Pharmacy Costs and Work Comp
A September 2016 NCCI research brief states “for every $100 paid for medical services provided to workers injured…$17 will be paid for prescription drugs.” They continue to state…”the prescription drugs portion of medical costs increases rapidly as claims age. For every $100 of medical services paid on claims older than 10 years, approximately $45 to $50 will be for prescription drugs.”
Non-Therapeutic Pharmacy Changes
The rapid increase in the prescription drug portion of medical costs in aging claims makes review of the pharmacy treatment plan compounded in importance when creating a Medicare Set-Aside for future medical costs.
Non-therapeutic pharmacy changes include:
- Switching treatment from a brand name drug to generic.
- Confirming discontinuation of a prescribed drug when the medical records are ambiguous
- Requesting that the physician consider moving from a prescribed drug to over-the-counter.
Medicare Set-asides: Case Study – $774,583 Savings
Step 1: MSA Triage
- Injury:
- Struck by Lighting: Electric shock, difficulty sleeping, pain, depression, seizure activity
- Prescription & Treatment Plan
- hydrocodone/apap, baclofen, Topamax, duloxetine, Keppra, naproxen, and clonazapem, sleep apnea equipment
- Original Projected MSA Cost
- $1,416,513 with brand new drugs and sleep apnea equipment
Step 2: Identify & Execute Intervention Strategy
- Original Projected MSA Cost
- $1,416,513 with brand new drugs and sleep apnea equipment
- Non-Therapeutic Physician Follow Up Strategy
- Identified opportunity to switch to generic, facilitated communication with physician, employee, and attorney to execute switch
- Savings Realized
- Future medical reduced from $1.4m to $641,930 by substituting generic; accepted by CMS and saved $774,583.*
*case study provided by Tower MSA Partners
The main driver in this MSA allocation was the cost of the brand name prescription drugs Topamax and Keppra. In the above example, the MSA provider identified the opportunity for savings, facilitated the successful switch to generic drugs among all stakeholders and obtained the written evidence of the change in treatment necessary to secure CMS approval. The result was a $774,583 MSA savings that was accepted by CMS. It is important to note that communication and coordination among all parties allowed the switch to occur and the savings to be realized.
Review Non-Therapeutic Pharmacy Changes – Fees
The opportunity to realize dramatic savings without altering the clinical outcome for the patient warrants that non-therapeutic physician changes should be reviewed as a standard part of every MSA case file.
When evaluating your MSA vendor, ask the question if this service is included in the standard fee, or if it’s an additional charge? A vendor that provides the service at an additional charge will not utilize it as often and will realize significantly less savings than one in which it’s included in the standard fee.
Conclusions
Medical treatment and prescription drugs will continue to be a driver in the cost of all workers’ compensation claims. Alterations in prescriptions via non-therapeutic pharmacy changes can mean savings for the parties, as well as other benefits in workers’ compensation claims. Opportunities for these changes should be reviewed on every MSA case file.
For additional information on workers’ compensation cost containment best practices, register as a guest for our next live stream training.
Contact: mstack@reduceyourworkerscomp.com.
Workers’ Comp Roundup Blog: https://blog.reduceyourworkerscomp.com/
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