5 Ways a Pharmacy Benefit Manager can Control Prescription Costs

The cost of prescribed drugs, especially narcotic pain medications, is rising in the world of workers' compensation. This cost increase is due to the fact that a drug company is like any other company: When the demand for your product is high, supply lessens, and costs have to increase. And, these medications are not exactly cheap to manufacture. In fact I saw a news report that some cancer fighting drugs are in short supply due to overwhelming demand.
Think about going to your personal physician for a knee strain you had over the weekend playing football with your family. You probably went to your doctor, and you probably left with a prescription for Motrin buddied up with a short-term prescription for a narcotic pain reliever — even if a cold pack or hot pack and rest would have taken care of the problem. This is the world in which we live. In the past, these pain medications were for extremely acute trauma, such as a car accident or bone fracture. But more and more, medications such as Vicodin, Percocet, Oxycodone, etc are being prescribed for the slightly-above-average diagnosis of lumbar or shoulder strain. (WCxKit)
Below we discuss five ways you can try to control these associated drug costs when it comes to your workers compensation claims. By no means is this an exact science, but it is certainly one you should look into for help controlling your bottom line.
1. Come up with your game plan.

Whether you have five claims a year, or five claims per week, medication cost will be a significant expense of the claim. Many carrier/TPAs are partnering with a Pharmacy Benefit Manager (PBM) to review prescription history and also to provide a reduced cost for medications. These outside vendors attract carrier/TPAs by offering them a discount cost for medications, in exchange for their guaranteed business.


Adjusters set claimants up with a drug card from these vendors, and they are widely accepted at many pharmacies nationwide. Furthermore, the PBM will review the injury and the claimant’s individual medication history. They can recommend medications based on the injury type and location. This is an attempt to stop every John Doe back pain sufferer from walking out of his doctor’s office with an RX for Percocet, when he really does not meet the criteria for needing that strong of a medication to begin with. Most strains can resolve by taking a stronger dose of Motrin, an anti-inflammatory medication similar to Advil or Ibuprofen. The PBM will also monitor duration of medication use and quantity limits. Why pay for 90 pills when John Doe should only need 30? Medication costs are associated with dosage as well, so it doesn’t make sense to pay for 90 pills unless they are needed.


2.  Start being aggressive at the first prescribed RX.

When a new claim is filed and the adjuster sets the drug card up to be mailed out to the employee, it may already be too late. This is when proper communication is handy. If you have a worse-than-average claim, you can phone your adjuster with the info, and they can get the PBM info right to the claimant.


This way they are not getting medication from an occupational clinic or hospital, where the costs are typically the highest. Right off the bat they can use the PBM card, and that reduces cost right from the beginning. This also helps manage future spending on RXs, since they already have the card and should be using it for any medication the claimant is prescribed. Sure, not using the card for your first medication fill is no big deal if you only have one or two claims per year, but if you have one or two claims per week, over the course of a year this can lead to a dramatic savings in medication cost. Every little bit of savings will help in the long run, and it is important not to overlook the small savings that you can implement right away.


3. Can you do bulk home delivery?

For those injuries lasting longer than a month, it is worth it to look into home delivery of medications. This increases the discount, because you buy more of the medication at one time, and you do not have to pay the pharmacy overhead for a short-term 30 day fill. Injured workers will appreciate having one less errand to run, especially those who do not have easy transportation readily at hand. At the same point, the PBM will monitor dosage and quantity. Why should you continue to get a medication if it is not helping? Or, if the injured worker is not taking the medication at all? These are leakage costs, and expensive ones at that. The adjuster will ultimately decide if a claim is worthy of needing home delivery, and the delivery will not last forever. If a person has a bad fracture and will need a long-term supply of Motrin, this is a perfect scenario.


Adjusters do frown on home delivery of narcotic pain meds. This gives the claimant a large supply of potentially strong medication, which carries the risk of addiction. Home delivery meds are generally milder. Again, even though these drugs may not cost the most, any sort of savings is better than no savings at all.


4. Are you using prescription utilization review?

PBM companies use a panel of clinical pharmacists to examine prescription data and injury type to make sure appropriate medication is dispensed. This helps control unnecessary costs due to prescribing incorrect medication. Also, PBM utilization review will help to control fraud by monitoring the date and location of refills. Red flags indicating abuse include early refills, a doctor shopping around to get new prescriptions, or a patient changing pharmacies to get refills. Clinical pharmacists also are useful at catching new medication trends, proper quantities of medications, and future costs/needs for ongoing medications. 
By using prospective utilization review, done before the product is used, to avoid the cost, consider prior authorization program. By having an MD on the TPA's staff review the file, many of the medication concerns are addressed proactively. The utilization review company you use, should be URAC certified to ensure quality, credentials and training. A good TPA might even have a chronic pain program to discuss pain issues with an interdisciplinary team of experts. 
5. Use a Pharmacy Benefit Manager or vendor to help with repeat offenders and duplicate prescription medications.
This use of an outside PBM is effective for many reasons, including catching a doctor prescribing both a short-term and long-term narcotic pain medication, duplicate or similar prescriptions being unnecessarily prescribed, and implementing the use of generics whenever possible. The PBM will also participate in state-wide reporting, which will catch if a claimant has other narcotic pain medication fills before the date of injury. This can show the worker may have a history of requesting certain narcotics — a red flag for abuse.
Surveillance companies usually have a service that can do a background check of pharmacies, to see if your claimant has had fills of certain medications aside from the meds needed for your specific injury. This fights fraud, and can expose someone that may have a prescription drug problem. An easy way to get strong medication is to file a comp claim, and any weapons you have to fight fraudulent claims are worth it.(WCxKit)
In summary, a third-party PBM is a useful tool not only for cost-savings but also for catching the many forms of prescription abuse out there. Doctors get lazy when it comes to prescribing medications. Sometimes the answer to every injury is a prescription of Vicodin, Percocet, or some other narcotic when none are needed. Not only are these medications expensive, but they can carry long-term health problems including addiction, which only increase the overall cost of the claim. Using a PBM is another way of being proactive when it comes to handling your claims, and your carrier/TPA will have more information on what you can do to implement a PBM program for use on all of your claims that require prescription medication.

