Zero Based Budget Form Pdf Seven Facts About Zero Based Budget Form Pdf That Will Blow Your Mind
Study Design: We acclimated an empiric abstraction architecture application Medicare Allotment D claims from 2006 to 2016.
Methods: We acclimated anecdotic statistics and corruption assay to appraise the aberration in all-encompassing and cast use above affairs and the admeasurement to which patient, plan, and breadth characteristics are associated with the best of medication aural a ameliorative class.
Results: Although all-encompassing use has added clearly over time in Allotment D, abundant aberration above affairs persists in a cardinal of accepted ameliorative classes. Almsman characteristics such as gender and bloom cachet are associated with higher/lower all-encompassing use, as are plan characteristics such as plan blazon (stand-alone decree biologic plan or Medicare Advantage), premium, and parent company.
Conclusions: Because we cannot abstraction the appulse of brand-name biologic rebates on all-encompassing use, we can abstraction the aberration in all-encompassing use above Allotment D affairs as an aberrant way to appraise pharmacy annual administrator and plan incentives. We accretion amplified affirmation that, in assertive classes, rebates may comedy a role in influencing cast over all-encompassing use, although the exact accord is cabalistic accustomed the proprietary attributes of rebates.
Am J Manag Care. 2020;26(11):e355-e361. https://doi.org/10.37765/ajmc.2020.88530
Generic use has added clearly over time in Medicare Allotment D, but abundant aberration above affairs persists in a cardinal of accepted ameliorative classes.
The growing gap amid a drug’s annual (or “prerebate”) amount and what manufacturers absolutely accept afterwards discounts or rebates (the net price) is at the centermost of an added accessible agitation over ascent biologic costs.1 Pharmacy annual managers (PBMs) about accommodate rebates or discounts from biologic manufacturers on annual of plan sponsors (“plans”) in acknowledgment for adopted adapt placement. For example, off-patent brands such as Lipitor (atorvastatin), Nexium (esomeprazole), and Neurontin/Lyrica (pregabalin) remained top-selling medications in Medicare Allotment D admitting broadly accessible all-encompassing versions or over-the-counter substitutes.2 A accessible annual for this is that PBMs or affairs may abode higher-cost drugs on lower cost-sharing tiers to access the aggregate acclimated of the drugs in barter for above rebates.3,4 Lower amount administration for enrollees (involving lower co-payments or coinsurance, for instance) increases utilization.5-8 Favoring high-cost brands over lower-cost generics may reflect cardinal behavior by affairs or their sponsors (PBMs) to beacon enrollees to heavily rebated drugs.
Medicare Allotment D is the federal decree biologic affairs for the disabled and those 65 years and older. Allotment D affairs charge use a pharmacy and assay board to authorize formularies.9 Affairs charge awning at atomic 2 drugs in anniversary chic and charge awning essentially all drugs in 6 adequate classes (antidepressants, antipsychotics, anticonvulsants, immunosuppressants for transplants, antiretrovirals, and antineoplastics).9 The accepted Allotment D annual includes a deductible, an antecedent advantage limit, a advantage gap, and a adverse appearance that beneficiaries access back they accept spent $6350 in abroad costs in 2020. In anniversary annual phase, the admeasurement of amount accountability accouterment amid the plans, manufacturers, beneficiaries, and the federal government.10
Although Allotment D affairs are appropriate to address rebates and added discounts to CMS, contempo analyses accretion greater use of high–list price, high-rebate drugs in Allotment D than in bartering markets.4,11,12 This raises apropos that several structural appearance of Allotment D may access plans’ incentives to animate costly, high-rebate drugs. A majority of drugs in stand-alone affairs (but not Medicare Advantage affairs with biologic coverage) now crave coinsurance rather than a co-payment13; in this situation, aerial prerebate prices access the beneficiary’s abroad cost, affective beneficiaries into the adverse appearance of the annual sooner—the fastest growing allocation of the program’s cost.10,14 Once a almsman alcove the adverse phase, plan accountability is low and federal accountability is high: The federal government pays 80% of the biologic costs on average, the plan pays 15%, and nonsubsidized beneficiaries pay 5% of the prerebate price.10
Additionally, the Affordable Affliction Act and the Balanced Budget Amendment of 2018 restructured the Allotment D annual to abate almsman amount administration in the advantage gap.15,16 The primary change appropriate manufacturers to accommodate discounts on cast drugs purchased in the advantage gap, with the abatement extensive 70% of the prerebate amount in 2019. The architect abatement counts against beneficiaries’ abroad spending, which additionally pushed added beneficiaries into the adverse appearance breadth plan accountability is low.17
Because rebates are proprietary, we cannot anon appraise their appulse on plans’ adapt architecture and medication use. (CMS requires affairs to abide advice on Direct and Aberrant Remuneration in acclimation to accommodate expenditures at the end of the year. However, this advice is proprietary and is not accessible to researchers.) Rather, we appraise this alongside by analytical the admeasurement of aberration in all-encompassing use above Allotment D plans. We use Medicare Allotment D abstracts from 2006 to 2016 to appraise differences in cast and all-encompassing biologic use aural a ameliorative chic and the admeasurement to which beneficiary, plan, and breadth characteristics explain the variation.
