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HIP Health Plan last year introduced an oncology product preferencing program in the greater New York City area. The educational campaign was aimed at encouraging physicians to use medications that cost less, but are therapeutically equivalent, to higher-cost versions, says Araksi Sarafian, the insurer's vice president for pharmacy services. HIP identified about 30 drugs that represent more than half of its oncology drug spending.

The program was launched shortly after CMS adopted substantial changes in its reimbursement to physicians for care of Medicare beneficiaries with cancer. The agency reduced reimbursement to physicians for oncology drugs while increasing their reimbursement for administration and patient care.

The health plan partnered with ICORE Healthcare, an Orlando, Fla.-based injectable benefit management company, to operate the program. "We sent letters to physicians explaining how the program works so they would not be surprised with the fee schedules devised," Sarafian says.

As a result of the program, HIP realized savings in every drug cost and an 18% overall reduction in unit costs, adjusted for inflation.

HIP also requires physicians to order injectable medications through ICORE. Not only does the company handle distribution, Sarafian says, but it also "provides education to providers as well as patients," she explains. For patients, the firm sends educational material to patients' homes and follows up to see if they have any questions, providing additional information as needed. She asserts that the program allows HIP not only to dispense the medications but also to help manage the disease.

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