Kootenai County directs staff to budget Payor Matrix pharmacy program to reduce FY26 health costs

Kootenai County commissioners on July 9 directed staff to incorporate projected savings from a Payor Matrix pharmacy "bolt-on" program into the county's FY26 health insurance budget and asked human resources to prepare premium-adjustment scenarios for the next budget meeting.

Alliant consultant David Smith told the Board that specialty pharmacy costs have risen sharply across the county's plan and that Payor Matrix could reduce the county's pharmacy spend by sourcing expensive medications outside the existing Prime Therapeutics/Regence contract through patient-assistance programs, manufacturer "bridge" programs, international sourcing and biosimilars. "A lot of these drugs are game changers and they're really really helping people. They're also very very expensive," Smith said during the presentation.

The recommendation came during a single-agenda meeting on Alliant's FY26 health insurance options. Smith and other Alliant representatives outlined how Payor Matrix would exclude a small list of very high-cost drugs from the county's current PBM contract and attempt to secure the same drugs at lower cost through alternate channels. If a member qualifies for a patient-assistance program (PAP), Alliant said that drug could be provided at no cost to the member and no cost to the county. For cases where PAPs are not available, Alliant described bridge programs (temporary manufacturer-provided supply), international sourcing (principally through Canada) and biosimilar substitution via a partner identified as Superior Biologics.

Alliant estimated 22 members (157 claims) could qualify for PAPs on currently listed drugs, and that including non-PAP specialty drugs would raise the affected population to roughly 30–35 members on the plan (about 1,200 covered lives). In their analysis, Alliant presented a range of potential savings: a gross example of roughly $13 million in identified opportunity with an illustrative annual plan savings figure of about $853,000 in a best-case PAP conversion scenario; Alliant senior staff later said a more conservative, net estimate after rebates and offsets would be about $450,000 annually. County HR Director Brandy Falcon said that, when netted against the higher budget figures presented that day, the county could expect roughly $100,000 of improvement on the preliminary budget summary if Payor Matrix savings materialize.

Alliant cautioned that implementing Payor Matrix would produce member outreach burdens and short-term "noise" as affected members complete paperwork or seek exceptions. Smith described the process as requiring upfront education and ongoing coordination among Payor Matrix care coordinators, members, physicians and plan administrators. He noted some therapies (for example, certain biologics) may require biosimilar substitution that not all members can tolerate; in those cases members could seek plan exceptions and revert to the original therapy.

Legal and operational risk questions were discussed. Commissioners asked whether international sourcing is lawful; Alliant said importing drugs outside U.S. channels is technically restricted but that enforcement and market practices have evolved, and the company uses multiple sourcing strategies. Alliant also said the primary legal exposure, in their view, would rest with third-party vendors rather than with single public employers. The county's plan-year timing was discussed: the plan year begins Jan. 1, 2026, giving the county roughly six months to enroll and educate members ahead of the program launch.

Aside from pharmacy, Alliant recommended three other actions: 1) keep the county's current dental arrangements (declining a proposal from Northwest Dental Benefits to replace Willamette Dental because it would reduce benefit richness and raise cost); 2) replace the current employee assistance program vendor Uprise with CuraLink to secure one additional annual visit per person and packaged hours for critical-incident response at a lower rate; and 3) continue promoting the Edison centers-of-excellence program and the on-site clinic, which Alliant reported had generated roughly $216,000 in claimed net savings from surgery avoidance and care-pathway changes.

After discussion, a commissioner said he was "ready to go Payor Matrix," and the Board authorized staff to budget the program's projected savings and directed HR to prepare calculations of equivalent employee premium increases (Alliant suggested a typical funding-share increase of 5–7.5 percent) for the next budget meeting Friday. Alliant and HR will follow up to implement outreach to affected members and to model the FY26 budget impact.

The county did not take a formal roll-call vote in the meeting transcript; the record reflects consensus direction and staff assignment rather than ordinance or resolution adoption.

Kootenai County will revisit the item at its next budget meeting, when HR will present premium scenarios and Alliant will advance implementation details for Payor Matrix if the Board confirms funding in the final FY26 budget.