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Monday catch-up

CompPharma’s annual meeting was held last week; CompPharma is an association of workers’ comp PBMs of which I am president.  This year the focus was on connecting payers’ Medical Directors, PBMs, and regulators in an effort to broaden all parties’ understanding of each others’ priorities, issues, concerns, and constraints.

A few key takeaways;

  • Drug formularies must be evidence-based and supported by utilization review.  UR must incorporate a quick and intelligent way to resolve disagreements.
  • Formularies should NOT be restrictive – on either side.  That is, regulations should support payers’ ability to restrict access to inappropriate drugs and readily approve drugs that a formulary may deem inappropriate.
  • We continue to make good progress against overuse and abuse of opioids, but the biggest challenge remains long-term users of the drugs.
  • The regulator’s task is beyond complex. Rapid changes in medical knowledge, conflicting state and federal laws (e.g. marijuana), reduced staff in many jurisdictions, and an adjudicatory process built for far less complicated times combine to ensure very few answers are simple and straightforward.
  • Things are getting better in California, where the UR process has likely prevented serious harm in multiple instances.  That said, well over 95% of all medical procedures and treatments are approved, a result that may indicate too much leniency rather than too little.  

CDC’s draft opioid usage for chronic pain guidelines was obtained by an organization despite efforts to keep it closely held..  Notably, CDC’s researchers found precious little evidence supporting the practice.  Note the draft is just that.

Implementing reform

Things are getting contentious in the provider – health plan world.  As payers seek to promote narrower networks, some providers left out of those networks are not happy. While the most public airing of the dispute is in New Jersey, rest assured this is occurring in your state.

Expect a lot more in the news about this early next year; we’ll be all over this in January.

Meanwhile, both primary care and specialist physicians have seen a slight increase in pay since reform implementation.

Health insurance premium increases have been the subject of much reporting and even more confusion – some of it caused by the reporting.  Here’s a quick summary of what’s REALLY happened.  One key quote:

The average premium of the lowest-cost silver plan increased by less than 5 percent in five states, increased between 5 and 10 percent in five states, and increased by more than 10 percent in just four states.

Workers’ compensation

Jennifer Wolf-Horesjh, Executive Director of IAIABC has launched a podcast entitled Accidentally.  The initial effort is well worth a listen.

Along with former SAIF CEO John Plotkin, Bob Wilson, and Bob Reardon of ISG I participated in a panel discussion on Social Media at NWCDC, focusing on positive aspects of social media.  The video is up here.

Meanwhile, the US economy continues to improve, and the workers’ comp world is benefiting as employment increases lead directly to higher premiums.  While rates are decreasing in most states, the jump in payroll is more than enough to offset the rate drop.

NCCI’s out with the final report on how things went for work comp insurers in 2014.  Overall, ’14 results were pretty good despite low investment returns. The combined ratio (claims plus admin expense) stayed below 100, indicating insurers made money on an underwriting basis (not counting investment returns).

And t he good folk at WCRI have just published their latest research on Louisiana; you get order the publication here.  Key takeaway – after adoption of medical treatment guidelines, utilization of medical services decreased.  Remember, correlation is not necessarily causation…

5 thoughts on “Monday catch-up”

  1. Joe, sounds like you had a very productive meeting last week. I would add – formularies need to be not only evidenced based, but injury specific. Otherwise we run into the issues Texas had with Y drugs that are supported by evidence – but not necessarily for every injury.

    1. Denise: Injury-specific in theory is great, but remember that one of the primary users of a Formulary is the pharmacist, who will not know the diagnosis. They simply need to know if they should get preauth on the drug or not. A simple Y or N is necessary for this reason. The Texas Formulary (ODG) has been tremendously successful because it is both practical (simple Y or N), but then also links into the evidence summaries from the ODG guidelines where patient selection criteria, diagnosis, dose, adverse effects, etc., are discussed and can be applied by the physician or UR agent. N doesn’t mean “never”, and Y doesn’t mean “yes forever” — it’s just a simple way to change practice patterns to make sure the right drugs are used first-line, and the wrong ones are not. The diagnosis is PHI (personal health information), and therefore cannot be made readily available to the pharmacist.

      1. Phil – thanks for the note.

        The Y-N formulary causes significant friction for PBMs and payers – retail pharmacies as well – as drugs that are “approved” are sometimes not appropriate for the condition. This causes problems for the payer, PBM, and retail pharmacy as those inappropriate drugs are denied retrospectively. Then the issue becomes who pays, and if/how the dispensed drug affects medical management.

  2. Injury specific formularies? I think many in the industry don’t really understand how work comp formularies work to begin with, and how they are different from formularies on the group benefit side.

    Assuming the buyer does understand how formularies work in comp, help me understand the value of “injury specific?” Work comp injuries are by and large related to musculo-skeletal issues, so hard to rationalize how the meds change between shoulder and knee injuries. Standard work comp formularies the PBMs offer are more than adequate to address the front-line of 95% of the injuries we see.

    I can see different job-type exposures to work injuries calling for different types of meds to be included in the formulary, i.e., black lung for miners, healthcare workers having higher exposures, certain types of cancer covered as part of the police and fire contracts, etc. I would agree that you should be able tailor formularies to the job class/exposure.

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Joe Paduda is the principal of Health Strategy Associates



A national consulting firm specializing in managed care for workers’ compensation, group health and auto, and health care cost containment. We serve insurers, employers and health care providers.



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