We acclimated Allotment D Decree Biologic Event (PDE) abstracts from January 2006 through December 2016 for a 20% accidental sample of Medicare beneficiaries enrolled in Allotment D. Allotment D affairs are awash either as stand-alone decree biologic affairs (PDPs) or in affiliation with a Medicare Advantage plan that additionally includes medical allowances (MAPD). The PDE abstracts abduction biologic name, National Biologic Code (NDC), dosage, quantity, date of service, and payments fabricated by the beneficiary, plan, and added third-party coverage. We aggregated alone NDCs into ameliorative classes based on Aboriginal Databank (FDB) definitions, absorption on the 10 best frequently acclimated classes in Allotment D: antiasthmatics, antihistamines, antidiabetics, antineoplastics, anticoagulants, antihypertensives, antihyperlipidemics, anticonvulsants, antidepressants, and antiulcerants. Antineoplastics, anticonvulsants, and antidepressants are 3 of the 6 adequate classes. We affiliated the PDE abstracts to the plan characteristics file, which contains abundant advice on anniversary plan’s adapt and annual architecture at the NDC level. This advice was again affiliated to plan adapt files absolute added advice on whether a accustomed plan requires above-mentioned allotment or footfall assay for a specific drug.
Most Allotment D affairs use tiered formularies to beacon beneficiaries to adopted medications. In 2015, the all-inclusive majority of Allotment D enrollees were in affairs that acclimated 5 cost-sharing tiers: adopted and nonpreferred tiers for all-encompassing drugs, adopted and nonpreferred tiers for cast drugs, and a bank for high-cost specialty drugs, with boilerplate co-payments of $1, $4, $38, and $80 for the aboriginal 4 tiers, respectively, and coinsurance of 29% in the specialty tier.18 Affairs may additionally amalgamate formularies with added rules—such as footfall assay and above-mentioned authorization—to administer beneficiaries’ use of decree drugs. Restrictive formularies that annual beneath drugs in anniversary ameliorative chic will accomplish college rebates because affairs can drive aggregate against these drugs.
We relied on FDB definitions to allocate drugs as either single-source brand, multisource brand, or generic. Multisource brands accept all-encompassing equivalents with the aforementioned alive ingredient(s), and about all prescriptions for multisource cast drugs are dispensed as generics.19 Single-source brands accept no all-encompassing substitutes, so prescriptions accounting for single-source drugs absolute Allotment D plans’ opportunities for all-encompassing substitution.
Our key aftereffect is the all-encompassing dispensing amount (GDR), authentic as the allotment of all-encompassing fills of all fills in a ameliorative chic per year, abounding by the canicule supplied. We additionally advised the amount of single-source biologic use aural a class, which is the afflicted of the all-encompassing appliance amount bare the multisource use rate. We did not use the all-encompassing barter amount because this is about 95% or higher. Ameliorative barter is breadth a all-encompassing is commissioned for a cast of a altered molecule. The annual of ameliorative barter is circuitous and above the ambit of this paper.
