by Dennis M. Sponer, CEO, ScripNet

As a rule, you aren’t prepared to address future problems or take advantage of future opportunities unless you spend time reflecting on what has been happening, think about whether that will continue or change and then make sure you have the tools or programs in place to address those problems and opportunities.  With that in mind I dedicate this article to the trends that I see in workers’ compensation pharmacy benefit management and the tools and programs we have developed to address them.

Not surprisingly, rising medical costs are on top of the list.  Reports from NCCI, WCRI and others show that medical severity is on the rise, primarily driven by increased utilization, as well as the cost of drugs that are particular to workers’ compensation i.e. pain medication, especially narcotics, muscle relaxants and antidepressants.  Although the number of accidents is down, resulting from higher unemployment and more effective loss prevention/safety programs, the age or longevity of claims, the number of treatments per claim and the price of drugs has more than made up for it.   The workforce is also getting older with more people not able to afford retirement and is getting more obese, both of which add to longer recovery times and extended benefits.  

We address this multitude of problems or cost drivers with multiple programs and tools.   Our Formularies, which are tailored for each customer and specific to certain injury types and patients, and our generics program, help to ensure that the most cost effective and medically appropriate drugs are dispensed to injured workers.  Our ScripStar Pharmacy Network communicates those Formularies directly to the point-of-sale where prescriptions can be approved, adjudicated or denied.  Our clinical pharmacist works diligently to keep our formularies current.   And we work hard to grow our pharmacy network and quickly notify and distribute pharmacy cards to injured workers to capture first-fills in network.  However, one of our most effective tools is Drug Utilization Reviews (DUR), which we can perform for client claims on  a retrospective or a concurrent basis.  DUR programs have been effective at identifying problematic prescribing and dispensing patterns, claimants who are taking significant doses of opioids that involve medical risk, abuse, fraud and diversion.   DUR Programs can lead to physician outreach and pharmacy audits that address the problems at the core and result in significant cost savings. 

Another cost driver comes in the form of competition at the retail pharmacy for the processing of claims, that being Third PartyBillers (TPB).  TPBs target first-fills, out-of-network pharmacies and patients who aren’t identified by pharmacists  as being in-network.  ScripNet successfully defended itself against the major TPB – Stone River in 2010, for not paying over the contracted in-network rate for Stone River’s mark up claims.  ScripNet also has dedicated a team of network compliance specialists to manage paper bills, increase network penetration and correct TPB claims that are overpriced and incorrectly processed.

A trend that has been growing dramatically in many states, California and Florida in particular, is repackaging and physician dispensing of drugs.  Essentially repackaging allows physicians to create a new National Drug Code (NDC) that becomes a loophole in state fee schedules, allowing them to charge more for drugs.  Also, because physicians don’t have access to pharmacy networks, they operate outside of formularies, generic replacement and the approval/adjudication process, thereby  increasing the risk to patients and costs to payers.   Some states have addressed this problem with legislation, making it illegal for physicians to dispense drugs.  ScripNet is encouraging the industry to deal with this growing problem and is tracking and analyzing physician dispensed drugs to quantify the problem and manage it on a case-by-case basis.

As the economy recovers, organizations will be hiring new employees, possibly younger and less experienced, skilled and trained workers, which will lead to more injuries.  These organizations will benefit greatly by safety/loss prevention and back to work programs.  

Although new Federal legislation and regulation does not appear to be likely in the near future, and there is not a universal trend that will impact state fee schedules and costs across the board, state commissions are being much more proactive in establishing data collection standards through EDI projects and requiring electronic billing and collection methods.  This is not only to improve system efficiencies but will allow them to capture reliable information to support medical costs analysis, medical policies and fee guidelines.   The State of Texas is proposing a rule that will require carriers to submit data on what they are paying to PBMs, and what PBMS are paying to pharmacies.  This will not necessarily add to ScripNet’s cost, because this information is already available to its clients and can easily be made available to state commissions.  It is also consistent with ScripNet’s company policy on transparency in pricing.

One of the most significant cost-containment activities that ScripNet account managers engage in is operational data monitoring, analysis, reporting and open communication with its customer claims adjusters.  ScripNet recently launched a claims web portal called ScripNet Access Point ™ (SNAP), which makes both historical and real-time claims data more readily available, so that clients more easily understand and can more cost effectively manage the business.  And we are always open and encourage a dialog with our employees and with our customers to identify problems early and talk about ways that we can be more efficient and effective in the business. 

If you have some thoughts in that regard, don’t hesitate to send me an email, dsponer@scripnet.com.