Often overlooked in the on-going battle to control workers compensation cost is the cost of prescriptions. Pharmacy Benefits Managers (PBM) offer the self-insured employer, insurer or third party administrator a way to manage and control the cost of drugs. While PBM provide a cost savings by obtaining a discount on the cost of drugs, the good PBM goes a lot further.
The PBM that will provide the best results is the one that keeps track of not only the cost savings provided, but also the utilization of prescriptions, especially narcotics. The better PBMs will alert the medical provider and adjuster when there is over-utilization of drugs. (WCxKit)
The PBM you select should have a national network covering most of the 70,000+ drug stores in the United States. The PBM should have a working relationship with the three major drug store chains which include CVS, Walgreens and Rite-Aid, as well as the local independent drug stores.
The effectiveness of the PBM can be judged by three different criteria which are the rate of use by the employees, the ease of use for the adjuster, and their technology interface ability.
The penetration rate is a measure of how extensively the employees use the pharmacy program. The PBM will often mail the employee a pharmacy benefit card with a cover letter on the pharmacy benefit card use. Most employees will opt to use the PBM card rather than out of pocket and then having to seek reimbursement. The adjuster should have the ability to suspend the use of pharmacy benefit card when the claim is denied or concluded.
The PBM should coordinate the prescription with the employee, the pharmacy and the medical provider without involvement of the adjuster. The easier the process is to use, the less the involvement of the adjuster. The better PBM will make the process totally seamless resulting in no involvement for the adjuster, while the adjuster can be assured the cost of the prescriptions and the utilization of the prescriptions is being properly controlled.
The PBM should provide the user of the service with the ability to review on-line all transactions and to obtain all necessary management reports. The technology interface should allow you to quickly know and understand the prescription drug usage of any employee. This will allow you to identify both the high cost employees and the doctors who prescribe the medications.
There are numerous ways the PBM can control cost. Some of the techniques used by PBMs include: (WCxKit)
-The use of generic drugs wherever substitution for patent drugs is permitted.
-A comprehensive, standard formulary specific to workers compensation injuries.
-A pre-negotiated price for each drug in the formulary.
-The ability to provide home delivery for employees who are unable to pick-up the prescribed drugs.
-Mail order services for maintenance drugs.
-The ability to approve or deny the “off-label” use of a drug.
-The ability to prevent consumption of drugs faster than manufacturer recommendations.
-The prevention of multiple, overlapping prescriptions from multiple doctors.
-The prevention of multiple pharmacies filling the same prescription.
-The prevention of filling non-injury related prescriptions.
The use of a PBM is a great way to reduce the cost of prescriptions and to lower their cost impact on your workers compensation program. To learn more about PBMs and how you can utilize their services to reduce your workers compensation cost, read the chapter on Implementing a Pharmacy Benefits Management Program in our new 2012 edition of Manage Your Workers Compensation Program, Reduce Costs 20-50%. To obtain your copy, please contact us.
Author Rebecca Shafer, JD, President of Amaxx Risk Solutions, Inc. is a national expert in the field of workers compensation. She is a writer, speaker, and website publisher. Her expertise is working with employers to reduce workers compensation costs, and her clients include airlines, healthcare, printing/publishing, pharmaceuticals, retail, hospitality, and manufacturing. She is the author of the #1 selling book on cost containment, Manage Your Workers Compensation: Reduce Costs 20-50% www.WCManual.com. Contact: RShafer@ReduceYourWorkersComp.com.
Our WORKERS COMP BOOK: www.WCManual.com
WORK COMP CALCULATOR: www.LowerWC.com/calculator.php
MODIFIED DUTY CALCULATOR: www.LowerWC.com/transitional-duty-cost-calculator.php
SUBSCRIBE: Workers Comp Resource Center Newsletter
Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers comp issues.
©2011 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact