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PBMs Under Scrutiny

PBM Legislation Worries Workers’ Comp Payers

Legislation to regulate group health pharmacy benefit managers could impact workers' comp payers.
By: | February 5, 2014
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Legislation introduced in several states seeking to impose new regulatory authority over group health pharmacy benefit managers could harm workers’ compensation PBMs and claims payers, sources said.

Introduction of similar bills in 11 states has raised concerns among workers’ comp insurers, third party administrators, and some large employers, said Brian Allen, VP of government affairs for Progressive Medical, a workers’ comp PBM.

“We have had customers calling us every day worrying about how it is going to impact us and them,” Allen said. “These are big insurance companies … they are nervous about it and want to know how it’s going to impact them.”

Brian Allen, VP of government affairs for Progressive Medical

Brian Allen, VP of government affairs for Progressive Medical

Overall, it appears the bills seek greater transparency in the way group health PBMs set their pricing, said Joe Paduda, principal at Health Strategy Associates. But group health PBM practices differ substantially from those of workers’ comp PBMs and the bills seek to address issues that “have nothing to do with workers’ comp,” he added.

Yet while the bills appear aimed at practices among PBMs serving the group health industry and not workers’ comp PBMs, Allen and others say a spillover into workers’ comp is possible. So several organizations want language inserted into the bills that would clearly exempt workers’ comp PBMs.

“It appears that workers’ compensation PBMs are not the target of this legislation,” the American Insurance Association said in a statement. “That said, AIA supports efforts to include clear exemptions for workers’ compensation PBMs in these bills in order to clarify legislative intent and avoid any confusion down the road.”

“Community” pharmacies seeking more revenue from products they dispense are supporting the bills that would put PBMs under certain state regulatory agencies, such as pharmacy boards, Allen said.

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State workers’ comp commissions or insurance departments already regulate workers’ comp PBMs, depending on the jurisdiction, Allen explained. But the legislation could add oversight from additional agencies such as state pharmacy boards.

Complying with regulations developed by two distinct agencies with potentially conflicting goals could cause an administrative burden for workers’ comp PBMs, Allen added.

“We want to make sure we are not swept up into crazy regulatory schemes that would be difficult to manage,” he said.

A new oversight body could also decide to impact workers’ comp PBM pricing, which is already regulated by state fee schedules, Allen said.

“If for some reason the pharmacy board said, ‘you have to pay pharmacists more money,’ that potentially would impact our customers because we would have to pass that cost onto payers,” Allen said.

Roberto Ceniceros is senior editor at Risk & Insurance® and co-chair of the National Workers' Compensation and Disability Conference® & Expo. He can be reached at rceniceros@lrp.com. Read more of his columns and features.
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Utilization Review

In Search of a Great Peer Review

Peer reviewers can have a significant impact on the outcome of a claim. That's why it's worth making a commitment to identify only the best and most effective peer review services.
By: | October 31, 2014 • 5 min read
peer review

Have you noticed the increasing importance of peer review services? With medical and narcotic utilization on the rise, peer reviewers can have a tremendous impact on the outcome of a claim. So, how can you ensure that your search for great peer review services is successful?

Consider this: peer review companies have two customers: the peer reviewer and the payer and your search must ensure that they have appropriately focused on both.

The Peer Reviewer Customer

For the peer reviewer the company that has recruited them must provide the tools necessary to facilitate their work processes so that, as one Peer Review company told me: “Physicians can just be physicians.”

If you want the best medical professionals reviewing your treatment requests or having conversations with the treating provider on your behalf on your most difficult claims, then they must have access to their work anywhere, anytime. “Great” peer reviewers are most often “great” practicing physicians who are very busy and might want to be able to perform their peer review at odd hours of the day or night. The technology must be reliably available more than 99 percent of the time in order to ensure that jurisdictional timeframes are met.

Peer reviewers need easy, well-organized access to all of the relevant information on a case including:

  • Prior medical records,
  • Actual diagnostic images
  • Prior utilization reviews and recommendations
  • Automated and integrated guidelines relevant to each diagnosis
  • State specific regulations.

Peer review companies should have technical, regulatory and clerical support readily available to the peer reviewers. To ensure that their time is used wisely, assisting reviewers with the scheduling of appointments with the treating physicians for peer-to-peer discussions can be very important.

Making the right decision on medical care requires time and energy. Often there is a great deal of medical history to slog through to ensure peer reviewers have the right clinical understanding of a case. If the reimbursement to the provider is a flat rate that does not take into consideration the amount of material there is to review on a particular case, the reviewer will skim the material to get an idea and then make a decision. But previous medical history is a critical component to a peer reviewer’s medical necessity/appropriateness decision.

A “great” peer reviewer will be able to effectively engage with the treating physician and have a fruitful, productive conversation.

