Agelity. Presentation for. Local United Way Organizations. Agelity. Discount Prescription Drug Program. powered by

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1 Agelity Discount Prescription Drug Program Presentation for Local United Way Organizations powered by Agelity

2 Agelity and Plan Overview Agelity was Founded in 2001 Unlike most Discount Providers, Agelity contracts directly with its pharmacy partners resulting in some of the richest discounts in the industry. Over 53,000 Participating Pharmacies Nationwide Drug Savings and Utilization (since 2007) Total Claims: 11 million Total Drug Spend: $370 million Total Savings: $171 million (average Member Savings 32%) Average Member Savings 20% on Brand Drugs 40% on Generic drugs

3 Agelity and Plan Overview Discounts Apply to All Prescription Drugs Plan Applies to All Family Members Plan has No Usage Limits Plan has No Expiration No Enrollment or Reoccurring Fees In addition to the member benefits, Agelity incorporates a revenue sharing model which enhances the sponsors ability to successfully implement the program. Agelity provides a complete, sponsor branded, turnkey Discount Prescription Drug Program with an emphasis on time to market. Agelity strives to meet all State licensing, registration and compliance requirements.

4 Agelity Revenue Model Revenue is Based Solely on Member Usage As stated earlier, there are no enrollment or reoccurring fees. Member is charged a processing fee only if the Plan provides the member with a discount on their prescription purchase. The member is never disadvantaged by using the plan. The processing fee is deducted from the member discount amount and is collected by the pharmacy. Agelity collects all processing fees from our pharmacy partners on a monthly basis. The following provides a detailed description of how and when the processing fee is applied.

5 Agelity does not charge an enrollment fee or any other type of reoccurring fee to its members. Agelity is sensitive to the fact that members may not use the product on a regular basis and therefore may actually experience higher prescription costs with a fixed fee or a reoccurring fee model. Therefore, Agelity s revenue stream is purely based on member usage in the form of a processing fee at the point of sale. The processing fee is only applied if Agelity s negotiated discount rates with the pharmacy provide a discount to the member. The following describes the application of the processing fee: Whenever a member uses their Discount Prescription Card at a participating pharmacy, a processing fee may be retained by the pharmacy and collected by Agelity at the end of each month. The rules for applying the processing fee are as follows: Application of Processing Fee During the adjudication process, the pharmacist will enter, into their point of sale system, the member s drug information (NDC Number, quantity, etc.) along with the pharmacy s U&C (Usual and Customary) price. The transaction is then transmitted to Agelity s claims adjudication system in which Agelity s negotiated discount rates are applied to the cost of the drug. The pharmacy s dispensing fee plus the processing fee are then applied to create a total cost to the member. If the calculated total cost is higher than the pharmacy s submitted U&C price then the pharmacy is instructed to charge the U&C price. In other words, the member is never disadvantaged by using the card. Since Agelity s negotiated rates did not provide a discount to the member, Agelity did not receive a processing fee. In fact, Agelity actually incurs a cost to process the claim. If the calculated total cost is lower than the pharmacy s submitted U&C price then the pharmacy is instructed to charge the discounted price. A portion of the pharmacy s discount is retained by the pharmacy in the form of the Agelity processing fee. Agelity bills the pharmacy each month for processing fees retained by the pharmacy. Again, if Agelity s negotiated rates could not provide a discount to the member, Agelity would not receive a processing fee.

6 Sponsor Program Provides the Following Revenue Sharing with Sponsor is paid monthly by check or EFT (Electronic Funds Transfer) Assigned dedicated Agelity Account Representative Pharmacy Help Desk ( ) Member Services Number ( ) Secure Online Reporting Monthly Utilization & Savings Reports Monthly Revenue Sharing Report Sponsor Branded Marketing Material Leaflet/ Member ID Cards Sponsor Branded Online Pharmacy Tools

7 Sample Sponsor Branded Leaflet / Member ID Card Front of Leaflet Back of Leaflet

8 Secure Monthly Online Sponsor Reports Claim Utilization Summary Report This report represents monthly prescription claim counts at the Group level. Groups are designed to present utilization for the United Way organization along with their participating affiliate organizations (i.e., Salvation Army, YMCA, Food Pantry, etc.). Claim Utilization Detail Report This report represents monthly prescription claim detail at the Group level. Detail includes drug description, pharmacy, date filled, pharmacy price, member cost and savings amount. Savings Analysis Summary Report This report represents monthly prescription member savings analysis at the Group level. Group information includes total claims, total member cost, total submitted cost (pharmacy price), total member savings amount and total member savings percent. Revenue Sharing Report This report represents monthly revenue sharing to the United Way organization and also demonstrates revenue generated at the Group level. * Agelity, Inc. allows for annual auditing and verification of claim utilization. The following slides represent sample monthly reports which are available online to our partners.

