition to its participating pharmacies by entering into viable strategic partnerships that add value to an independent pharmacy’s workflow processes.  Frost and Sullivan describe strategic partnerships as alliances that work best when the existing capabilities of each party augment the competencies or resources of the other, creating a synergy that makes it possible to deliver a unique value to an end user.

Forging an Alliance to Deliver Value

One example of an alliance between a PSAO and a strategic partner is the recent collaboration between Arete Pharmacy Network, the nation’s fourth largest Pharmacy Services Administrative Organization (PSAO) and iMedicare, the leading Medicare plan comparison platform for community pharmacies. The two companies recently announced a partnership aimed at making innovative tools available to participating pharmacies of Arete Pharmacy Network that can be leveraged to gain a competitive advantage during the Medicare Part D open enrollment season. As the open enrollment period progresses, pharmacies will be presented with opportunities to reach new patients who a) have recently become eligible, b) are approaching eligibility to receive Medicare benefits, and c) may benefit from changing Medicare plans.

Gaining a Competitive Advantage with Technology

During open enrollment season, a pharmacy can seize the chance to establish itself as a competent partner to both existing and prospective patients by proactively providing education on stand-alone Prescription Drug Plan (PDP) and Medicare Advantage (MA) plan options for the upcoming year. The Centers for Medicare and Medicaid Services (CMS) has made guidelines available to ensure that a pharmacy’s marketing activities are carried out in compliance with requirements and related provisions outlined by the Medicare Advantage and Medicare Prescription Drug Benefit rules.

For Arete Pharmacy Network’s participating pharmacies, utilizing the capabilities of iMedicare’s software platform simplifies the process of identifying upcoming and newly eligible Medicare patients. The seamless integration of the iMedicare platform with a pharmacy’s software system facilitates a quick and easy import of patient medications and related information. Together with the availability of pre-written letter templates, phone call scheduling, and text message outreach, a pharmacy can easily create an effective and well-targeted communication campaign with personalized details on copays for medications, premium, deductible, and annual out-of-pocket costs.

The Low-Income Subsidy (LIS) Beneficiary

There is a unique Medicare patient that may require specialized attention year-round-the Medicare Low-Income Subsidy (LIS) beneficiary. This Medicare designation refers to a patient who is eligible for financial assistance that pays for Medicare Part D monthly premiums, annual deductible, coinsurance, and copayments. LIS eligibility is based on income and asset levels specified in the Social Security Administration’s Supplemental Security Income (SSI) program. According to the 2016 Kaiser Family Foundation report on Medicare Part D trends, nearly three in ten Medicare Part D enrollees receive financial subsidies through the LIS Program.

As part of the LIS program, a set of benchmark plans are made available to beneficiaries each year. A benchmark plan is one that has been designated as the standard for essential health benefits (EHBs) and requires no premium to be paid by an LIS beneficiary. CMS released its latest report on premiums and costs for Medicare Advantage and stand-alone PDPs on September 22, 2016. Where a PDP in which the LIS patient was previously enrolled is no longer designated as a benchmark plan based on a premium level that is above the regional LIS benchmark for instance, CMS reassigns the affected LIS beneficiary to a new benchmark plan. Beneficiaries can however elect to enroll in a plan that has not been designated as a benchmark plan and pay a premium-in this instance, reassignment will not apply.

For an independent pharmacy, the unique opportunity lies in the fact that for an LIS beneficiary, making a plan change is not limited to the open enrollment period. Jeff Jerkins, RPh, owner of Alabama-based Bubba’s Medicine Shop- a member pharmacy of Arete Pharmacy Network, has leveraged iMedicare’s technology to help LIS beneficiaries explore new Medicare plan options with success.“The iMedicare platform saves time which ultimately saves me money. It gives me the ability to provide pertinent information to patients that will help them determine which plans may be of the lowest cost to them, based on their specific needs,” Jeff said.

According to Jeff, Bubba’s Medicine Shop has had great success with LIS beneficiaries who have made changes to their PDP. By taking advantage of the iMedicare platform’s Formulary Lookup tool to identify any changes in medication lists, the pharmacy is able to estimate reimbursement amounts for each plan option to ensure profitability. Additionally, cost savings can be realized for the patient where the copay amount remains unchanged.  The ability to review any Direct and Indirect Remuneration (DIR) fees associated with each plan also impacts how closely the estimated reimbursement amount to the pharmacy mirrors reality.

In the case of a particular LIS beneficiary, Bubba’s Medicine Shop saw a monthly increase of $200 in reimbursement for medications. “This increase was more than enough to recoup the cost of the annual subscription for the iMedicare platform and still ensure a healthy margin on the medications,” Jeff said. Replicating best practices on the use of the iMedicare platform in this instance across the pharmacy’s entire LIS patient population could have a significant impact on the amount of revenue gained from this population.

An alliance such as the one between Arete Pharmacy Network and iMedicare serves as a great example for combining the unique competencies of two industry partners to create value for independent pharmacies and build lasting relationships.


Frost & Sullivan (n.d). Growth process toolkit. Retrieved from: http://ww2.frost.com/files/7414/1391/2726/Strategic_Partnerships.pdf

Kaiser Family Foundation (2016). Medicare Part D in 2016 and trends over time. Retrieved from http://files.kff.org/attachment/Report-Medicare-Part-D-in-2016-and-Trends-over-Time

Social Security Administration (2015). Supplemental security income. Retrieved from https://www.ssa.gov/pubs/EN-05-11000.pdf

The Centers for Medicare and Medicaid Services (2009). Guidance to states on the low-income subsidy. Retrieved from https://www.cms.gov/Medicare/Eligibility-and-Enrollment/LowIncSubMedicarePresCov/Downloads/StateLISGuidance021009.pdf

The Centers for Medicare and Medicaid Services (2016). Information on essential health benefits (EHB) benchmark plans. Retrieved from https://www.cms.gov/cciio/resources/data-resources/ehb.html

The Centers for Medicare and Medicaid Services (2016). Medicare marketing guidelines. Retrieved from


The Centers for Medicare and Medicaid Services (2016). Prescription drug coverage. Retrieved from https://www.cms.gov/Medicare/Prescription-Drug-Coverage/PrescriptionDrugCovGenIn/index.html


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