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Wellfleet Rx ’23-’24 plan year utilization management results

An analysis of the Wellfleet Rx Utilization Management (UM) program for the 2023-2024 plan year revealed significant cost savings and improved prescription drug management for our student health insurance plans.

What is utilization management?

Simply put, Utilization Management (UM) is a process insurance companies use to assess claims for medical necessity, safety, appropriateness of the selected therapy, and any cost-saving options.

For example, let’s say your doctor prescribes you an expensive, brand-name medication that could lead to high out-of-pocket costs. Before approving that medication, Wellfleet Rx would reference utilization management techniques, such as identifying first-line treatment options and clinically proven generic alternatives.

Wellfleet Rx uses three types of utilization management techniques:

  • Step therapy – A practice that starts members with preferred medications for their treatment (a ‘step’ drug) before non-preferred medications are covered.
  • Quantity limits – A structure that limits the quantity dispensed, to help ensure safe and appropriate dosing.
  • Prior authorizations – A pre-approval process where clinical criteria need to be met, and prescribers may be required to submit documentation prior to obtaining the medication.

Each of these methods can result in lower costs to students, and they can even help limit rises in yearly premiums for schools.

Substantial cost savings

The potential cost of the inappropriate medication that has a utilization management strategy (e.g., prior authorization, quantity limit, step therapy) was compared to the actual cost of the subsequently filed medication (if any), either for a different product, a different quantity, or the same product after review and approval.

Here’s a summary of the key findings and benefits:

The UM program generated impressive savings across three main strategies:

  • Prior Authorization: $52.92 PMPY savings1
  • Step Therapy: $9.36 PMPY savings1
  • Quantity Limits: $25.56 PMPY savings1

The most common categories of drugs observed with utilization management activities were diabetes/weight loss, dermatology, and psychotherapeutics. In total, we experienced $87.72 PMPY in plan savings during the 2023-2024 plan year due to applied Utilization Management techniques.1

Wellfleet Rx data-driven approach

The UM program offers various pathways for claim approval, ensuring that students receive appropriate medications while managing costs:

  • Alternative medications
  • Adjusted quantities
  • Approval of original prescriptions after review

This data-driven approach to pharmacy benefit management aligns with Wellfleet’s commitment to providing innovative, cost-effective, and student-centric health insurance solutions.

By implementing these strategies, Wellfleet Rx is balancing the need for comprehensive prescription coverage with cost-effective management, resulting in significant savings for our partner institutions and, ultimately, for students.

Contact your Wellfleet representative for more detailed information or to discuss how the Wellfleet Rx Utilization Management program can benefit your institution.

Disclaimers

1 Wellfleet. (2025, January 3). Wellfleet Rx Student Formulary Outcomes from Utilization Management. 9331 PY23-24 Member Level Detail & Savings Final 10.30.24. Unpublished, internal company document.

Wellfleet, Wellfleet Student, Wellfleet Special Risk, and Wellfleet Workplace are marketing names used to refer to the insurance and administrative operations of Wellfleet Insurance Company, Wellfleet New York Insurance Company, and Wellfleet Group, LLC (known in California only as Wellfleet Group, LLC dba Wellfleet Administrators, LLC). All insurance products are administered or managed by Wellfleet Group, LLC. Product availability is based upon business and/or regulatory approval and may differ among states. ©2025 Wellfleet Group, LLC. All Rights Reserved

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©2025 Wellfleet Group, LLC. All Rights Reserved.

Wellfleet is the marketing name used to refer to the insurance and administrative operations of Wellfleet Insurance Company, Wellfleet New York Insurance Company, and Wellfleet Group, LLC. All insurance products are administered or managed by Wellfleet Group, LLC. Product availability is based upon business and/or regulatory approval and may differ among companies.