Sharpening the Tools to Help With Pharmacy Management

Experts urge workers' comp managers to focus on the medical portion of the claim, the pharmacy benefits manager and issues surrounding undocumented workers.

By CYRIL TUOHY, managing editor of Risk & Insurance®

Workers' compensation and disability managers would do well to stay focused on managing the medical portion of a workers' comp claim, said Carla Cirelli Wynn, director of workers' comp programs for Aramark Corp., speaking at a preconference session on Tuesday at the Annual National Workers' Compensation and Disability Conferece® & Expo in Las Vegas.

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By 2017, according to one industry statistic, the medical portion will make up 70 percent of the cost of a claim, with the indemnity portion making up the remainder.

"Medical by far is the most expensive piece of the pie," Wynn said. Thus, it's important to focus on evaluating medical networks, pharmacy benefits management vendors and administration tools.

"For bill-review fees, I was astounded to find out the nuances of how companies bill out the service," Wynn also said.

The pharmacy portion is still small compared with overall claims costs but growing fast.

Pharmacy costs increased 4.9 percent in 2009 over 2008 and are projected to grow by 3 percent to 5 percent in 2011, said Tron Emptage, chief clinical and compliance officer for Progressive Medical Inc., which helps manage the costs of pharmacy benefits.

Of the approximately $30 billion spent in 2009 on workers' comp medical expenses, as much as $6 billion was spent annually on workers' comp drugs, Emptage said.

Complex treatment regimens, new drugs and the mixing of compounds to change a drug's effectiveness have added to the challenges in managing claims, said Emptage.

"Look for a PBM to fit your needs, just like you would a third-party administrator," he said.

Richard A. Watts, an attorney with the law firm of Swift, Currie, McGhee & Hiers in Atlanta, said the next battleground will take place around benefits to claimants in the areas of vocational and light-duty work.

Watts said that courts in Pennsylvania, Oregon, North Carolina and Illinois have ruled that undocumented workers are subject to the loss of wages due to their immigration status, not their work-related injury.

Courts in Georgia and Florida have ruled that offering a light-duty job to undocumented workers is subject to "reverification" of their legal status, he said. Still, other courts have ruled that undocumented workers claiming benefits have no light-duty options at all.

November 10, 2010

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