A major mistake made by many self-insured employers and also occasionally by insurers and third party administrators is the failure to use a pharmacy benefit manager (PBM) to control the cost of prescription medication. With employers paying for over $5 billion in prescription medication cost each year, and with the cost of prescriptions steadily increasing, more and more employers are waking up to the benefits of a PBM.
Originally PBMs were simply a way to get a discount on the price of drugs. Over time the better PBMs have expanded to provide a wide range of prescription management services. We recommend any PBM you consider to be able to provide the following services (benefits to the employer):
Utilization Management
• Identification and use of generic drugs whenever possible
• Identification of newer drugs that provide greater medical benefit and submission of the appropriate request to the medical provider
• Prevention of narcotic consumption at a rate greater than prescribed by the medical provider
• Prevention of narcotic consumption at a rate greater than recommended by the manufacturer
• Prevention of multi-physician dispensing of the same drug
• Prevention of multi-physician dispensing of duplicate use drugs
• Prevention of multi-pharmacy filling duplicates of the same prescription
• Accreditation by the Utilization Review Accreditation Committee
Service
• Efficient coordination of the medical prescriptions between the medical provider, pharmacy and employee
• Constantly up to date on any medication advisories or medication recalls or medical product recalls
• Technology to process the prescription in real time when the employee is at the pharmacy with the appropriate pricing
• Technology for the injured employee and the adjuster to review all prescriptions dispensed to the employee
• Technology for the injured employee to communicate with the PBM electronically including the employee having their own on-line account with the PBM
• Technology to process all billing electronically eliminating the manual processing of individual prescription payments
• Ability to provide the injured employee with a pharmacy benefits card restricted to work-related injury medications
• Technology to provide reports on cost savings, utilization and trends
• Ability to provide home delivery (at no additional cost) on maintenance prescriptions via the U.S. Postal Service, UPS and/or Federal Express
• A 24/7 customer service contact number for employees, pharmacies or medical provider when any issue occurs
• Compliance with all workers’ compensation rules and regulations of each jurisdiction
Price Management
• A comprehensive formulary that can be customized to manage utilization
o Injury code specific
o Patient specific
• A pre-negotiated price discount for each drug in the formulary
• A national network covering most of the pharmacies, including the three major pharmacy chains of Rite-Aid, Walgreens and CVS
• Technology to recognize and stop the prescriptions for non-compensable medication requested by the medical provider (example: the treating physician requesting a medication that is for treatment of an illness and the medication has no injury related use)
• Technology to re-price any prescription medications dispensed by the medical provider
The best PBMs lower the cost of prescription medications while providing seamless service to the employer, employee, medical provider and adjuster. When an employer, insurer or third party administrator is shopping for a PBM, a national presence and strong utilization controls should be incorporated into the selection.
Author Michael B. Stack, CPA, Principal, Amaxx Risk Solutions, Inc. is an expert in employer communication systems and part of the Amaxx team helping companies reduce their workers compensation costs by 20% to 50%. He is a writer, speaker, and website publisher. www.reduceyourworkerscomp.com. Contact: mstack@reduceyourworkerscomp.com.
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