WC Drug Costs in Texas: An Option You Can Afford
True Savings, Part Two
By Herman Wilks
The innovations in modern medicine over the last 50 years have been unprecedented. It is clear that we are living longer, healthier lives sometimes in part with the assistance of the drug industry, which continues to evolve and improve. With that innovation, there is a cost. Drug manufacturers spend millions of dollars researching, developing, and bringing drugs safely to market. Often times, the end result is drugs that are highly effective, but very expensive.
The workers’ compensation (WC) market in Texas has also been affected by the drug industry. Not only from the raw cost of drugs, but also from the over utilization of drugs.
In fact, in claims open longer than 3 years, drug costs represent 80 percent of the overall costs on the claim.
Recent studies indicate the drug utilization and cost in WC are trending upward of greater than 5 percent per year and now represent a major portion of the medical cost of a claim. In fact, in claims open longer than 3 years, drug costs represent 80 percent of the overall costs on the claim. It is also no secret that narcotic opioids are the number one prescribed drug in WC. Texas is consistently among the leaders in drug costs per claim, number of drugs prescribed per claim, and brand name drugs prescribed versus generic substitutions. In short, we have a problem.
What is the Fund doing to curtail this trend for its members? Recognizing these economic times and the continuing budget challenges for many Fund members, TASB staff decided to be proactive regarding drug costs beginning in 2008 by partnering with one of the most innovative pharmacy benefit managers (PBM) in the marketplace. A PBM issues drug cards for injured workers to use when they go to the pharmacy to fill drugs for their WC injury. When an employee presents the card at a retail pharmacy to fill a drug, the prescription is electronically managed by the Fund’s PBM. The PBM utilizes nationally recognized treatment guidelines, as well as a strict drug formulary to proactively assess whether the drug fill is appropriate.
The Fund currently enjoys a 45 percent savings using its PBM below what would normally be paid.
The PBM then contacts the claims adjuster electronically if the drug is inappropriate. This affords the Fund the opportunity to discuss the drug with the treating doctor to determine alternatives and a treatment plan. The Fund currently enjoys a 45 percent savings using its PBM below what would normally be paid had the pharmacy billed the Fund directly for its services with no intervention from the PBM. These are hard documented and tangible savings.
Additionally, TASB staff developed a proprietary drug protocol program that benchmarks new claims receiving certain questionable drugs. The purpose here was, again, to be proactive by intervening in a claim file before the drugs become a chronic issue. The protocol program enlists the expertise of a panel of peer review physicians with credentials in pharmacy and addiction. The panel reviews these files and engages in conversations with the treating physicians to develop alternatives through treatment planning. The goal is not necessarily to stop the use of narcotic drugs, but instead to open the lines of communication with the treating doctors to ensure the injured employee is receiving the most effective and safest care possible.
TASB staff developed a proprietary drug protocol program that benchmarks new claims receiving certain questionable drugs.
The results of the drug protocol program have been very effective. Although the Fund’s overall number of injured employees receiving drugs for their injuries increased by 16 percent from 2009 to 2010, the number of prescriptions stayed this same and the Fund’s utilization savings represented 25 percent of the total overall drug costs. Clearly, the numbers indicate that the program is working extremely well and the Fund is continuing to find new innovative and proactive ways to capture real savings for its membership. Can you afford not to be a member of the Fund’s WC program?
For questions or comments regarding this article or the Fund’s WC program, please contact us at 800.482.7276.
