CIGNA Press Release 10122006 - PDF

To help employers control the escalating costs of prescriptions for employees out on workers’ compensation, CIGNA today announced the new Workers’ Compensation Pharmacy Benefit Management (PBM) Solution. This integrated program is designed to reduce workers’ compensation pharmaceutical costs by as much as 75 percent.

“By pairing CIGNA Pharmacy Management’s (CPM’s) recognized low net cost and clinical pharmacy expertise with Intracorp’s industry-leading capabilities in workers’ compensation management, this new program is designed to deliver savings to the employer and help minimize dangerous drug interactions,” said Fred Scardellette, vice president of product, marketing and fee management operations for Intracorp. “Savings will be achieved through discounts, preventing duplicate prescriptions, an electronic payment system, use of a formulary, and controlled utilization to eliminate fraud and abuse,” he continued.

According to the National Council on Compensation Insurance (NCCI), workers’ compensation carriers spend over $3.5 billion on prescription medications annually. Pharmacy costs represent 10 to 20 percent of total workers’ compensation medical bills and the amount is increasing at a rate of 10 to 17 percent annually, according to Health Strategy Associates. In addition, when Archestral, a health-care data analysis firm, audited two million paid workers’ compensation prescription claims last year, it found that 20 percent of payments included at least one error, such as incorrect pricing or a drug that wasn’t indicated for the particular diagnosis.

“For the past ten years, I’ve worked both sides of the house — group health and workers’ comp. In my evaluation, it made no sense that a prescription that costs $35 under group health may cost $100 under workers’ compensation,” said Charlotte Perkins, chief human resources officer at Performance Food Group (NASDAQ:PFGC) a national food service distribution company with more than 7,000 associates. “I tried for years to get somebody in the industry to look at the issue and work with us to find a sensible solution. CIGNA was the first company willing to sit down and listen to what we had to say.”

Perkins implemented the CIGNA program in July and has already seen an immediate 19 percent savings and 85 percent generic utilization rate for her company. “That doesn’t take into consideration abuse and fraud,” notes Perkins. “Double-dipping is a huge problem in workers’ comp. We also expect to realize additional savings by using the formulary to steer employees toward generics instead of brand name drugs and by requiring mail order for maintenance medications.”

A second tier of savings comes from Drug Utilization Review (DUR), a comprehensive, systematic review of drug use patterns and cost data, which can mitigate health and safety risks and could more than double fee schedule savings by further reducing inappropriate drug use and fraud. It provides maximum benefit when linked to the group health system. This integrated DUR, in which group health and workers’ compensation prescription claims are housed within the same system, can flag such potential problems as dangerous drug interactions, early refills, duplicate prescriptions, therapeutic duplication, or misallocation of pharmacy payments between group health and workers’ compensation.

“We will be applying a fully integrated pharmacy claims processing system to the workers’ compensation system for the first time ever. Whether the employee is obtaining prescription medication through group health or workers’ compensation, the same ability to improve outcomes and manage costs will apply,” said Thom Stambaugh, chief pharmacy officer for CPM. The Workers’ Compensation PBM Solution will be administered by ScripNet (http://www.scripnet.com), a company that specializes in serving the needs of injured workers and those responsible for their care.

Detailed reporting such as a savings report, top 100 medications report, prescription history by claim, and top 25 physicians by dollar will help identify trends that can be useful in setting specific goals and improving outcomes.

An integrated PBM, used in conjunction with a good occupational health network, ergonomics programs to prevent injury or re-injury, and similar tools can work together to help employers control the high cost of prescription medications for work-injured employees. “I think this is the next big product that’s being brought to the insurance industry. I believe it will have a significant, positive impact for the business community,” concluded Perkins.

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“CIGNA Pharmacy Management” (CPM) or “CIGNA” refer to various operating subsidiaries of CIGNA Corporation (NYSE:CI). Products and services are provided by these subsidiaries and not by CIGNA Corporation. These subsidiaries include Connecticut General Life Insurance Company, Tel-Drug, Inc., Tel-Drug of Pennsylvania, L.L.C., and HMO or service company subsidiaries of CIGNA Health Corporation.

Philadelphia-based Intracorp, a subsidiary of CIGNA Corporation, helps employers maximize their workers’ compensation and disability benefits programs to enhance the well-being and productivity of their workforce. Intracorp, which was ranked the leading case management provider in 2006 by Business Insurance magazine, also offers pharmacy benefit management, utilization management, return-to-work programs, ergonomic consulting, provider bill review, provider network access, and information management services. For more information, visit the Web site at: http://www.intracorp.com.