How to maximize workers’ compensation prescription drug savings and ensure the highest level of care Featured

3:27pm EDT February 22, 2011
Daryl Corr, President, Healthesystems Daryl Corr, President, Healthesystems

While the overall number of workers’ compensation claims has decreased over the past few years, insurance industry studies show medical treatment costs are continuing to grow at an alarming rate with prescription drugs being one of the major contributors.

The impact, however, isn’t solely driven by the price of the drugs, but instead, in large measure, it has been due to the increased utilization — more drugs are being prescribed, more frequently, and for longer periods of time. In many cases there are more appropriate and cost-effective treatment alternatives — but, in order to better manage this process, more focus and expertise is required than what is provided in most Pharmacy Benefit Management (PBM) programs, especially when comparing workers’ compensation benefits to group health.

“One of the major challenges workers’ compensation insurance programs encounter with controlling medication costs is ensuring injured workers are being prescribed the most effective and appropriate drugs to treat an injury or work-related illness,” says Daryl Corr, president of Healthesystems. “Since the complexity of injuries and patient medication tolerances can vary so significantly, combined with the challenge of widescale use of pain medications, treatments can’t be a one-size-fits-all approach. Therefore, it’s critical to incorporate more clinically focused strategies to ensure prescription drug treatments are being managed appropriately, especially in the most complex cases.”

Smart Business spoke with Corr about the uniqueness of workers’ compensation prescription benefits and how clinically focused tools are impacting medication costs and the quality of care.

How can a clinical services program help reduce the costs associated with complex workers’ comp pharmacy claims?

At the most basic level, a clinical services program helps customers design and maintain the pharmacy program’s medication plan (formulary) around the specific prescription medications or classes used to treat workers’ comp related injuries. These rules can help determine whether a drug requires a prior authorization before dispensing.

However, on a more targeted level, a successful clinical services program can have a big impact when focused on the most complex workers’ comp cases. These complex cases may represent a small percentage of an insurance payer’s injured worker patient population, but they have a tendency to drive most of the cost. In a lot of situations, this goes well beyond the typical 80/20 business rule axiom. For many insurance payers, less than 10 percent of the claimants receiving prescription drugs are driving over 70 to 80 percent of their overall drug treatment costs.

So, focusing more attention on this narrow group of claims maximizes the opportunity to significantly reduce drug spend. However, it requires a lot more expertise and commitment from the PBM to achieve the best results. You need a highly skilled and knowledgeable staff of PharmD clinicians focused on examining individual cases, analyzing drug therapies and identifying alternate treatment options — subsequently interacting with prescribing physicians and claims professionals to educate them about more appropriate alternatives when they are available. This approach focuses on the claims where the largest dollars are being spent in order to maximize the potential savings impact.

What is the best way for a PBM to integrate clinical services into a pharmacy program?

The most successful clinical tools are highly integrated into a PBM’s overall pharmacy program. There are critical pharmacy program functions necessary to make this happen, namely powerful technology and proactive communications. Incorporating powerful technology takes pharmacy management to the next level by proactively identifying problematic prescription trends through systems edits and evidence-based medical guidelines. A proactive communication process is key, especially when it comes to interactions between the PBM, the prescribing physician and the insurer’s claims professional.

A PBM’s team of PharmD professionals needs to actively interact with physicians to provide education and insight into the specifics about the prescribed drugs and the injuries they are treating. Depending on a physician’s specialty, they may have limited knowledge about the effectiveness of a particular drug or alternatives available — or, frequently a physician may not be aware of all medications being prescribed to an injured worker if they are being treated by multiple physicians. Clinical education and outreach is imperative and must occur quickly in order to be most effective.

Are these targeted clinical services applied universally to all workers’ comp claims?

Not necessarily. Usually, these types of services are focused on the most complex claims. All clients and their individual claims are unique — just like each diagnosis is unique to each injured worker. In addition, rules and regulations differ from state to state and may affect how or if you can interact with physicians, or whether there are specific mandated treatment guidelines in place. A PBM must be aware of these rules and work with customers to ensure everyone maintains compliance. With these added issues, it becomes even more crucial for a PBM to take a proactive role in educating its clients about what is occurring in the market as it relates to applying best treatment guidelines and clinical best practices.

There is also a need to proactively monitor the pharmaceutical industry to identify new drugs that are entering the market, which may have an impact on a workers’ comp pharmacy program. The key is to help clients make the right decisions by factoring both treatment effectiveness and cost. It isn’t solely driven by the price of one pill. It’s about applying the right treatment to achieve the optimal outcome, which typically means lower costs over the life of the claim.

DARYL CORR is president of Healthesystems. Contact Healthesystems at (800) 921-1880 or For more information about Healthesystems, visit