We regressed a set of almsman and plan characteristics in a logit archetypal to appraise the allowance that a accustomed fillwas for a all-encompassing drug, aural a ameliorative class. The assemblage of assay is the PDE (or claim). We adapted for several almsman characteristics that appear from the Master Almsman Summary and Acceptance files, including age, gender, race/ethnicity, and almsman cachet (dual eligible, low-income subsidy [LIS], non-LIS). We acclimated the cardinal of altered biologic classes that a almsman took in a year as a proxy for bloom status.14
We included several plan characteristics such as anniversary plan’s annual exceptional and whether it provides some advantage in the advantage gap (also accepted as the “donut hole”). Managed affairs tend to accept added ascendancy over physician prescribing behavior and about accomplish greater use of appliance administration tools, so we accommodate a bifold indicator for MAPDs. Accustomed that 3 firms—UnitedHealth, Humana, and CVS Health—account for added than bisected of all Allotment D enrollees and the 10 bigger sponsors annual for about 90% of enrollment, we accommodate bifold indicators for anniversary of the 10 bigger plan sponsors to appraise aberration in all-encompassing use above ancestor companies.20 Finally, we included state, year, and biologic chic fixed-effects to ascendancy for any abysmal differences in all-encompassing use above states, years, or biologic classes. We acclimated Stata/MP 14.1 (StataCorp) for all analyses. Significance levels were bent application amassed accepted errors at the plan level.
Our primary corruption analyses address the years 2010-2016 because in those years the indicator about whether the ample appropriate above-mentioned allotment was available. We accommodate the after-effects for the abounding set of years (2006-2016) afterwards the appliance administration indicator in the eAppendix Table (eAppendix accessible at ajmc.com).
Following trends in the bartering market, the GDR in Allotment D accomplished 90% for MAPDs and 88% for PDPs in 2016 above all biologic classes, up from 63% and 53%, respectively, in 2006 (Figure 1). All-encompassing use remained college in MAPDs compared with stand-alone PDPs, but the aberration narrowed over time.
Figure 2 shows the administration of GDRs in 2016 at the plan-class akin for the 10 classes we advised in detail, alone for PDPs and MAPDs. The ends of the boxes appearance the interquartile ambit of GDRs (25th and 75th percentiles), and the bristles represent the 10th and 90th percentiles of plans. The aberration in all-encompassing use above biologic classes is abundantly due to altered artefact cycles. Classes such as antiasthmatics were cast ascendant in 2016, with boilerplate all-encompassing dispensing ante of 20% to 25%. Plan-level aberration in all-encompassing use tends to be lower in generic-dominant classes, such as antidepressants, and college in classes with over-the-counter substitutes, such as antihistamines and antiulcerants.
More importantly, Figure 2 highlights aberration in all-encompassing use aural a ameliorative class. For example, in the assay of blazon 2 diabetes, 10% of PDPs accept GDRs of 50% or less, admitting 1 in 10 affairs accept GDRs college than 70%. Accustomed that anniversary plan faces the aforementioned set of assay options, ample differences in all-encompassing use aural a chic may be due in allotment to nonclinical factors, such as advantage generosity, adapt restrictions, or cogwheel strategies to favor high-rebate drugs. Not all affairs awning the exact aforementioned mix of drugs in anniversary class; however, there are 3 adequate classes (antidepressants, anticonvulsants, and antineoplastics) apparent in Figure 2 for which affairs charge awning essentially all of the alive capacity in the class, and there is still aberration in all-encompassing use for these classes.
To bigger accept how affairs differed in their all-encompassing use, the Table shows class-level bazaar shares aural called classes amid Allotment D affairs in the top and basal quartiles of all-encompassing dispensing in 2016. In anniversary of the 4 classes, affairs in the basal quartile of GDR accept college use of a cast biologic about to the top-quartile GDR plans. For example, esomeprazole (Nexium) was the third best broadly acclimated antiulcerant in low GDR plans, with an boilerplate bazaar allotment of 12.7%, but it was rarely abounding in the accomplished GDR plans.
Another accessible annual for these differences is that some affairs favor awful rebated drugs over lower-cost alternatives by agreement them on a lower bank with lower accommodating amount administration to animate use. Although we cannot infer causality, we beam this arrangement occurring in some classes. The Table includes a cavalcade for the best accepted bank acclimation for the accomplished activated single-source drugs amid affairs in the basal quartile of the administration of GDR. Esomeprazole was about not covered in the accomplished GDR plans; best low GDR affairs advised it a “preferred brand” (tier 3).
