Pharmacy Benefits Management Cost Control Tips

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.comContact: RShafer@ReduceYourWorkersComp.com.

 

 

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©2011 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact

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Reducing Narcotics Abuse in Workers Compensation

On-the-job injuries often involve chronic pain and long-term liability for workers compensation payors. Many times, pain from a chronic injury is treated with narcotics. According to the 2010 Progressive Medical Drug Spend Analysis, narcotic spending accounts for 34 percent of workers compensation medication expenses.1 While narcotics can be beneficial in the treatment plan for a patient in pain, there are serious risks involved when they are not used properly.
The Centers for Disease Control (CDC) and the Substance Abuse and Mental Health Services Administration (SAMHSA) both indicate increasing misuse and abuse of narcotics over the past decade. SAMHSA data shows there was a significant increase from 2000 to 2006 in the treatment of substance abuse cases related to abuse of opioid analgesics.2 In addition, another study co-released by CDC and SAMHSA found emergency room visits linked to nonmedical use of narcotics rose 111 percent between 2004 and 2008.3
As the cost of prescriptions, including narcotic medications, directly impacts the cost of a workers compensation claim, insurers are looking for ways to quickly get control of cases of misuse and abuse. One of the most efficient ways to manage narcotic use in a claimant population is to partner with a pharmacy benefit manager (PBM). A PBM can clearly define a strategy for proactively and effectively monitoring narcotics. These plans and strategies help payors ensure injured worker safety and reduce expenses. (WCxKit)
 
The Workers Compensation Narcotics Quandary
Narcotics, also referenced as opioids or opiates, have a long history of being used to therapeutically treat pain resulting from on-the-job injuries. They are often prescribed to alleviate pain after an injury first occurs, when other drugs are ineffective for acute pain and in chronic pain cases.
And, while narcotics are considered safe and effective if used properly, they have the potential for leading to addiction and abuse if not monitored and controlled. Misuse and abuse of narcotics represent three areas of particular concern for workers compensation insurers including:
1.      Potential for serious health risks.
2.      Higher percentage of medical expenses as claims age.
3.      Risk of litigation.
Potential for Serious Health Risks
The United States Food and Drug Administration (FDA) has recognized serious risks associated with narcotics use including respiratory depression, central nervous system depression, addiction, and death. Some of these risks are associated with improper dosing, indication, patient selection, abuse, and addiction. As a result of these adverse events, the FDA has begun to take serious steps to monitor whether the benefits of narcotic medications outweigh the risks associated with short- and long-term usage.4
These steps include an FDA-led panel developing Risk Evaluation and Mitigation Strategy (REMS) for long-acting narcotics. The purpose of REMS is to ensure that prescribers are educated regarding the proper use of narcotics and that benefits outweigh risks associated with:
1.      Abuse.
2.      Misuse.
3.      Overdose, both accidental and intentional.
Narcotics, including methadone tablets, fentanyl patches and extended-release medications containing morphine, oxymorphone, and oxycodone are among the medications effected by the REMS requirement. Narcotics on the FDA’s list are provided in a table at the end of this article.5
Recently, the FDA proposed plans to further address the increasing misuse and abuse of narcotics specifically related to extended-release (ER) and immediate-release (IR) opioid analgesics. While a panel committee agreed the goals of the REMS are appropriate, the individual components of the REMS are insufficient to address the misuse and abuse of ER opioid analgesics. It was agreed that these particular REMS plans be tabled until there is a stronger proposal in place.6
Higher Percentage of Medical Expenses as Claims Age
While narcotics account for more than a quarter of workers compensation medication spending, even more troubling is the allocation of that spending. In a recent study released by the National Council on Compensation Insurance, narcotics’ total share of medication expenses increases as claims age – from 15 percent in year one to as much as 35 percent in the fifth year of service.7
The role narcotics play in total workers compensation claims expenses has not gone unnoticed by state workers compensation funds. For example, the Arizona State Compensation Fund noted they were easily able to pinpoint over-prescribing of narcotics as a key source of inflated medical costs.8
What’s more, the longer an injured worker is on narcotics, the longer the delay in the injured worker’s ability to return to work in a timely fashion. There is also an increased likelihood the payor will need to pay for rehabilitation programs for addiction.
 
