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By now, it's become clear to everyone in the workers' compensation industry that controlling the cost of prescription drugs and managing the many other complex cost drivers is an intense, frequently changing battle that requires constant attention. It's also not a major news flash that prescription opioid use and abuse has reached what many industry experts are calling epidemic proportions, leaving some payers to wonder whether there are better solutions available to manage these challenges. Ideally, there would be one solution, but in reality the answer is comprised of a much larger and multifaceted approach.

According to Daryl Corr, president at Healthesystems, a specialty provider of pharmacy and ancillary benefits management programs for the workers' compensation industry, the fight to control prescription drug costs requires an ongoing focus on innovation and the ability to look ahead and identify future challenges. Due to the constant evolvement of prescription drug care, when one new approach towards cost control gains traction, another new challenging cost issue seemingly pops up elsewhere.

In effect, Corr added, today's changes continue to morph into tomorrow's challenges. It is a "moving target" and requires pharmacy benefit managers and payers to continually develop solutions that can keep pace with the dizzying change.

To reach any level of success, and to stay ahead of the cost curve, Corr described six key characteristics of a high performing pharmacy management program that are critical to successfully controlling the changing landscape of prescription drug treatments and costs:

-- Proactive -- When describing the many services and functions a PBM program must provide, the definition of being proactive covers a wide range of topics. Whether it's the prospective capabilities of automated tools or the service level standards and business approach of the PBM, payers should rely on their PBM partner to provide the expertise, direction and solutions to navigate through the complexities of prescription drugs and alert them when changes are necessary. As is the case with any successful claims management methodology, early intervention is one of the keys to staying ahead of the claims cost curve and is proven for achieving better claims outcomes. Using advanced data analytics and data modeling tools can help a PBM detect and alert payers about questionable prescription activity early in the treatment life cycle and avoid potentially costly outcomes. Timely communication and educating all the key stakeholders in the claim process -- payer, prescribing physician and injured worker -- is also another critical factor.

-- Strategic -- Managing many of the challenges in workers' comp prescription drug benefits such as opioid use, physician dispensing, compound drugs, etc. require innovation and well defined strategies. According to an analysis performed by Healthesystems, up to 57% of patients being prescribed opioids after 90 days of treatment will continue to be utilizing them at 52 weeks, especially if no clinical intervention has occurred with the prescribing physician. Therefore the need to implement a strategic opioid management program capable of quickly identifying at-risk claims is critical. The use of early detection, early intervention tools are proven to alter the costly and often unproductive path treatments may frequently follow. Prescription opioids can comprise anywhere from 25 to 40 percent of a payer's total annual prescription drug cost. When considering the savings opportunities along with the potential to improve care, it's easy to illustrate the benefits of applying a more strategic approach.

-- Flexible --Most payers have unique claims environments comprised of varying claims population characteristics such as different jurisdictional coverage and claim loss histories combined with varying claims philosophies that dictate the need for a tailored program design -- and there is no one size fits all approach. The success of a pharmacy program is largely affected by how well it can be tailored to the uniqueness of each payer. Much of this is dependent upon the flexibility of the PBM technology infrastructure and whether it can accommodate high levels of customization and integration while simultaneously being capable of adding new functionality to address the ongoing industry changes. The ability to make changes as quickly as possible is critical. In the year 2011 alone, many significant legislative changes occurred such as the roll out of the ODG based closed formulary in Texas or the implementation of new rules regarding repackaged drugs in several states. All of these present potential savings opportunities for payers, and legislative activity doesn't look to be slowing down.

-- Targeted -- The majority of workers' comp prescription drug costs are typically driven from a small portion of a claims population. In many payer cases, less than 10% of claimants receiving prescription drugs represent upwards of 80% of the total annual drug spend. Focusing on this narrow group of claims can produce big savings. This type of strategy requires a PBM's PharmD clinicians to identify complex cases as quickly as possible and facilitate communication with the prescribing physicians to help ensure optimal therapy is being considered. The results of these clinically based activities have proven to significantly reduce the total number of prescriptions and dollars as well as the number of prescribing physicians.

-- Comprehensive -- Achieving total program success and optimizing cost savings is the result of many factors and there is no silver bullet that overcomes the many obstacles that exist in workers' compensation. Most importantly, a comprehensive program must focus on service. Beyond managing the prescription transactions and providing access to a comprehensive network, the success of the pharmacy program must also focus on providing the necessary tools and education to ensure claims professionals have the tools to make more informed claims decisions. Especially in a heavy case load environment, information needs to be presented proactively versus requiring adjusters to pick up the phone. For example, using technology tools to instantly present clinically-based drug information when claim decisions are being made can save a significant amount of time and reduce prior authorization errors. The service continuum must also be extended to provide solutions for minimizing out of network or paper bill processing activity and proactively address network conversion opportunities where they exist. Service functions focused on these tasks can improve program network penetration results by over 10%.

-- Engaged --Timely communication and education of all stakeholders in the claim process is a crucial function of any PBM. Today, many cost savings opportunities will result from new state legislation or rule making and the PBM can play a significant role by being engaged in this process. An important component is educating the states about the existing challenges payers are encountering and providing greater insight into how the PBM can most effectively make the process better for the payer and other stakeholders. Maintaining this type of engagement has been helpful with managing several of the recently introduced rules or legislative changes addressing physician dispensing and repackaged drug activity. It is likely this type of legislative activity will continue to dominate many state agendas. Regardless of the issue being addressed -- repackaged drugs, opioids, compounds, medical foods, etc. -- they all require PBMs and payers to be more vigilant and engaged in the overall process.

"Of course, there are more detailed pharmacy program features and functions that can affect rising costs, but these high level areas are critical service characteristics in which a payer can collaborate with its PBM partner to create effective strategies in gaining control over prescription drug costs," Corr said. "Ultimately, the reality is no one has the luxury to address only one or two of these areas. The highest level of success will be achieved from addressing all of them."

(The above piece is part of our continuing Perspectives series designed to highlight key products and services to our readers. This paid-for Perspective was written and edited by Risk & Insurance® on behalf of our marketing partner. Additional Perspectives can be found on our Web site at www.riskandinsurance.com/.)

April 10, 2012

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