Blue Cross FEHBP Pharmacy Benefits

Pursuant to a congressional request, GAO provided information on the Blue Cross and Blue Shield Association's two pharmacy benefit managers and the services they provide to federal employee benefit plans. GAO noted that: (1) to control drug costs, the Association is requiring Medicare Part B participants to pay the standard copayment for drugs bought at participating retail pharmacies, but it is waiving copayments on drugs bought through its mail-order program for those participants; (2) the Association expects this change to achieve significant savings and prevent a premium increase in standard option coverage; (3) the Association's mail-order subcontractor has had significant difficulty meeting its customer-service performance measures because the increase in mail orders has been much larger and quicker than expected; (4) the subcontractor has increased its processing capacity to meet the unexpected demand; (5) retail pharmacies have experienced a 36 percent decrease in drug sales to Part B participants and a 7 percent decrease in drug sales to all enrollees; and (6) the Association believes its pharmacy benefits managers provide valuable services to the federal employee health plan, meet most of their contractual performance measures, and produce significant savings.