Worker’s Compensation: Focus Moving to Prescription Optimization

As a pharmacy (retail or mail and to a lesser degree specialty) or as a PBM or pharmacy administrator, one of the best ways for you to save clients money (lower average ingredient costs), save patients money (lower copays), and drive margins is typically to manage the distribution channel, drug utilization, and drug selection. There are traditional ways of doing this – formulary / preferred drug list, copays, and coverage rules (e.g., step therapy). But, more and more, companies are looking for softer solutions that focus on patient education.

How do you get patients to understand the value of generics and request that from their physician? How do you get patients to understand when mail order or specialty pharmacy is appropriate? How do you recruit them and work with their prescribing physicians? [hint: aligned incentives, proactive education and messaging, data management, patient segmentation models, online tools, and multi-modal coordination]

Worker’s compensation is typically its own animal. Patients pay no copays. Patients don’t really have eligibility cards. In some states, you can direct care (i.e., you have to go to these pharmacies). And, you have a whole industry of companies called third party billers (TPB) that buy the prescriptions from the retailers based on a factor for the receivables and then try to find the carrier or employer who covers that claimant and charge them more then the TPB paid. It solves the problem for the retail pharmacy of knowing who to bill for the claim (since there is no eligibility card…at least on the first fill).

Typically, this business is separate from the traditional MCOs and PBMs and done by companies like PMSI, Cypress Care, and MSC while some companies have a small group focused on it (e.g., Express Scripts). On the 3rd, there was an article titled “Workers comp PBMs can help employers control drug costs”. The article talks about the need to get an identification card to the patient (aka injured worker…aka claimant) as soon as possible so that their future claims process under the negotiated discount rate.

“If you have discounts, and your plan members aren’t going to network pharmacies, it doesn’t do any good.” (Vicki Wheeler, Express Scripts)

Several industry experts chime in to point out that it’s not about the billed rate per claim but about the utilization management. (Joe Paduda, a blogger on the topic, was also quoted in the article.)

“PBMs that intervene early in the prescription drug management process also can encourage the use of generics or less-expensive brand medications whenever they are available.” (Nick Page, PMSI)

Obviously, the holy grain is getting the patient better and back to work so understanding compliance and the link between appropriate drug utilization and overall medical spend for the patient is critical path. But, it appears from the story that the WC business will follow the route of the commercial PBMs and begin looking more aggressively at how to change behavior when you have no plan design (i.e., no copays). Couponing may be the option, but who pays?

(Another blog on WC that I just discovered is called Workers Comp Insider.)

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