A new organization was formed this summer that is pledging to narrow the gap between workers' compensation pharmacy costs and the pharmacy costs of group healthcare plans.
In June, a group of pharmacy benefit management firms specializing in workers' compensation formed CompPharma LLCto address regulatory, legislative and other issues that drive workers' compensation pharmacy costs.
Based in Madison, Conn., the consortium was founded by Aetna Workers' Comp Access, Cypress Care, Medical Services Co. and Progressive Medical Inc. Workers' compensation industry consultants Joseph Paduda of Health Strategy Associates and Helen Knight of King Knight Communications helped to establish the consortium.
CompPharma's first initiative was to develop Rx Insights, a 50-state database of laws and regulations affecting workers' compensation PBMs. The database covers issues such as the definition of a pharmacy, mandatory generics and the licensure of PBMs and third-party administrators. The network also includes information on workers' compensation networks, pharmacies and employer-direction of pharmaceutical care.
CompPharma is also investigating other issues that drive the costs of pharmacy in comp, such as capturing the first fill of workers' comp prescriptions and working with manufacturers on the appropriate use of various medications.
A centralized eligibility database will eventually be available to help consortium members capture first fill and subsequent prescriptions, making sure the scripts are directed to the right PBMs. The scripts can then be paid at a negotiated rate and undergo clinical review and other PBM services.
"We've created this organization to help PBMs working to find and implement real solutions to rapidly growing problems," says Paduda. "Our goal is to make this information accessible on a real-time basis and, ultimately, help PBMs reduce workers' comp costs."
An executive with Progressive Medical said CompPharma has promise.
"There are so many regulatory and legislative issues to stay on top of in workers' comp--from shifts in fee schedules to electronic connectivity with various states," says Tron Emptage, vice president, strategic initiatives at Progressive Medical Inc., based in Westerville, Ohio. The CompPharma database will help standardize this information in a noncompetitive way, and will allow us to better understand how legislation affects our various business models."
Another executive at one of its founding companies said CompPharma has a chance to help bring workers' compensation pharmacy costs in line with group healthcare prescription costs.
"CompPharma will allow us to present a more cohesive picture of how PBMs view certain issues, such as usual and customary fees and legislated fee schedules," says Mitch Freeman, senior vice president, pharmacy services at Jacksonville, Fla.-based Medical Services Co.
"There is a significant difference in cost between workers' comp and group health prescriptions, primarily driven by risk in the workers' compensation system and the inability to mandate the use of pharmacy networks. By addressing these cost management initiatives, we will ultimately be able to address and control clients' administrative burdens."
October 15, 2007
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