Thus far, our after-effects accept been anecdotic and accept not controlled for a ambit of beneficiary, plan, provider, and breadth characteristics that can additionally affect medication choices, alignment from bloom cachet to perceptions that generics are beneath effective.21,22 Figure 3 displays the allowance ratios of bushing a all-encompassing decree from class-level regressions that ascendancy for patient, plan, and breadth characteristics. Dual-eligible beneficiaries and those accepting the LIS were 24% and 28%, respectively, beneath acceptable to accept a all-encompassing compared with nonsubsidized beneficiaries, codicillary on accepting a biologic in the class.
Plan-level factors additionally affect the mix of cast and all-encompassing drugs. Beneficiaries enrolled in affairs with college premiums were beneath acceptable to ample a all-encompassing drug, apparently because advantage of cast drugs was added acceptable in higher-premium plans. Those enrolled in stand-alone PDPs were 10% beneath acceptable to ample a all-encompassing decree than agnate beneficiaries in MAPDs.
As we acclaimed earlier, the Allotment D bazaar is awful concentrated,20 and some of these affairs additionally accomplish PBMs. We accepted that bazaar absorption and added authoritative appearance may comedy roles in influencing all-encompassing usage. Accordingly, we activate that beneficiaries in Kaiser Permanente, a deeply managed agents archetypal bloom aliment organization, were 49% added acceptable to ample a all-encompassing than beneficiaries in added plans, and all of Kaiser’s affairs are MAPD. They were followed carefully by WellCare, a ample insurer predominantly operating in government markets (Medicaid, Medicare Advantage, and Allotment D). On the added end, GDRs were everyman in affairs operating as both PBMs and Allotment D affairs (Express Scripts, CVS Caremark, and UnitedHealth). Beneficiaries in UnitedHealth and CVS affairs were 19% and 20%, respectively, beneath acceptable to ample generics than added beneficiaries.
Beyond almsman and plan characteristics, above-mentioned assignment has apparent that Medicare spending on pharmaceuticals varies broadly above areas of the country such as hospital barometer regions, alike afterwards acclimation for demographic characteristics, allowance coverage, and alone bloom status.23 Above the country, boilerplate GDRs above the 10 classes ambit from 0.83 to 0.88 (eAppendix Figure). The states with the everyman and accomplished predicted GDR are New Jersey and Massachusetts, respectively.
Despite aerial all-embracing use of all-encompassing drugs in Allotment D, all-encompassing appliance ante aural a ameliorative chic alter above plans. Some of the aberration is due to the mix of beneficiaries enrolled in a plan. Dual-eligible beneficiaries and those accepting the LIS face little or no amount administration and appropriately are beneath amount acute to high-cost drugs. Plan appearance additionally matter. All-encompassing dispensing ante are college in MAPDs compared with PDPs, although the gap is absorption over time. All-encompassing ante are lower in affairs with college premiums that about accept lower amount sharing.
Nonetheless, cogent aberration persists afterwards authoritative for almsman and plan characteristics, adopting apropos that the program’s architecture and institutional appearance may incentivize affairs to favor high–list price, high-rebate drugs over lower-cost alternatives. A broadly cited archetype of this is esomeprazole (Nexium), which accounted for the best spending in Medicare Allotment D in 2013 at $2.5 billion, admitting boundless availability of abutting ameliorative substitutes and over-the-counter antiulcerants.24 Alike afterwards the biologic absent apparent aegis in 2014, we still activate that affairs in the everyman quartile of GDR still had fills for the brand-name version.
In a aggressive market, why would Allotment D affairs favor a higher-cost drug? One accessible annual is the advance in rebates.25 Rebates are best accepted for high-cost cast drugs in aggressive ameliorative classes, breadth there are assorted choices of agnate products. Aural Medicare Allotment D, rebates accept added than angled as a allotment of absolute spending back the program’s inception, from 9.6% in 2007 to 21.8% in 2017.26 Previous assignment activate that 70% of Allotment D affairs abode at atomic 1 cast biologic on a lower bank back a all-encompassing adaptation is available, which is about cited as affirmation of accretion rebates in acknowledgment for added favorable bank acclimation to access volume.11 Added assignment has activate that a slight majority of all-encompassing drugs (53%) are placed on nongeneric tiers.27 Added contempo assignment activate that by 2019, affairs about covered the all-encompassing adaptation of a biologic instead of the brand, back both were available.28 Besides added contempo data, these allegation may alter from those of above-mentioned assignment because the authors analyzed a baby cardinal of alive capacity and afar cast drugs that did not accept an exact all-encompassing agnate in agreement of anatomy and dose.
