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Workers Comp pharmacy management and third party billers

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.

3 thoughts on “Workers Comp pharmacy management and third party billers”

  1. Joe: I do not you are speaking about regarding a large TBA but it wasn’t me. I have been associated with Retail Community Pharmacy providing Worker Compensation Claims Management services and other Claim Accounting Services for over 20 years.
    I would openly invite you to contact me for and allow me to share with the real impact that proposed PBA’s not PBM’s have in managing pharmacy benefits with in the Work Comp Marketplace.
    I think it’s important to get the and report the entire truth prior to making statements such as “payers have been reducing their reimbursement to the TPB based on the rate that the retail pharmacy has agreed to”. This statement made by you is false and you do not fully grasp the contractual aggreement that excist between Community Pharmacy and PBM’s/PBA’s.
    Please do the industry and favor and gather all the facts prior to making such statements. Hopefully you believe that United States as the best Health Care dilivery system in the world. This said, it important to have the facts knowing so you can publish and inform your readers correctly.
    J.R. Thompson
    President, Third Party Solutions

  2. I seem to have struck a nerve here.
    The truth is many payers have been reducing their reimbursement to TPBs – this is the reason that has led the TPB I spoke with to initiate legal action. That is a fact.
    I do grasp the contract between the parties, Mr. Thompson’s comments notwithstanding. The fact is many retail pharmacies have contracts with TPBs as well as PBMs, and these contracts …overlap. Therein lies the root of the problem. The TPBs will claim that the retail pharmacy chooses to send the script to them, which makes it the TPBs to do with as they please. Some payers will claim that they only have to pay the retail pharmacy the rate the pharmacy has contractually agreed to with their PBM.
    I’m not taking sides here, I’m pointing out facts.
    As to the US having the best health care delivery system in the world, that is likely true for those with adequate health insurance, and manifestly false for those without.
    But I don’t know what that has to do with PBMs, payers and third party billers.

  3. Mr. Thompson,
    It would be more beneficial to the discussions if all parties reading this were able to fully graspe the concept your company is trying to provide. Since no one is in business for free or to simply help others out, there is always a bottom line and I would like to know what TPS’ bottomw line is. How is this profitable for your company? I am eager to hear back from you.

Comments are closed.

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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