 
Risk of Litigation
Narcotic abuse poses serious legal risks for workers compensation payors. While much of the litigation to date has been targeted against physicians and pharmacies, there are many experts who believe workers compensation payors will be next. This is because payors have access to data showing patterns of abuse and misuse and may have the duty to warn injured workers and prescribers in cases involving potential misuse.9
Workers compensation payors who choose not to take proactive measures to monitor utilization or communicate with physicians could face lawsuits for negligence. This is especially critical in cases where one or more narcotics are prescribed for more than six months at a time. (WCxKit)
With respect to paying questionable claims, many payors have done so rather than face the expense and time of litigation. Morally, this poses a key question for insurers. Is it acceptable for insurers to settle fraudulent claims or does it position them as aiding and abetting the perpetrator? This could change if payors become defendants in lawsuits related to narcotic abuse.
References
1. “2010 Workers Compensation Drug Spend Analysis.” Progressive Medical, April 2010.
2. “Risk Evaluation and Mitigation Strategies for Certain Opioid Drugs; Notice of Public Meeting,” Federal Register, Volume 74, Number 74; Notices, Pages 17967-17970, Department of Health & Human Services, Food and Drug Administration, Docket No: FDA-2—0-N-0143.
3. “Trends in Emergency Department Visits Involving Nonmedical Use of Narcotic Pain Relievers,” Substance Abuse and Mental Health Services Administration and Centers for Disease Control, http://www.cdc.gov/mmwr(/mmwr/).
4. Gardiner Harris, “FDA to Place New Limits on Prescriptions of Narcotics,” New York Times, February 9, 2009.
5. “Opioids Products Chart,” U.S. Food and Drug Administration, http://www.fda.gov/Drugs/DrugSafety/InformationbyDrugClass/ucm163654.htm.
6. “Opioid Drugs and Risk Evaluation and Mitigation Strategies (REMS),” U.S. Food and Drug Administration, http://www.fda.gov/Drugs/DrugSafety/InformationbyDrugClass/ucm163647.htm.
7. Barry Lipton, Chris Laws and Linda Li, “Narcotics in Workers Compensation,” NCCI Research Brief, December 2009 p.5.
8. “Sky High Out of Control Drug Costs A Threat,” State Compensation Fund of Arizona.
9. “Prescription for Peril,” December 2007, Coalition Against Insurance Fraud, p. 43.

Brand Name Opioid Products
Generic Name
Trade Name
Applicant/Sponsors
Fentanyl
Duragesic Extended Release Transdermal System
Ortho McNeil Janssen
Hydromorphone
*Palladone Extended Release Capsules
Purdue Pharma
 
Methadone
Dolophine Tablets
Roxanne
Morphine
Avinza® Extended Release Capsules
King Pharms
 
Morphine
Kadian® Extended Release Capsules
Actavis
 
Morphine
MS Contin Extended Release Tablets
Purdue Pharma
 
Morphine
Oramorph Extended Release Tablets
Xanodyne Pharms
 
Oxycodone
OxyContin Extended Release Tablets
Purdue Pharma
 
Oxymorphone
Opana® Extended Release Tablets
Endo Pharma
 
*No longer being marketed, but is still approved.
 
Generic Opioid Products
Generic Name
Drug Name
Applicant/Sponsors
Fentanyl
Fentanyl Extended Release Transdermal System
Actavis
 
Fentanyl
Fentanyl Extended Release Transdermal System
Lavipharm Labs
 
Fentanyl
Fentanyl Extended Release Transdermal System
Mylan Technologies
 
Fentanyl
Fentanyl Extended Release Transdermal System
Teva Pharms
 
Fentanyl
Fentanyl Extended Release Transdermal System
Watson
 
Methadone
Methadose[O1]  Tablets
Mallinckrodt
Methadone
Methadone HCL Tablets
Mallinckrodt
Methadone
Methadone HCL Tablets
Sandoz
Morphine
Morphine Sulfate Extended Release Tablets
Endo
 
Morphine
Morphine Sulfate Extended Release Tablets
KV Pharmaceuticals
 
Morphine
Morphine Sulfate Extended Release Tablets
Mallinckrodt
 
Morphine
Morphine Sulfate Extended Release Tablets
Watson Labs
 
Oxycodone
Oxycodone Extended Release Tablets
Mallinckrodt
 
Oxycodone
**Oxycodone Extended Release Tablets
Impax Labs
 
Oxycodone
**Oxycodone Extended Release Tablets
Teva
 
** Discontinued products.

Author Tron Emptage, who holds a BS in Pharmacy, is Chief Clinical & Compliance Officer with Progressive Medical. Mr. Emptage has overseen Pharmacy Services, Clinical Services, National Account Management served as Vice President of Strategic Initiatives and Executive Vice President of Business. His 20-year plus experience in pharmaceutical and managed care defines him as a key player in moving the company forward in the arena of national pharmaceutical managed care. Contact him: tron.emptage@progressive-medical.com or 800.777.3574 or visit Progressive Medical.

About Progressive Medical
Progressive Medical offers cost management services and programs to the workers compensation industry. By combining its clinical expertise with access to an expansive network of pharmacies, home health care services and medical equipment and supplies, the company enables its clients to manage costs while providing quality care to injured workers. Learn more at Progressive Medical or call 866.939.5365.      http://www.workcomptransformation.com/narcotics-quandary/

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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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