The Medagate Corp., a provider of healthcare benefit services, is partnering with pre-paid card and transaction processing company InComm to launch the OTCNetwork, a national over-the-counter benefits disbursement and redemption network for Medicare Advantage plan members.
Medicare Advantage members whose health plans are part of the network will receive pre-paid debit cards aimed at making it easier for seniors to take advantage of this underutilized insurance benefit.
According to Devin Wade, president and founder of Medgate, the reloadable, pre-paid card program is a combination of two existing models for debit cards.
"On the open loop side you have Visa and Mastercard that are accepted everywhere but you cannot do restrictions," said Wade. "Then there are closed-loop programs, where you have a Walgreens card but you can only use it at Walgreens. We saw an opportunity in the middle where we could have wide acceptance but also restrict what can be purchased to OTC items."
For the roll-out, the OTCNetwork announced the participation of two New York-based health plans, Health Plus Elite and Access Medicare, as well as pharmacy partners Duane Reade and RiteAide. Other retailers slated for an expanded rollout in 2011 include CVS, Family Dollar, HEB, Winn Dixie, SaveMart and Bashas.
The goal of the OTCNetwork, which is available at more than 20,000 locations nationwide, is to have its cards accepted at retail locations that sell over-the-counter medications, allowing Medicare plan members options in choosing a pharmacy or retailer. InComm, which focuses on stored value gift cards and prepaid cards using point-of-sale technology, has a presence in more than 220,000 retail locations and processes transactions in excess of $15 billion annually.
"Our retailers recognize the future of healthcare will include a heavy dose of self care in an effort to improve general health and reduce costs," said Mark Leonard, executive vice president of InComm. "For the first time, Medicare Advantage plan members will be able to use their benefits for self-care via OTC items when they need them."
Access Medicare officials said prepaid cards that restrict spending to eligible over-the-counter items are an attractive benefit.
"This reduces burdensome extra work that members would need in order to take advantage of this benefit," said Ramon Rodriguez, CEO of Access Medicare, which serves the Bronx, Queens and Manhattan. "Normally our members would need to use either a catalog or get a prescription from the doctor to get their over-the-counter medications covered. This reduces the extra work and makes it much easier to get the medications they need."
According to Wade, only 4 percent of the $5.5 billion dollars of OTC benefits available annually in Medicare Advantage plans is used each year.
For Rodriguez, the benefit goes beyond dollars and cents. "This encourages self-care among members," he said. "Anything that permits a member to help coordinated their own care is a positive."