Health Plan (7.4) 7.4

P-OPS 8 - P&T Formulary Development

Submited by: Tom Goddard

The Basics

In order to promote appropriate, safe, and cost-effective use of medications, this standard defines the formulary oversight management functions by requiring that your organization have a Pharmacy and Therapeutics ("P&PT") Committee and a process for effectively and clearly managing a formulary. That process should include mechanisms to promote therapeutic appropriateness for drugs and drug classes during formulary development, and well-documented procedures regarding drug class review and inclusion. Additional, the entire P&T process should be regularly evaluated.

Management Tips

The P&P or charter that establishes the P&PT Committee should require meetings no less frequently than annually. "Annually" means every 12 months, not merely once each calendar year. Similarly, the regular review of the P&T process must occur at least annually.
You'll need to make sure not only that the proceedings of the committee are well-documented in meeting minutes, but also that related activities should be carefully documented, such as periodic evaluation of the formulary.
Delegation of PBM functions
One of the interesting questions we've encountered in our work with health plans since the release of this standard has been "must a health plan have a P&T committee?" Several of our clients, but not all, have had such a committee. To rephrase the question, "are the health plan pharmacy functions fully delegable, or must there be more oversight than is required by P-Core 6 - 9?"
The answer is that health plans may treat P-OPS 8-11 no differently than it would other delegable functions under the standards when it delegates to a PBM.
So, if the PBM to which the health plan delegates the functions covered by P-OPS 8-11 is not URAC-accredited, it must have pre-delegation standards (Core 6), a process for vetting the PBM against those standards (Core 7), a valid delegation agreement (Core 8), and a process for ongoing oversight of the PBM (Core 9). Of course, if the PBM is URAC-accredited, you need only have a Core 8-compliant delegation agreement.
URAC does recommend that oversight by the health plan meet the intent of "active oversight of their pharmacy and therapeutics program, including formulary development and management". Such oversight could be conducted by any designated health plan body with input from the Medical Director.
All of what I've just written resumes that your delegation is complete as to the cited standards, that is, you don't hold back any of the functions in those standards. However, if you second-guess your PBM's clinical formulary recommendations, you have not fully delegated the P-OPS 8 functions, and therefore should have your own P&T committee.

Accreditation Tips

Desktop Review
In addition to a P&P committee charter and related P&Ps, be prepared to submit sample meeting minutes and documentary evidence of your most recent formulary evaluation. We recommend that you prepare a separate formulary evaluation document, rather than relying only on meeting minutes, to demonstrate compliance with the requirement for periodic evaluation of the formulary.
Validation Review
The onsite review will consist of interviews of P&T-related staff and a review of committee meeting minutes.

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