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Risk in Context

3 Ways to Limit Prescription Drug Costs in Your Workers’ Compensation Program

Posted by Dennis Tierney May 16, 2017

Last year, spending on prescription drugs for injured workers fell by 7.6%, according to the Express Scripts 2016 Drug Trend Report. And yet physician dispensing, frequent opioid prescriptions, and costly compounded medications continue to pose challenges for employers. For accident year 2014, prescription drug costs represented 17% of workers’ compensation medical expenses, according to the National Council on Compensation Insurance. 

Here are three strategies that employers can use to better manage their prescription drug costs.

Manage Provider Networks

It’s important to work with doctors and other providers whom you trust, and who adhere to evidence-based medical treatment guidelines. These providers should offer injured workers alternatives to opioids and other pain medications, including counseling and physical therapy. And your pharmacy benefit manager (PBM) should regularly audit your network — at least once per quarter — to identify and address problematic behaviors. 

Limit Physician Dispensing and Compounds

Many of the costs related to physician dispensing can stem from an injured worker’s first visit to an emergency room, local clinic, or personal physician. Environmental, health, and safety professionals, human resources personnel, and supervisors and managers should encourage injured workers to use in-network providers and pharmacies only. You can also encourage the use of in-network pharmacies by giving an injured worker a first-fill form or card. 

Meanwhile, a team of nurses or other well-trained claims management staff should review compound prescriptions to ensure they have a legitimate medical purpose before being dispensed to injured workers. If a compound is prescribed to an employee, your PBM should also notify your insurer or TPA and discuss with the employee and prescribing physician the high cost and potential dangers they present. 

More broadly, a claims advocacy model that emphasizes constant communication, education, and transparency with injured workers can contribute to better medical outcomes and less reliance on prescription drugs to treat employees. 

Choose Your Claims Administrator Wisely

When choosing an insurer or third-party administrator (TPA) to manage their workers’ compensation claims, employers often focus only on upfront costs. But variable costs can make up as much as 90% of your total workers’ compensation program cost, so it’s important to focus on outcomes in addition to how your provider is compensated, whether on a fixed cost basis and/or as a percentage of savings. 

Make sure that you’ve selected a claims administration vendor with competent and efficient claims adjusters and nurse case managers. Your claims vendor should also provide you with high quality and accurate data about your program, including regular assessments of your pharmacy network performance via your PBM. 

For more on this topic, listen to the replay of our webcast, Strategies for Containing Your Pharmacy Costs.

Dennis Tierney

Claims Director Marsh’s Workers’ Compensation Center of Excellence