Customized Utilization Management: Driving Cost Savings, Improving Care
Today, prescription drug costs account for 18 percent of the total medical expenses within workers' compensation medical claims and this makes the balancing act even more delicate -- and critical. One way to successfully hit both objectives is a stronger focus on customized utilization management (UM), according to Greg Todd, CEO and co-founder of Integrated Prescription Solutions Inc. (IPS), a Costa Mesa, Calif.-based pharmacy benefit manager (PBM) for the workers' compensation and disability market.
"Custom utilization management really needs more of an emphasis," Todd said. "At IPS, our whole process, by design, literally customizes many aspects of the W/C PBM program for each client."
While that may sound daunting, Todd added, it's necessary. Yet, for payers today, it is extremely difficult to get anything close to true UM customization. In many cases, Todd said, the marketplace is fairly inflexible, and many payers wind up with a group health PBM interface that really doesn't get at the workers' compensation challenges when it comes to ensuring the best possible cost/return-to-work outcomes.
"Payers need to be aware of that," he said.
In order to deploy any UM controls with maximum effectiveness, you have to focus first on getting a claimant's prescriptions captured into the PBM program, Todd explained. Customized "first fill" solutions that are formulary-based, assigned price caps, and limited to a day's supply, assist in controlling the prescription-capturing process from the initial date of injury to closing the claim. High network penetration is paramount; the deployment of comprehensive UM tools has allowed IPS's clients to achieve in excess of 90 percent network penetration. As a result, UM solutions in place have the greatest ability to have an impact.
For large self-insureds and employers who also self-administer their compensation program, an area of critical importance is that first fill stage when an injured worker gets his or her initial prescription filled and any number of things can go wrong - including non-injury related prescriptions filled, unauthorized prescriber, costly medications without step therapy controls, or opioids being prescribed without medical necessity documentation.
"First fill is not the whole picture, but it represents twenty-six percent of the total workers' compensation pharmacy spend, according to NCCI," Todd said, noting that by getting the first fill done properly, the ensuing prescription refills also will fall into place, and the patient will be likely to remain within the network. In IPS' case, pharmacy network penetration is guaranteed to be at a minimum of 90 percent. IPS attributes its unusually high network penetration rate to a number of important factors, with one of them being their unique first fill solution.
Todd believes you can have great solutions, but if a PBM doesn't capture the claim and utilize the data to its maximum within the UM customization platform, those solutions will not reach their true potential. "Using data effectively separates the wheat from the chafe," he said.
Todd singled out four key areas to consider in choosing a workers' compensation PBM that can deliver true UM customization:
Todd explained that the majority of the work between a PBM and its clients is handled by adjustors and the PBM's client services staff. As a result, for example, IPS developed a wide variety of custom communication options that automate the authorizations and resolutions activities involved day to day. These custom controls can be managed at the enterprise or individual adjuster level. For IPS, that means finding an efficient way to match client styles, methods, processes, etc."The idea of YourWayTM Tool is to tailor 40 operational workflow processes at the enterprise or individual adjuster level.
According to Todd, a group health formulary simply is not equipped to handle workers' compensation claims because the latter needs a formulary, with more than a common list of 300 prescription drugs, or a few broad classes of drugs to cover all claimants. For workers' compensation, the formulary must be granular, often taken down to individual claimant level. "You must be able to drill down from a UM customization perspective to the individual injured worker," Todd says. The idea is to build on a clinical approach as the cornerstone for every solution."
Todd explained that even though there may be a specific list of providers in a network, they don't always follow prescription and program guidelines. For example, if there are 10 pharmacies within a network, typically 6-7 of them will take the network card, process it, apply the discount and honor the agreement they made with the PBM as a network provider. But in those other 3-4 cases, for whatever reason, they may decide to ignore network guidelines resulting in a costly out-of-network bill. Based on IPS' process for working with its 65,000 network pharmacy providers, the figure is 9.5 out of 10 network pharmacies honor the company's drug card agreement.
Another critical aspect to review when selecting a PBM is their clinical solutions program. A comprehensive clinical solutions program should consist of prospective, concurrent, and retrospective approaches. Once a claimant has reached the retrospective side, the PBM needs to have a variety of tools available. These tools should include physician education tools and methods for validating medical appropriateness of drugs, Pharmacy Reviews, Peer to Peer Reviews, Physician Profiling, and automated transfers to mail order when eligible.
Todd concluded that the most effective UM customization program means getting it aligned up front, and making sure every aspect -- from formulary to price caps -- are covered and tied back into the claim. He added that PBM is the least saturated of all market segments within workers' compensation. The reason is that many large self-insured, self-administered employers have often avoided workers' compensation PBM plans, opting to use their group health drug plans instead. But, he said, that is starting to change as pharmacies are now rejecting claims that do not involve a workers' compensation-specific pharmacy network agreement.
"The ability to deliver a customized utilization management platform is required in today's workers' compensation marketplace," Todd said. "Factors including but not limited to the rapid growth of opioid use has accelerated the need for PBM's that specialize in workers' compensation and are designed to manage the complex prescription drug landscape in workers' compensation today."
(The above piece is part of our continuing Insights series designed to highlight key products and services to our readers. This paid-for Insights was written and edited by Risk & Insurance®
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February 29, 2012
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