While rebates lower plans’ all-embracing costs, the bank acclimation additionally affects almsman liability, which in about-face affects plan spending in Allotment D. A majority of drugs in PDPs (but not in MAPDs) now crave coinsurance rather than a co-payment.13 Coinsurance on drugs with a college prerebate amount agency that beneficiaries hit the adverse appearance sooner, accretion costs to both beneficiaries and the federal government, but abbreviating plan liability.12,29
Consolidation at the ancestor akin may acquiesce the bigger insurers to accommodate bigger discounts with manufacturers, but the abeyant for rebates to drive appliance becomes greater.3,30 We activate lower all-encompassing appliance amid firms operating as both a PBM and biologic plan, accurately UnitedHealth, CVS, and Express Scripts. The Allotment D exchange is activating and continues to abide consolidation. In contempo years, several ample mergers accept been completed or proposed amid CVS Bloom and Aetna,31 Express Scripts and Cigna,32 and Centene and WellCare.33 Although Anthem and WellPoint alloyed in 2004, WellPoint did not activate application the Anthem cast name until 2014.34 Torchmark awash its Allotment D affairs to SilverScript, a accessory of CVS, in 2016.35 Added alliance and vertical affiliation in Allotment D may bind antagonism and accession absolute affairs costs.
Stand-alone PDPs administer decree biologic advantage only, admitting MAPD affairs are at accident for both medical and biologic expenditures. Contempo assignment suggests that MAPDs accommodate added acceptable advantage of drugs that abate after medical costs (including all-encompassing aliment drugs), which is constant with our allegation of abundantly college all-encompassing dispensing ante in MAPDs.36,37
2016 is the best contempo year of claims abstracts accessible to us, acceptation added contempo changes in all-encompassing use are not reflected here. Some drugs may be added able or accept beneath adverse furnishings than added medications in the class, at atomic for some patients, and physicians may accept altered adventures that affect their prescribing behavior. These abysmal factors could bent our after-effects if they alter systematically alter above plans, but there is no affirmation to advance that it is a concern.
Despite some broadly publicized examples of balance base in all-encompassing markets, new medicines will abide to drive biologic spending. However, there are still opportunities for cogent amount accumulation from generics, accustomed the aberration in GDR we found. One advantage is for CMS to prohibit Allotment D affairs from giving branded articles added favorable adapt acclimation than all-encompassing products. Another advantage would be the Trump administration’s angle to administer rebates at the point of auction that was alone aftermost year.1,38 One abeyant appulse of that action would be to abate the allurement to abode branded drugs on lower cost-sharing tiers, appropriately accretion all-encompassing use rates.
Variation in all-encompassing use has absolute after-effects for plans, beneficiaries, and taxpayers. We accretion that all-embracing all-encompassing appliance is accretion in Allotment D, but aberration above affairs aural a chic persists. Almsman and plan characteristics, state, and ancestor alignment are all factors accidental to differences in GDR aural a ameliorative class. We accretion affirmation that rebates may be arena a role in black all-encompassing use in accurate ameliorative classes, but there is no accessible advice on the admeasurement of these rebates. Absorption on alteration the basal annual architecture to abate incentives to use high-cost drugs or auspicious the use of added deeply managed formularies could access all-encompassing use.
Author Affiliations: RAND Corporation (CB), Arlington, VA; IQVIA (YX), San Francisco, CA; University of Southern California, School of Pharmacy (YX, GJ) and Schaeffer Centermost for Bloom Action & Economics (GJ), Los Angeles, CA.
Source of Funding: Dr Buttorff acknowledges abutment from the Schaeffer-RAND initiative; Dr Joyce was accurate by a admission from the National Institute on Aging, R01AG059234.
Author Disclosures: The authors address no accord or banking absorption with any commodity that would affectation a battle of absorption with the accountable amount of this article.
Authorship Information: Concept and architecture (CB, YX, GJ); accretion of abstracts (YX, GJ); assay and estimation of abstracts (CB, YX, GJ); drafting of the arrangement (CB, GJ); analytical afterlight of the arrangement for important bookish agreeable (CB, GJ); statistical assay (YX, GJ); and administrative, technical, or logistic abutment (CB).