Ask your TPA what programs they offer.

Author Rebecca Shafer
, JD, President of Amaxx Risks 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

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

Four Useful Tips Can Go a Long Way in Managing Workers Comp

When you have a high-exposure file that turns out better than you had expected and costs come in way under what you had budgeted for, it is easy to see the cost-savings that are associated with that loss. If you saved $50,000, that’s a nice lump of savings for your balance sheet. 
But those little savings you make throughout the course of a year add up as well. It’s difficult to see it in the short-run, or by the month, but looking at it over the course of a year, it can really add up to a nice savings in your budget. We discuss some ways those little savings can add up below. (WCxKit)
1-Using quality vendors to get better results:
Sometimes the better vendors just cost a bit more than others. This is usually due to the fact that they have better talent working for them, and there are associated costs included with that. However, if these more expensive vendors get your workers back to you ready for work quicker, then you save again on the wage loss issue. This means that these vendors have already paid for themselves if you weigh their costs versus the cost of wage loss for your injured worker.   Talk with your carrier about who the best vendors are in your area for IMEs, surveillance, and nurse case management. Don’t shy away from them just because their costs are a tad higher than their competition. They can save you money in the long run by providing you with excellent service, and by getting those injured workers back to work quicker than their counterparts.
2-Enhanced communication with your TPA/Carrier:
Lack of proper communication can lead to increased claims expense. If the adjuster doesn’t know that you have light duty work available, they may not be pushing hard enough to get work restrictions for your injured worker. Maybe the adjuster doesn’t know you have a dedicated medical clinic and/or physical therapy facility and failed to direct the injured party to treat at those clinic locations. 

Maybe the injured worker took vacation time or sick pay for their time off of work, and they didn’t tell the adjuster that so they got paid twice-once by your company and once by the Carrier. Although most times the adjuster will catch this, sometimes they do not. This leads to an overpayment that the carrier must try to recoup, and if they fail to do so the cost of that ultimately gets pushed to you in the result of a higher premium due to increased claim costs. Whatever the event may be, you need to be in regular contact with your adjuster.   

Perform claims reviews and ask the adjuster on each claim what their plan is for getting the claim resolved.  The more you discuss the claim, the more ideas you both can come up with, and that may be what is keeping your worker off of work. By working together, you will save costs. Most adjusters would prefer too much communication versus not enough, plus this will keep the adjuster on their toes and they will be keeping a close eye on your claims, preventing one from falling through the cracks which will further waste claims dollars.

3-Using the other departments your TPA/Carrier has to offer:
Most Carriers/TPAs have multiple departments that will work with you to reduce your exposure. Loss prevention, ergonomics, dedicated adjusters to your account, medical/nurse resources, medical bill review, etc.   All of these services may be provided free of charge by your Carrier/TPA, and the end result of utilizing these services will be lower claim cost to you. Implementing the action plans that these departments come up with is designed to lower your costs. So talk with your Carrier/TPA and find out what resources they have to help you reduce cost. They will be happy to work with you, and you will be happy since your claims expense will decrease over the course of a year.
4-Utilizing a 3rd party company for all of your RX needs:
Pharmacy costs are constantly rising. Almost every injured worker comes out of their doctor's appointment with a prescription for some medication in their hand. There are a lot of 3rd party pharmacy companies out there willing to work with you to reduce these costs if you funnel your injured workers to their pharmacy programs. Find out what kind of pharmacy management program they provide. The best sell their services unbundled.  Look for prospective as well as retrospective elements of the cost control program. This can lead to huge cost savings, even on the minor claims, and will help the most with the more severe claims, since those injuries usually require prescriptions that cost more, and they length of the prescriptions last longer. This is a significant way to reduce your costs, and you will see large savings at the end of the year. (WCxKit)
There are a lot of ways to reduce your costs. Not only in the larger higher exposure claims, but in the small minor claims as well. If you think about it, every little savings you can make can add up to a lot by the end of the fiscal year. Remember there are ways to cut costs on every claim, no matter how insignificant the claim may be at the time. You have to think both ways, in the short term and long term. Whatever it may be, the end result is you saving money, and that is never a bad thing

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. See www.LowerWC.com for more information. Contact: RShafer@ReduceYourWorkersComp.com.

ABC's of Workers Comp Management:  www.WCManual.com
 WORK COMP CALCULATOR:  www.LowerWC.com/calculator.php

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 Info@ReduceYourWorkersComp.com.

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