Consider the example of an injured worker with a knee injury. The MRI shows the tear and the treatment request meets all the guidelines. However a review of the very extensive medicals demonstrates that this same injured worker has had this surgery several times previously without any benefit. A “great” peer reviewer would have read all the medicals and would have known that, on an MRI, a meniscus tear looks just like a scar from previous surgery. Without any benefit from the previous surgeries, more surgical intervention is not indicated.

The Payer Customer

For the payer customer, the peer review company must make certain that reviews are completed with the highest quality for a reasonable cost. This means that they have to provide all of the support services noted above and have clinical integrity as a core value. What should you be looking for?

The peer review company must demonstrate a thorough and extensive recruitment and credentialing process for peer reviewers. This process should not only include the usual primary source verification but assurance that peer reviewers have demonstrated clinical insight: the ability to find a balance between their clinical experience and evidence-based guidelines.

Two of the most important skills in the art of peer review are communication and interpersonal skills.  A “great” peer reviewer will be able to effectively engage with the treating physician and have a fruitful, productive conversation. This is especially true when you are using peer review on your legacy/complex claims where the peer reviewer is attempting to obtain agreement to a significant change in treatment or prescribing plans.

One peer review company explained it to me this way: “When you are doing jurisdictionally mandated UR, the treating provider is expecting your call; when you are doing a retrospective review on a complex claim, you are surprising the provider and ‘great’ communication skills are critical.”  Because these skills do not necessarily go hand-in-hand with clinical skills, your peer review company must have a method to measure the level of skill for each of their peer reviewers and be willing to train when necessary.

The peer review company needs to have a formal quality assurance process that ensures that another clinical professional reviews each peer review letter or report.  You want the company to ensure that the review has sound clinical reasoning that is appropriate and consistent from a diagnosis, guideline and medical records standpoint, has appropriate spelling and grammar, has answered all the questions posed by the adjuster, has the treating provider’s perspective/agreement when appropriate and has met all jurisdictional requirements.

In order for you to be certain such a program is in effect, the peer review company needs to be able to demonstrate that it is tracking the QA statistics/issues/complaints for each of their contracted reviewers in order to assist or retrain those with frequent issues or replace those unable to perform at the expected level.

And last but certainly not least, the peer review company should be providing meaningful outcome reports that identify the impact of the peer review Program on your WC Program. You need to decide what goals you are setting for this program. Is it all about the number or percentage of treatment denials or the reduction in the number of pharmaceuticals an injured worker is taking?  Or are you more interested in overall program impact, e.g., reductions in average cost per claim or overall medical spend? Whatever goals you set for this program, your peer review company should be able to assist you to understand their impact on those goals.

Ask yourself: What can I do to bring my organization’s peer reviews from good to “great”?

Maddy Bowling is a principal in Maddy Bowling Consulting, Inc., a WC consulting firm. Bowling has 35 years of broad-based executive management experience within operating, corporate and consulting environments spanning the workers' compensation injury management industry. She can be reached at mb@maddybowlingconsult.com.
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Sponsored: Helmsman Management Services

Six Best Practices For Effective WC Management

An ever-changing healthcare landscape keeps workers comp managers on their toes.
By: | October 15, 2014 • 5 min read

It’s no secret that the professionals responsible for managing workers compensation programs need to be constantly vigilant.

Rising health care costs, complex state regulation, opioid-based prescription drug use and other scary trends tend to keep workers comp managers awake at night.

“Risk managers can never be comfortable because it’s the nature of the beast,” said Debbie Michel, president of Helmsman Management Services LLC, a third-party claims administrator (and a subsidiary of Liberty Mutual Insurance). “To manage comp requires a laser-like, constant focus on following best practices across the continuum.”

Michel pointed to two notable industry trends — rises in loss severity and overall medical spending — that will combine to drive comp costs higher. For example, loss severity is predicted to increase in 2014-2015, mainly due to those rising medical costs.

Debbie discusses the top workers’ comp challenge facing buyers and brokers.

The nation’s annual medical spending, for its part, is expected to grow 6.1 percent in 2014 and 6.2 percent on average from 2015 through 2022, according to the Federal Government’s Centers for Medicare and Medicaid Services. This increase is expected to be driven partially by increased medical services demand among the nation’s aging population – many of whom are baby boomers who have remained in the workplace longer.

Other emerging trends also can have a potential negative impact on comp costs. For example, the recent classification of obesity as a disease (and the corresponding rise of obesity in the U.S.) may increase both workers comp claim frequency and severity.

SponsoredContent_LM“The true goal here is to think about injured employees. Everyone needs to focus on helping them get well, back to work and functioning at their best. At the same time, following a best practices approach can reduce overall comp costs, and help risk managers get a much better night’s sleep.”
– Debbie Michel, President, Helmsman Management Services LLC (a subsidiary of Liberty Mutual)

“These are just some factors affecting the workers compensation loss dollar,” she added. “Risk managers, working with their TPAs and carriers, must focus on constant improvement. The good news is there are proven best practices to make it happen.”