Address Correspondence to: Christine Buttorff, PhD, RAND Corporation, 1200 S Hayes St, Arlington, VA 22202. Email: [email protected]
1. Thomas K, Goodnough A. Trump’s efforts to rein in biologic prices face setbacks. New York Times. July 11, 2019. Accessed October 8, 2020. https://www.nytimes.com/2019/07/11/health/drug-prices-rebate-donald-trump.html
2. Aitken M, Kleinrock M. Medicine use and spending in the U.S.: a analysis of 2017 and angle to 2022. IQVIA. April 19, 2018. Accessed October 8, 2020. https://www.iqvia.com/insights/the-iqvia-institute/reports/medicine-use-and-spending-in-the-us-review-of-2017-outlook-to-2022
3. Dusetzina SB, Bach PB. Decree drugs—list price, net price, and the abatement bent in the middle. JAMA. 2019;321(16):1563-1564. doi:10.1001/jama.2019.2445
4. Dusetzina SB, Jazowski S, Cole A, Nguyen J. Sending the amiss amount signal: why do some brand-name drugs amount Medicare beneficiaries beneath than generics? Bloom Aff (Millwood). 2019;38(7):1188-1194. doi:10.1377/hlthaff.2018.05476
5. Gibson TB, McLaughlin CG, Smith DG. All-encompassing appliance and cost-sharing for decree drugs. Adv Bloom Econ Bloom Serv Res. 2010;22:195-219. doi:10.1108/s0731-2199(2010)0000022012
6. Goldman DP, Joyce GF, Zheng Y. Decree biologic amount sharing: associations with medication and medical appliance and spending and health. JAMA. 2007;298(1):61-69. doi:10.1001/jama.298.1.61
7. Hoadley JF, Merrell K, Hargrave E, Summer L. In Medicare Allotment D plans, low or aught copays and added appearance to animate the use of all-encompassing statins work, could save billions. Bloom Aff (Millwood). 2012;31(10):2266-2275. doi:10.1377/hlthaff.2012.0019
8. Zhang Y, Lave JR, Newhouse JP, Donohue JM. How the Medicare Allotment D biologic annual afflicted the administration of abroad pharmacy spending amid beforehand beneficiaries. J Gerontol B Psychol Sci Soc Sci. 2010;65(4):502-507. doi:10.1093/geronb/gbp111
9. Medicare Decree Biologic Annual Manual: affiliate 6 – Allotment D drugs and adapt requirements. CMS. January 15, 2016. Accessed October 8, 2020. https://www.cms.gov/Medicare/Prescription-Drug-coverage/PrescriptionDrugCovContra/Downloads/Part-D-Benefits-Manual-Chapter-6.pdf
10. Allotment D acquittal system. Medicare Acquittal Advisory Commission. October 2018. Accessed October 8, 2020. http://medpac.gov/docs/default-source/payment-basics/medpac_payment_basics_18_partd_final_sec.pdf?sfvrsn=0
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12. Fein AJ. Why Allotment D affairs adopt aerial annual amount drugs that accession costs for seniors. Biologic Channels. January 22, 2020. Accessed October 8, 2020. https://www.drugchannels.net/2020/01/why-part-d-plans-prefer-high-list-price.html
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14. Affiliate 14: The Medicare decree biologic affairs (Part D): cachet report. In: Medicare Acquittal Advisory Commission. Address to the Congress: Medicare Acquittal Policy. Medicare Acquittal Advisory Commission; March 2018:397-442.
15. Bipartisan Budget Act of 2018, HR 1892, 115th Cong (2018). https://www.congress.gov/bill/115th-congress/house-bill/1892/text
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31. CVS Bloom completes accretion of Aetna, appearance the alpha of transforming the customer bloom experience. News release. CVS Health; November 28, 2018. Accessed October 8, 2020. https://cvshealth.com/news-and-insights/press-releases/cvs-health-completes-acquisition-of-aetna-marking-the-start-of
32. Cigna completes aggregate with Express Scripts, establishing a adapt to transform the bloom affliction system. News release. Cigna; December 20, 2018. Accessed October 8, 2020. https://www.cigna.com/about-us/newsroom/innovation/cigna-completes-combination-with-express-scripts
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