9 Sample Claim Utilization Summary Report

10 Sample Claim Utilization Detail Report

11 Sample Savings Analysis Summary Report

12 Sample Revenue Sharing Report

13 Sample Revenue Sharing Report

14 Distribution Strategies The success of the Discount Prescription Plan is directly correlated to the distribution efforts of the sponsor. The following are proven marketing strategies: Direct Mailing campaigns (proven to be very successful) Mailing campaigns should include an introduction letter by the sponsor. Including Discount Prescription Plan leaflets and Member ID cards with other direct mailing campaigns. Communications to members via newsletters informing them about the Discount Prescription Plan and how to obtain their Member ID cards. Physical distribution at sponsor held events. Predominately displayed Discount Prescription Plan link on Sponsor website homepage. Request the above efforts of your Business Partners and Affiliate Organizations. Reviewing utilization reports provided by Agelity to fine tune distribution efforts.

15 Sponsor Branded Pharmacy Tools From the Online Sponsor Branded Pharmacy tools you can: Locate participating pharmacies near you. Identify which pharmacies are providing the lowest cost for your particular drugs. Identify Pharmacy Services such as home delivery, drive through and 24 hour service. Automatically identify generic alternatives to brand medications. This feature typically presents participants with huge cost savings opportunities. Review drug education information which includes drug uses, side effects, precautions, drug interactions, storage, etc. View Drug images which is a useful feature when purchasing drugs that have multiple manufactures and vary in appearance. Identify Mail-Order pricing and download enrolment application. Convert entire website to Spanish with one simple click!

16 Additional Discount Pharmacy Products Slated for 3 rd Quarter 2010 Specialty Drug Program Offers deeper discounts on vital high cost drugs within the following drug classes: Anemia Hormone Replacement Rheumatoid Arthritis Asthma Immune Deficiency / IVIG RSV Prevention Contraceptive Infertility Thrombocytopenia Deep Vein Thrombosis Multiple Sclerosis Thyroid Endometriosis/Cancer Neurologic Urologic Gaucher Disease Neutropenia Vaccines Growth Hormone Deficiency Hematologic Hepatitis HIV Wasting Oncology Osteoarthritis / Osteoporsis Psoriasis Pulmonary Disorder

17 Additional Discount Pharmacy Products Slated for 3 rd Quarter 2010 Diabetic Care Program Offers free diabetic supplies to those who qualify Diabetic supplies are also provided to those enrolled in the Medicare Part B program Free supply of sugar free multi-vitamins are provided with each order Payment Assistant Program Provides additional payment assistance from various drug manufactures on certain high cost prescription drugs.

18 Compliance and State Regulations As discount health related plans become more popular, States are increasing their efforts to oversee and regulate the entities associated with these programs. To date there are 23 States requiring licensing or registration of Discount Medical Plan Organizations (DMPO). Of these 23 States, 15 currently have regulations that extend to Discount Prescription Drug Programs. Listed below is Agelity s current status within the 15 States: Illinois Registered Kansas Registered Louisiana Registered Maryland Registered Montana Registered New Hampshire Registered Nevada Submitted to State for Approval Oregon Registered South Carolina Registered South Dakota Registered Tennessee Registered Texas Registered Utah Registered Washington Submitted to Legal Counsel for Review West Virginia Registered

19 Compliance and State Regulations Potential Risks for Non-Compliant Sponsors and Providers: Levy a civil penalty on the entity up to $10,000 for each violation. Issue a cease and desist order against the entity. Seek a permanent injunction in Court against the entity. Additionally, please note in the second attachment that any person who willfully operates as or aids and abets another entity operating as a DMPO in West Virginia is guilty of a felony and can be fined up to $20,000 for each unauthorized act and/or imprisoned in WV for not less than 1 nor more than 5 years. As per West Virginia Insurance codes; 33-15E-14 and 33-15E-15 Note: This statute is based on West Virginia law. Many other states have similar statutes and fines.

20 Compliance and State Regulations Agelity understands that compliance is a very serious issue. For this reason Agelity has dedicated significant resources towards this effort. In order to expedite the state DMPO registration process and to ensure proper compliance, Agelity has retained the services of a nationally recognized law firm specializing in state registration and compliance issues. If you have any questions regarding Agelity s compliance status with any state, please feel free to contact: Mike Stuhler Chief Compliance Officer Agelity, Inc. (631) MStuhler@Agelity.com

21 Agelity would like to thank you for your time and interest in the Discount Prescription Drug Program. Please take this time to review our extensive Online Pharmacy tools.