Michel outlined some of those best practices risk managers can take to ensure they get the most value from their workers comp spending and help their employees receive the best possible medical outcomes:

Pre-Loss

1. Workplace Partnering

Risk managers should look to partner with workplace wellness/health programs. While typically managed by different departments, there is an obvious need for risk management and health and wellness programs to be aligned in understanding workforce demographics, health patterns and other claim red flags. These are the factors that often drive claims or impede recovery.

“A workforce might have a higher percentage of smokers or diabetics than the norm, something you can learn from health and wellness programs. Comp managers can collaborate with health and wellness programs to help mitigate the potential impact,” Michel said, adding that there needs to be a direct line between the workers compensation goals and overall employee health and wellness goals.

Debbie discusses the second biggest challenge facing buyers and brokers.

2. Financing Alternatives

Risk managers must constantly re-evaluate how they finance workers compensation insurance programs. For example, there could be an opportunity to reduce costs by moving to higher retention or deductible levels, or creating a captive. Taking on a larger financial, more direct stake in a workers comp program can drive positive changes in safety and related areas.

“We saw this trend grow in 2012-2013 during comp rate increases,” Michel said. “When you have something to lose, you naturally are more focused on safety and other pre-loss issues.”

3. TPA Training, Tenure and Resources

Businesses need to look for a tailored relationship with their TPA or carrier, where they work together to identify and build positive, strategic workers compensation programs. Also, they must exercise due diligence when choosing a TPA by taking a hard look at its training, experience and tools, which ultimately drive program performance.

For instance, Michel said, does the TPA hold regular monthly or quarterly meetings with clients and brokers to gauge progress or address issues? Or, does the TPA help create specific initiatives in a quest to take the workers compensation program to a higher level?

Post-Loss

4. Analytics to Drive Positive Outcomes, Lower Loss Costs

Michel explained that best practices for an effective comp claims management process involve taking advantage of today’s powerful analytics tools, especially sophisticated predictive modeling. When woven into an overall claims management strategy, analytics can pinpoint where to focus resources on a high-cost claim, or they can capture the best data to be used for future safety and accident prevention efforts.

“Big data and advanced analytics drive a better understanding of the claims process to bring down the total cost of risk,” Michel added.

5. Provider Network Reach, Collaboration

Risk managers must pay close attention to provider networks and specifically work with outcome-based networks – in those states that allow employers to direct the care of injured workers. Such providers understand workers compensation and how to achieve optimal outcomes.

Risk managers should also understand if and how the TPA interacts with treating physicians. For example, Helmsman offers a peer-to-peer process with its 10 regional medical directors (one in each claims office). While the medical directors work closely with claims case professionals, they also interact directly, “peer-to-peer,” with treatment providers to create effective care paths or considerations.

“We have seen a lot of value here for our clients,” Michel said. “It’s a true differentiator.”

6. Strategic Outlook

Most of all, Michel said, it’s important for risk managers, brokers and TPAs to think strategically – from pre-loss and prevention to a claims process that delivers the best possible outcome for injured workers.

Debbie explains the value of working with Helmsman Management Services.

Helmsman, which provides claims management, managed care and risk control solutions for businesses with 50 employees or more, offers clients what it calls the Account Management Stewardship Program. The program coordinates the “right” resources within an organization and brings together all critical players – risk manager, safety and claims professionals, broker, account manager, etc. The program also frequently utilizes subject matter experts (pharma, networks, nurses, etc.) to help increase knowledge levels for risk and safety managers.

“The true goal here is to think about injured employees,” Michel said. “Everyone needs to focus on helping them get well, back to work and functioning at their best.

“At the same time, following a best practices approach can reduce overall comp costs, and help risk managers get a much better night’s sleep,” she said.

To learn more about how a third-party administrator like Helmsman Management Services LLC (a subsidiary of Liberty Mutual) can help manage your workers compensation costs, contact your broker.

Email Debbie Michel

Visit Helmsman’s website

@HelmsmanTPA Twitter

Additional Insights 

Debbie discusses how Helmsman drives outcomes for risk managers.

Debbie explains how to manage medical outcomes.

Debbie discusses considerations when selecting a TPA.

SponsoredContent

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This article was produced by the R&I Brand Studio, a unit of the advertising department of Risk & Insurance, in collaboration with Helmsman Management Services. The editorial staff of Risk & Insurance had no role in its preparation.


Helmsman Management Services (HMS) helps better control the total cost of risk by delivering superior outcomes for workers compensation, general liability and commercial auto claims. The third party claims administrator – a wholly owned subsidiary of Liberty Mutual Insurance – delivers better outcomes by blending the strength and innovation of a major carrier with the flexibility of an independent TPA.
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