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CMS utilizing OTC card network to cover self-care; private plans next

BY Michael Johnsen

REDWOOD CITY, Calif. — The use of over-the-counter medicines as a cost savings tool is catching on, of all places, at the Centers for Medicare and Medicaid. Certain plans under Medicare are utilizing a new prepaid card of sorts to allow members to pay for their OTC medicines. Medicaid administrators, meanwhile, are employing that same card to incentivize healthier behavior among its members.

"A member can take one of our cards into a CVS or Rite Aid, swipe our card, and the card will only be authorized [to pay for] a list of eligible [OTCs] approved by the Centers for Medicare and Medicaid," Medagate CEO Devin Wade told Drug Store News.

Medagate has created an over-the-counter healthcare benefit called OTCNetwork, in partnership with prepaid-card marketer InComm, that now is being presented to private health insurers as a way to conveniently cover OTC medicines as a potential plan benefit. Many health plans already cover OTCs as a pharmacy benefit, Wade said. But the purchase pattern is not instinctual — patients still have to take those nonprescription items, identify them as covered expenses, and have those purchases adjudicated by the pharmacist in a separate transaction. "This would allow [insurers] to really expand that benefit and have that front-of-store normal purchase behavior," Wade said.  

Even though retailers have sophisticated point-of-sale systems capable of identifying and netting out those eligible products, especially since the inclusion of OTCs as eligible flexible spending account expenses in 2003, Medagate is the first to coral that functionality into a customizable payment card solution that plan members can use at the counter.

The myriad possibilities in utilizing this card is almost as numerous as the number of potential OTCs that the card can be used to purchase. For example, while no precedent exists today certainly, the card could be used as the kind of technological enabler switch expert Steve Francesco characterized to help drive more complex Rx-to-OTC switches over the next five years (to read that report, click here). For example, health plans could issue these cards to all plan members, and restrict sales of a particular OTC product to only patients on a specific medicine regimen — patients identified by a healthcare professional as eligible for statin therapy, for example. "That’s a perfect scenario for our network, absolutely," Wade told Drug Store News. The card can authorize or restrict a sale based on any number of criteria, including diagnosis. The card can also restrict the amount of product purchased by month.

Medagate and InComm earlier this year launched a card that Medicare patients can use to pay for OTCs under Medicare Part C. The Centers for Medicare and Medicaid Services allow health plans to issue payment cards to seniors for the purchase of OTC items at drug and grocery stores, but only if the retailer can identify the eligible items and limit the payment card to those items. Wade identified Medicare plans in Florida, New York and Texas as some of the early adopters of Medagate’s OTC payment solution. For the 2012 plan year, another 20 Medicare plans nationwide are planning to utilize the OTCNetwork, he said.

Medagate utilizes InComm’s point-of-sale card activation retail network, which reaches some 225,000 retail outlets, as the behind-the-scenes driver of Medagate’s OTCNetwork benefit. "We partnered with InComm to use that network [as a tool] to authorize spend at these retailers," Wade said. "We wanted to be able to create rules around what the card could be used for. We have the ability to restrict the spend on our cards down to the product level."

Medagate also launched its OTCMedicaid card platform earlier this year, a program developed to help Medicaid Programs improve Health Effectiveness Data Set scores through administered OTC benefit and health incentive programs. Due to new Health Care Reform mandates, Medicaid programs nationally are seeking to improve compliance with HEDIS-based wellness as a measure of program success and funding.  The OTCMedicaid Card enables Medicaid Programs to more efficiently provide and administer OTC benefits for use in member self-care, and also provide cash incentives for OTC items to influence behavior around routine health maintenance, such as smoking cessation, for example.
 
In May, The Health Plan of San Mateo leveraged the OTCMedicaid Card to offer health incentives to its 52,000 Medicaid members in Northern California for the completion of routine health screenings.

“A core area of focus for our plan is encouraging our women members due for mammograms and Pap tests to participate in these potentially life-saving health screenings and exams in a timely way,” said Mary Giammona, medical director at The Health Plan Of San Mateo, at the time of the announcement.  “The OTCMedicaid card gives us the ability to offer incentives that can be used only for OTC Medicaid eligible items like vitamins, first aid products and OTC medications upon completion of health screenings and well visits — a strategy we believe will not only improve health outcomes, but also reduce our overall program costs," added Ron Robinson, director of Financial and Administrative Services.

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New survey sheds light on top supermarket customer service

BY Katherine Field Boccaccio

TORONTO — Safeway and Wegmans ranked highest across all customer service elements, according to a survey by Empathica.

Empathica, a customer experience management solution-provider, polled more than 16,000 consumers, and found that operations and merchandise were the two most important elements in grocery shopping versus other elements, such as promotions, people and technology.

While Wegmans had the highest scores across all service elements, Trader Joe’s, Publix Super Markets, Harris Teeter and Whole Foods Market also ranked high across 4-out-of-the-5 service areas, yet fell short with promotions. The promotions category took into account loyalty programs, availability of coupons, as well as pricing, availability and frequency of promotions.

“In light of current economic conditions, grocery stores must pay attention to all service areas in order to preserve customer loyalty,” Empathica VP grocery Brian Jones said. “Promotions are no exception.”

Although 48% of respondents consider electronic offers to be important, one-third felt those offers did not always meet their expectations, Jones said.

In Canada, Safeway had the highest score in meeting customer expectations across all service areas. Wal-Mart Stores ranked near the bottom of the list for operations, people and promotions among Canadians. In the United States, Wal-Mart ranked among the lowest in those same service areas, in addition to merchandise. A&P, C&S Wholesale Grocers and Unified Grocers also ranked among the lowest across all five service areas.

More than 85% of surveyed consumers indicated they would spend more or the same at grocery stores and supermarkets within the next three months. Additionally, more than half of consumers reported spending more than half of their grocery dollars at their primary supermarket.

“According to the survey, a considerable number of U.S. consumers shop at Walmart for their groceries. In fact, more than one out of every four consumers shopped for groceries at Walmart,” Jones said. “This is largely indicative of their prices.”

In the Midwest, the top five grocers based on overall customer experience were Giant Eagle, Meijer, Kroger, Hy-Vee and Aldi. The Northeast was topped by Wegmans, Delhaize America, Ahold USA, Wakefern Food Corp. and Giant Eagle.

In the south, Harris Teeter, Publix, Kroger, H-E-B and Safeway were the top five. And in the west, it was Kroger, Safeway, Supervalu, Costco and WinCo.

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Reports: Big Y bids farewell to self checkout

BY Allison Cerra

SPRINGFIELD, Mass. — Big Y is saying "so long," to its self-service checkout lanes at its stores, according to published reports.

The New England-based retailer is slated to phase out self-serve lanes at all 61 locations.

"After extensive research, Big Y has concluded that these self checkout lanes not only do not save their customers time but usually take them even more time to check out than customers in standard checkout lanes," the company said in a statement. “Self-checkout lines get clogged as the customers needed to wait for store staff to assist with problems with bar codes, coupons, payment problems and other issues that invariably arise with many transactions."

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