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:








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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


Implementing a Clinically Driven Pharmacy Benefits Program

In speaking with Danielle Lisenbey, Chief Operating Officer of Broadspire's Medical Management Services, I learned how important a good pharmacy benefit management program is and what to look for when shopping for a PBM (pharmacy benefit management) program. Lisenby also updated on how the cost of pharmcacy costs has increased.
The 2010 Annual
Drug Trends Report for Workers Compensation indicates pharmacy costs in 2009, rose 6.5% with workers taking an average of 11.1 prescriptions per injury.
Employers may want to implement a clinically driven model to reduce pharmacy costs – one targeting these areas: (WCxKit)

1.     Delivering appropriate medications to your injured workers.

2.     Managing escalating prescription costs.

3.     Reducing opioid misuse or abuse.

4.     Helping return employees to productivity.

A pharmacy benefit management program uses evidence-based medicine designed to help employers gain more control over costs associated with workers compensation claims. These key points need to be in your program:

1.     Utilization management experts assess medications for appropriate use in work related injuries.

2.     Examine pharmaceutical data to discover possible misuse or abuse.

3.     A clinical review team of nurses and doctors help control prescription costs by working to eliminate:

a. Inappropriate fills.

b. Duplicate prescriptions from multiple providers.

c.   Prescription overuse beyond claim guidelines.

d.     Multiple prescriptions that counteract or adversely affect one another.

Think in broad terms by giving employees access to multiple pharmacies in a reputable pharmacy management network and mail order service. Look for providers that link to pharmacies in real-time and immediately approve medications at the counter to reduce out-of-pocket expenses for your injured employees. The technology is efficient, with rejected scripts saving employers over 48% of costs in 2009. Look for a provider wtih 24/7 service and toll free access to a pharmacy customer care line. Patient care advocates, bill processors and registered pharmacists should be available to answer any questions that arise. The center also must track orders, prescriptions and other pharmacy program information for every claim. (WCxKit)
A pharmacy program integrates fully with claim, medical bill review and utilization management departments. This close connection helps promote early enrollment for injured workers and allows employers to take greater advantage of the cost saving potentials.

Contributor: Broadspire provided content about their workers compensation medical management services.
For more information, contact Broadspire at 1-866-625-1662 or emailing; www.choosebroadspire

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.

©2010 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact

20 Things to Look for in a Pharmacy Benefits Manager (PBM)

The cost of drugs is the fastest growing component of medical care cost and often one of the most neglected areas of workers compensation cost control. It is estimated that workers compensation pays $5 billion in drug cost each year. While there are numerous pharmacy benefit managers (PBM) in the work comp arena, they are often either totally ignored or only partially utilized by the insurers, self-insureds and third party administrators (TPA). Other areas of medical cost control like fee bill schedules, medical provider networks, medical management and utilization review get more attention than PBM, but proper utilization of PBM can result in substantial savings in the cost of work comp.

What PBM Can Do?


Unfortunately, many claim adjusters think of PBM only as a way of saving money by getting a discount on the cost of prescriptions. With some PBM that is all they do. However, if the insurer (or the self-insured employer who is paying attention to the factors in the cost of their work comp coverage) shops around among the PBM providers, they should be able to locate a PBM that has a national presence and a focus on proactive utilization control. Key service points and cost control solutions to consider for a PBM include:1.      The flexibility to coordinate the medical prescription benefit in the most efficient manner between the employee, the pharmacy and the medical provider with minimal involvement of the adjuster


  1. The ability to comply with all the workers’ compensation rules and regulations of each state, which can vary tremendously from state to state, and to stay current/up to date
  2. The technology to process the prescription in real time – without delay when presented by the employee to the pharmacy – with the appropriate pricing         (WCxKit)
  3. A national network covering most of the 70,000+ pharmacies in the United States. This will provide convenience and hassle-free access for the employees regardless where they live (also to prevent non-compliance with the required use of the PBM). The PBM network should definitely include the three major chains – Walgreens, CVS Pharmacies and Rite-Aid
  4. A comprehensive standard formulary that can be customized and injury-specific and/or patient-specific to manage utilization (even customized down to the ICD-9 codes)
  5. A pre-negotiated price (network discount) for each drug (a 25% discount off a price that is 50% higher than it should be is not a cost savings)
  6. The ability to provide home delivery by the Postal Service, Fed Ex or UPS at minimal extra cost
  7. The willingness to provide 24 hours a day, 7 days a week customer support service
  8. The ability to identify generic substitution opportunities

10.The identification of newer drugs that provide greater benefit

11.The ability to process – approve or deny – the off-label use of a drug

12.Utilization review — before the prescription is filled – to prevent of overuse of narcotics – consumption faster than manufacturer recommendations or faster than the medical provider’s prescription amount

13.The prevention of multi-physician (“doctor shopping”) prescriptions from being processed for the same drugs or duplicate use drugs

14.The prevention of multi-pharmacy involvement in filling the same prescription (for example – the employee takes the paper prescription to one pharmacy to be filled, then called the medical provider, claims to have lost the prescription and has the prescription called into another pharmacy)

15.The technology to recognize when inappropriate or non-compensable medication is being dispensed (for example – a non-injury related medication is being presented to the pharmacy) and the ability to stop it from being filled

16.The ability to be electronically integrated with the insurers’, TPAs or self-insured’s bill review system to eliminate the manual processing of individual prescription payments

17.The ability to provide ancillary services like durable medical equipment (nice to have, but not absolutely essential)

18.The ability to provide reports on cost savings, utilization and trending

19.The ability to provide correct pricing for any drugs dispensed from the doctor’s office which often are over billed

  1. Accreditation by the Utilization Review Accreditation Committee reflects the PBM promotes quality and efficiency of health care delivery



A Growing Problem:


The use of PBM does result in a reduction in the abuse of pain medications. However, some employees who become pain medication junkies have found a way to circumvent the PBM. A growing problem is the medical providers who will perform office injections for the employee. The medical provider gets paid for multiple office visits and the pain medication junkie keeps on abusing the pain medication. (WCxKit)




The appropriate management of medications by the PBM can lower the overall cost of medical care and shorten the return to work time. The employee benefits from the PBM by receiving the necessary medications locally (or home delivery) while the employer benefits from the employee receiving the appropriate medications in a timely manner. The insurer or self-insured benefit from the medical savings the PBM provides.

Author Rebecca Shafer, President, Amaxx Risks Solutions, Inc. has worked successfully for 20 years with many industries to reduce Workers Compensation costs, including airlines, healthcare, printing/publishing, pharmaceuticals, retail, hospitality and manufacturing. .





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.


©2010 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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