I had a very interesting conversation yesterday with an executive at a large workers compensation third party biller. For those unaware, third party billers (TPBs) are entities that buy WC scripts from retail pharmacies and then try to collect from the insurance companies. Think of them as factoring agents; the retail pharmacy gets their cash fast, and the TPB gets to make a margin on the difference between what they pay the retail pharmacy and what the insurer pays the TPB.
By the end of the conversation, it was abundantly clear that the TPBs are out to take over the WC PBM (pharmacy benefit management) business. This TPB claims to have spent several years trying to collect what they believe they are owed from numerous payers, wtih very limited success. As a result, they are now pursuing aggressive legal action to try to force the payers to pay them the full amount for each script.
Many payers have been reducing their reimbursement to the TPB based on the rate that the retail pharmacy has agreed to. The TPB claims that since they bought the script, they now own it, and therefore the payer has to reimburse them at fee schedule.
The payers believe that since the script was filled by a retail pharmacy that is in their pharmacy network, they only have to pay the contracted amount.
Woven throughout the conversation was the statement that the TPBs exist to improve the injured workers’ life; by getting access to the drugs, they are helping to speed healing and reduce lost work time. A noble goal to be sure.
What does this mean for you?
The PBM-payer-TPB mix is going to have a huge impact on WC medical expenses, systems, and workflows.
Insight, analysis & opinion from Joe Paduda